Vets’ exchange discounts move online
OFFUTT AIR FORCE BASE, Neb. — 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 such as 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.”
The 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.
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.
Retired 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 51-year-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.
The exchange, which is part of the Defense Department, reported earnings of $384 million last year. That’s a sharp contrast from five years ago when Shull arrived to projections of $180 million in losses.