Words from Director/CEO Tom Shull: Preserving the Benefit through the Pandemic—A Job Well Done in 2020
Congratulations on the many successes of 2020! Despite the incredible challenges throughout the COVID-19 pandemic, Team Exchange has much to celebrate as you steadfastly brought mission-essential benefits to Soldiers, Airmen, Retirees, Veterans and military families. Well done!
At the onset of the pandemic, we committed to stabilizing our workforce and made it through the year without one layoff or furlough, a tremendous accomplishment as compared to the significant number of job losses others have seen, especially in service industries.
The Exchange covered 100% of COVID-related medical costs for associates enrolled in its insurance plan who were negatively impacted by the virus, providing stability during tumultuous and often frightening times. The Exchange paid more than $4 million in care that would have otherwise landed on sick and recovering associates’ shoulders. For those who needed to take time off due to virus, the Exchange paid more than 360,000 hours of COVID-19 leave so associates wouldn’t lose income when they needed to stay home.
In 2020, we rose to the challenge and succeeded. Thank you for leaning forward to take care of the heroes we are honored to serve.
Cash Conservation to Preserve the Benefit
When the pandemic began, we immediately implemented a plan to conserve cash. By the end of the year, we had conserved more than $500 million—an incredible achievement that positions us well to grow our business as we emerge from the pandemic in 2021. Your efforts and hard work in supporting conservation efforts have resulted in the Exchange being financially stronger than ever.
In 2021, we will continue to diligently and aggressively manage expenses and innovate to further strengthen the customer experience in-store and online to preserve the Exchange benefit for Warfighters, past, present and future.
Safe, Sanitized, Secure Shopping
The Exchange’s No. 1 priority is to protect the force and our teammates. Even before the CDC recommended face coverings or the Department of Defense mandated their wear, the Exchange distributed critical personal protective equipment to all frontline and distribution center associates.
Working in lockstep with local commands, the Exchange continued serving military communities around the world with innovative solutions, including personal shopper programs for quarantined troops; curbside pickup; buy online pickup in store service; mobile field Exchanges; and grab-and-go school meals overseas.
For the critical holiday selling season, the Exchange spread out sales events over 12 weeks to reduce crowds in its stores. This approach proved successful and positioned the Exchange as a leader in curtailing the spread of COVID-19 while continuing to serve those who serve.
Throughout it all, stores and directorates maintained enhanced sanitization measures such as acrylic shields at points of sale; disinfecting customer service and sales points multiple times daily; signing and floor decals reminding shoppers to wear face coverings and maintain a safe distance; and keeping restaurants open for carry-out service where dine-in service was unavailable.
Pivoting to Online Events
Exchange stores are not just retailers—they are so often the place where the community gathers. With the pandemic, many popular Exchange events could not safely take place. Thanks to associates’ creativity and flexibility, however, many community connection efforts shifted to the virtual realm.
The Exchange’s first-ever Facebook live series, “Chief Chat,” brought military leaders, Hollywood A-listers, elite athletes and more straight to the military community. Guests such as Chief Master Sgt. of the Air Force JoAnne Bass, Mark Wahlberg, Matthew McConaughey, Dwayne “The Rock” Johnson, Sean “Diddy” Combs and Garth Brooks provided a welcome morale boost for the more than 3 million customers who tuned in and connected with the Exchange.
E-commerce Steps Up to Meet the Surge in Online Shopping
While we certainly expected increases in e-commerce demand last year, we could not have forecasted the surge in sales we saw as shoppers sought low- and no-contact shopping options. ShopMyExchange.com sales—whether delivered or fulfilled locally through buy online pick up in store or curbside pickup—increased by more than 50%. Despite this unanticipated and sudden increase in orders and sales, the e-commerce team and store associates rose to the occasion and continued to operate while keeping the inventory up to date.
