The new civilian director of the U.S. Army and Air Force Exchange Service (AAFES) wants to put more money into the pockets of troops and their families through a new “personal dividend” program.
“I will feel like I have succeeded if, at the holiday, I can send out $100 to every active-duty soldier and airman and his or her family” in the form of a gift card, said Tom Shull, who became the first civilian director in AAFES’ 116-year history June 14.
The dividend would not only reward families for their service, he said, but also reward patrons for their purchases, much like many civilian retailers do.
So far it’s just an idea; there’s no timeline yet. And Shull said the concept could be broadened to “all authorized customers.”
If enacted, the idea also would benefit the exchanges, because it would bring customers into the stores to spend their gift cards.
For the exchanges, dividends traditionally have meant the millions of dollars in profits from sales that are returned each year to the services’ morale, welfare and recreation programs. Those dividends will continue, but this new personal dividend would allow customers to “decide how they spend it for themselves and their family,” Shull said.
Shull will also look at ways to drive down prices, starting with reviewing relationships with vendors.
“Clearly, our customers are not as satisfied as we’d like to see them be,” he said. “It’s partly a perception issue, which we need to correct and [make] them more aware of how competitive we really are.”
AAFES also should “probably be more aggressive in competing for various businesses,” he said.
AAFES will work with the other exchange services to do some seasonal bulk buys together — gaining better pricing and saving shipping costs — on items such as outdoor furniture and Christmas products, said Mike Howard, AAFES’ chief operating officer.
In his first three months, Shull will assess the strengths and weaknesses of the organization, based on his instructions from the AAFES board of directors. But he already knows a priority will be growing the exchange’s online sales, which now represent about 2.5 percent of overall sales.
The retail industry average is 7 percent to 11 percent.
Part of that effort will involve making more items in stores available online.
“We want to make sure that everything is matched, so that if they leave the store they can go online and order it,” he said.
Strengthening online sales will help customers who aren’t near an exchange, or may not be in the future if stores are closed because of force structure changes, he added.
There are about 12.4 million authorized exchange shoppers, and AAFES has email addresses for about 300,000 of them. Shull would like to get that number closer to 4 million, to let customers know about special events and sales.
Shull, a 1973 West Point graduate, left the Army as a major in 1983 and has spent 25 years in the retail industry. He was chosen by the exchange’s board of directors following a process led by an executive search firm.
Last year, the Defense Department directed AAFES and Navy Exchange Service Command (NEXCOM) to convert their top jobs, held by military officers, into civilian positions. Retired Rear Adm. Robert Bianchi, who served as NEXCOM’s commander from 2007 to 2009, was rehired to the same position as a civilian.
Shull has been a “turnaround expert,” working over the years with companies ranging from Barneys New York Inc., to Macy’s and Wise Foods.
Although he could command a far greater salary than what AAFES pays him, money wasn’t a consideration, he said. He comes from a military family, as does his wife.
“I felt like I never finished my career,” he said. “I’d been talking about how I could get back and serve again.”