1. Defense Commissary Agency
Valued Benefit of a Global Force
American Logistics Association October 3, 2018
Play DeCA video as Admiral Bianchi approaches podium.
RDML(R) Robert J. Bianchi
Special Assistant to the ASD(M&RA)
for Commissary Operations

2. Agenda Charting a Course for Success
Update on Initiatives to Bring Customers Back
Shaping the Future with EBS
Customer Savings
Sales Update
Partnering for The Win – A Fresh Focus on Collaboration
Improving the Supply Chain
On the Horizon
No notes

3. Charting a Course for Success
Key Points
Initiatives to bring commissary customers back
Reaffirm “customer first” principles that make commissaries a valued benefit
Enhance collaboration and partnering with military resale community to leverage our combined strengths
Improve our technological capabilities to improve operations and enhance the customer experience
Collaborate with industry – develop joint plan focusing on retail’s best practices for bringing customers back to military resale
No notes

4. “YES” Program “YES!” – Your Everyday Savings
Launched June 1 at all 168 CONUS stores
Over 500 items referred to as image items that are most frequently purchased and influence price perception, including produce items
Customers have taken notice and item movement is trending positive
Commissaries, manufacturers and customers are all winning
Month
Total Sales
Total Units
Mar-May
$26,691,232
11,770,165
Jun-Aug
$26,935,100
14,127,155
Change
% Change
$243,868
0.9%
2,356,990
20%

5. Commissary Store Brands
Commissary patrons seek value and choice
Nielsen reports that PL accounts for approximately 18% of all sales AOC
CSB performance is on track and commissary patron acceptance is growing
Cumulative sales > $70M
Cumulative units sold > 35M
Steady weekly 3-4% units and sales growth
Over 700 items available / ~ 3% of line items

6. Commissary Store Brands
Commissaries are growing spend share with CSB particularly
among our loyal core heavy shoppers
CSB share of wallet increasing rapidly among all commissary customers
~ 10-15% of every dollar spent within these 4 categories goes to CSB
Among heavy commissary shoppers, share of wallet is growing even faster
~ 31-47% of every dollar spent within these 4 categories goes to CSB

7. DeCA First Year Unit Share Goal Current DeCA % of xAOC ROM
Commissary Store Brands
Performance to date has occurred with minimal marketing and promotion
Going forward more emphasis will be placed on marketing
Signage is key for both CSB and national brands
Constant review enables informed category decisions
Performance varies in categories containing CSB and we are closely monitoring sales trends, units and pricing versus AOC market to develop future strategies
Tremendous growth potential for national brands in commissaries
Currently >98% of sales and 97% of items are national brands
CATEGORY
DeCA Unit Share
DeCA First Year Unit Share Goal
xAOC ROM
Current DeCA % of xAOC ROM
FROZEN FRUIT
76%
38%
101%
COCONUT
70%
34%
68%
103%
DISPOSABLE BAGS
52%
25%
51%
100%
FOOD STORAGE/WRAPS
26%
98%
WATER
46%
23%
47%
BABY FOOD
39% 4% 8%
483%
DRIED BEANS
27%
54%
MUSTARD
20%
40%
64%
CREAM CHEESE
41%
58%
TOMATO PASTE & SAUCE
22%
44%
50%

8. Vendor Shelf Stocking Pilot
6 month proof of concept began May 14 at Little Creek Commissary
Items formerly stocked by vendor shelf stockers are now stocked by Navy Exchange personnel on a reimbursable basis through an MOA
Replaces inefficient and ineffective vendor stocking causing unacceptable not-in-stock rates
Vendor stocked items sales and units have increased
Sales %
Units – 2.78%
6-month pilot with possible expansion based on analysis outcomes
Initial results point to a proof of concept pilot at an additional store
Working with NEXCOM for possible deployment in NS San Diego area

9. Beer and Wine Initiative
Program kicked off July 23 with 12 commissaries:
Sam Houston Quantico White Sands
29 Palms Arnold Port Hueneme
Leonard Wood Nellis Lakehurst
Little Creek Shaw Myer
90-day initial deployment began with a convenience selection of beer and wine, as recommended by the DeCA and exchanges working group
The team continues to monitor performance and streamline processes
Total sales through September 22 – $173,036
Beer - $90,175
Wine - $82,861