Digital Garrison App Keeps Army Communities in the Know
The Exchange launched an unprecedented partnership with the U.S. Army in 2020, debuting a mobile app customized for Army communities. The free app is a one-stop guide for post-specific information, including services available, store hours, dining options, gate closures, weather and more. Users can also shop the Exchange, customize their settings and keep their payment options in a secure mobile wallet on the app, which features the option for an easy fingerprint or facial recognition sign-in.
The Exchange is currently in discussions with the U.S. Air Force on the development of a similar app for the Air Force community.
New Uniforms Roll Out Exclusively through the Exchange
In November 2018, the Army announced it would adopt the classic Army Green Service Uniform as its new uniform, scheduled for rollout in 2020. The AGSU hearkens back to the era of World War II and the Greatest Generation. The Exchange, the only source for government-certified, authentic uniforms, began rollout of the AGSU with a select group of Soldiers at Fort Knox in July. Despite pandemic-related delays, Military Clothing stores at 22 Exchanges began selling the new uniform in 2020. Forty-four more Exchange locations are scheduled to begin selling the AGSU in 2021 in preparation for the mandatory wear date of Oct. 1, 2027.
Understanding uniforms are a sizable financial investment for our Warfighters, the MILITARY STAR® card program doubled the credit limit on its zero-interest Military Clothing Plan from $500 to $1,000 in 2020. The limit increase was the first since 1979 and extended the plan’s payment duration from eight to 12 months.
Weathering the Storm
Even while the Exchange’s Disaster Support Group (DSG) was managing our pandemic response, it still ensured stores along the East and Gulf coasts were prepared for hurricane season.
2020 saw a record number of hurricanes, but the Exchange worked before, during and after storms to ensure affected stores were well stocked with emergency supplies, gas, bottled water and more, while our distribution centers readied to ship more critical items at a moment’s notice.
The DSG ensured Region, Services & Food, Human Resources, Merchandising, Logistics and Communications teams were in communication early and often to keep merchandise and information moving and stores fully stocked.
Thriving Benefit for Veterans
Just over a year ago, on Jan. 1, 2020, the Exchange welcomed home Veterans with service-connected disabilities, Purple Heart recipients, former prisoners of war, and primary family caregivers enrolled through the Department of Veterans Affairs with in-store shopping privileges. These heroes earned the Exchange benefit, and it is truly an honor to again serve those who served.
The Veterans Online Shopping Benefit, which began in 2017, continues to bring savings and convenience to Veterans around the world. In 2020, approximately 110,000 Veterans placed more than $100 million in online orders, an increase of more than 100% vs. 2019. During a year when many sought to avoid in-person shopping for safety, the Veterans online shopping benefit was there for them.
Celebrating 125 Years of Service
On July 25, the Exchange celebrated its 125th anniversary of serving the best customers in the world. No other store can do what we do and that’s because of you. You are carrying on a continuing legacy of mission-essential service to Soldiers, Airmen, Retirees, Veterans and military families.
We remain a vital part of the military community, having contributed more than $2.2. billion to Quality-of-Life programs over the last 10 years. The work you do makes this support possible.
It has been a pleasure to read in the Exchange Post about so many amazing associates in the “125 Years of Family Serving Family” series. We have the best customers in the world and, the best associates in the world.
Family Serving Family
In this tumultuous year, the Exchange’s core value of family serving family has been more important than ever. Associates in every area have gone above and beyond, working long hours, transitioning to new duties, finding creative solutions and ensuring a safe, sanitized and secure workplace. Through it all, you have taken care of each other and our shoppers—you truly are family serving family.
Congratulations on a successful 2020. Across the organization, associates leaned forward to take care of our military communities and teammates.
We expect another challenging year in 2021, but we have solid growth and cash conservation plans in place to keep the Exchange on strong footing. We will continue to be flexible as we adapt to evolving circumstances and build on the successes we achieved together in 2020 to do even more for the heroes we are honored to serve.
There truly is no greater honor than serving those who serve!