VETER­ANS SOON CAN SHOP TAX-FREE ON­LINE

The Denver Post - - FRONT PAGE - By Josh Funk The As­so­ci­ated Press

Start­ing this year, all hon­or­ably dis­charged veter­ans will be el­i­gi­ble to shop tax-free on­line at the Army & Air Force Ex­change Ser­vice.

Hey, veter­ans. You can soon shop tax free. Start­ing later this year, all hon­or­ably dis­charged veter­ans, no mat­ter their branch of ser­vice, will be el­i­gi­ble to shop tax-free on­line at the Army & Air Force Ex­change Ser­vice with the same dis­counts they en­joyed on base while in the mil­i­tary. It’s the lat­est way in which the or­ga­ni­za­tion is try­ing to keep its cus­tomers as the armed forces shrink and air­men and sol­diers buy more for de­liv­ery.

Adding 13 mil­lion po­ten­tial new cus­tomers will give ex­tra am­mu­ni­tion to the group that runs the stores on U.S. Army and Air Force bases world­wide as it fights Ama­zon and other re­tail­ers for veter­ans’ on­line shop­ping dol­lars.

Since hir­ing its first civil­ian CEO five years ago, the Ex­change has up­graded the brands at base stores to in­clude items like Dis­ney toys, Michael Kors fash­ions and other top names. Like pri­vate stores, it’s also im­posed tighter cost con­trols, re­duced the num­ber of em­ploy­ees and im­proved people’s ex­pe­ri­ence on the web­site.

“The in­tent is to re­ally beat Ama­zon at their game be­cause we have lo­ca­tions lit­er­ally on the in­stal­la­tions,” said CEO Tom Shull. “We’re lean­ing to­ward not just ship-from-store but pick-up-from-store and even­tu­ally de­liver-from-store.”

Ex­change is adding ship­ping cen­ters within its stores to al­low it to send prod­ucts di­rectly from those lo­ca­tions more cheaply and quickly. Twenty-six stores now ship or­ders, and that will ex­pand to 55 by the end of the year.

Within the next three years, Shull said the goal is to de­liver some­thing on base within two hours of when it is or­dered. That’s pos­si­ble partly be­cause the Ex­changes are al­ready on base, cleared by se­cu­rity.

The Ex­change de­liv­ers most or­ders on the sec­ond day now. Shull said ship­ping from stores will make a big dif­fer­ence in re­gions around bases, which are of­ten in more ru­ral ar­eas.

Ex­pand­ing on­line shop­ping to all hon­or­ably dis­charged veter­ans is ex­pected to add about $200 mil­lion an­nu­ally within three years to the $8.3 bil­lion in sales the Ex­changes gen­er­ated last year.

Adding those shop­pers, what Shull called “the foun­da­tion of our growth,” is crit­i­cal to help off­set the 13 per­cent de­cline in the num­ber of ac­tive-duty Army and Air Force sol­diers since 2011 when the Ex­change gen­er­ated $10.3 bil­lion rev­enue.

“It’s a mod­est ben­e­fit, but it can save you thou­sands of dol­lars a year,” said Shull, a grad­u­ate of the U.S. Mil­i­tary Academy who served in the Army for a decade be­fore start­ing a re­tail ca­reer at chains in­clud­ing Macy’s.

For­mer Marine For­rest Cor­nelius was among the first to sign up at the ver­i­fi­ca­tion web­site when it launched in June, and got a chance to start shop­ping early to test it out. The 51year-old was im­pressed by the site and a deal he found on Ray-Ban sunglasses.

“The big­gest thing is price. They’re al­ways go­ing to be a lit­tle bit cheaper,” said Cor­nelius, who lives in Dal­las.

Un­der Shull’s lead­er­ship, the Ex­change stores have traded their in­dus­trial feel and reliance on off-brand mer­chan­dise for a more mod­ern look fea­tur­ing well-known la­bels.

Two-thirds of the main Ex­change store at Offutt Air Force Base re­sem­bles any de­part­ment store, with prom­i­nent dis­plays of name-brand makeup, Nike fit­ness gear and Carter’s clothes for kids. The rest is filled with the kind of elec­tron­ics, ap­pli­ances, house­wares and toys found at Wal­mart or Sears, with ma­jor brands in ev­ery sec­tion.

Pho­tos by Nati Harnik, The As­so­ci­ated Press

Staff Sgt. Alex Frank shops at the Mil­i­tary Uni­form store within the Ex­change at Offutt Air Force Base, Neb., in May. Start­ing in fall 2017, hon­or­ably dis­charged veter­ans will be el­i­gi­ble to shop tax-free on­line at the Ex­change with the same dis­counts they en­joyed at stores on base while they were in the mil­i­tary.

Tom Shull, CEO of the Army & Air Force Ex­change Ser­vice, checks a price tag at a store in­side the Ex­change at Offutt Air Force Base.

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