10. FastLane Self-Checkout & FastLane Fusion Pulse Real-Time Insights
Shaping the Future with EBS
Technologies coming soon to the commissaries:
Customer portal – enhances everything from couponing to electronic receipts
Scan, pay and go mobile shopping
Online real-time ecommerce solutions that enhance the shopping experience and Click2Go order picking and fulfillment
Real-time management dashboards and reports
Improved merchandising and inventory tools
Next-generation CARTS RM hardware, including Mobile POS and Convertible SCOs
Store-Specific
Planograms
Customer Loyalty
& Promotions
FastLane Self-Checkout & FastLane Fusion
eCommerce
& Click 2 Go
Mobile
Shopper
Digital Receipts
& Coupons
Store Portal
Power DAX Replenish
Loss
Prevention
NCR
Central Reports
Power
Picking
Pulse Real-Time Insights

11. EBS Fort Eustis Pilot Power DAX / IM
Enables perpetual inventory management &
predictive ordering based on demand forecasts
Reduces days of supply & inventory levels,
minimizes out of stocks
Distributor Data Exchange Enhancements
Provides daily Power HQ file updates on items added, plus active/discontinued items
Provides daily Power HQ promotion files, supports better forecasting for all DP periods, reduces promotional NIS’s & dead stock promotional items
Incorporates Distributor Item Availability date in Store Portal
Bill Back Manager – In Store VCMs
VCMs added to Store Portal to change the POS price & create agreement in BBM
Autogenerates invoices, improves accuracy & eliminates manual invoicing at store-level
Store-Specific Planograms
Space and assortment-optimized based on item & category performance
Helps in balancing days of supply and shelf life, reducing inventory of slow-moving items, & better targets local patron demands
CARTS Point of Sale
Next generation Click2GO

12. Customer Savings Baseline Global Savings = 23.7%
FY2018 Q3 SAVINGS ANALYSIS (SAME-STORE) Baseline Global Savings 23.7%
2016 Baseline Savings %
(Q3 Stores)*
FY 2018 Q3
Savings %
New England (10 of 36 stores)
21.5%
20.5%
South Atlantic (6 of 30 stores)
19.1%
19.7%
South Central (7 of 33 stores)
17.2%
19.6%
Pacific (9 of 31 stores)
20.3%
21.7%
Mountain (5 of 20 stores)
17.4%
20.6%
North Central (5 of 18 stores)
17.0%
18.7%
Alaska/Hawaii (2 of 9 stores)
33.7%
35.6%
U.S.
20.8%
Overseas
44.0%
43.2%
Global
23.2%
24.4%
Baseline Global Savings = 23.7%

13. Sales Update

14. Shopping Households

15. Getting Product on the Shelves
Improving fill rates is a shared responsibility
Any given week we experiences numerous issues:
Manufacturer shorts/cuts
Out of stock
Late deliveries to distribution centers and stores
Item rejections, new items ordered before availability date and continued ordering of phased out/deleted items
BOH is incorrect
Opportunity for shared improvements
3-5% of these items were related to DeCA process for new/phased out items and inaccurate promotional forecasting – EBS Distributor Portal will enable more timely corrections and updates to catalog file
The remainder is primarily attributed to manufacturer shorts but a small portion is attributed to distribution issues – this is where you can help

16. Partnering for the Win Forward together
Collaborative business planning
Open lines of communication
Transparency
Innovate with industry – bring your ideas
July 25 joint business planning
Developed category-focused plans to increase basket size, value and transactions
Identified key goals and strategies that will grow our business
Planning will be ongoing in future Category Manager/Supplier meetings
Scorecard to measure performance – under development
Focused on mutual objectives
Measures Financial (sales, transactions), Shopper (trips, closure, SOW), and Operational goals (in-stock, supply metrics)

17. Partnering for the Win Shared Market Focus
Marketing to drive sales and traffic
Leverage social media
Live video events – Approximately K online engagements
Little Creek Summer Celebration BBQ
Fort Bliss Nathan’s Hot Dog Contest
5 Pro Camps
Smuckers breakfast
Sharing marketing digital content on DeCA platforms
Commissaries.com
Commissary social media

18. Improving patron experience
Partnering for the Win
Improving patron experience
Leverage strength of military resale community
Optimize military identity
Promotions that create excitement & bring back customers
Working jointly with military resale community
Cross promotional coupon
with Navy Exchanges
Joint promotional calendar events
April Month of the Military Child
April Military Star Card
Fill Your Fridge for Free
May Military Appreciation Month
June Healthy Lifestyle event
August Back to School event
October We Care Deployed Recognition Event
Military Star Card
Gift card sales
November Home for the Holidays Sweepstakes
December Military Star Card Bill on Us Sweepstakes
January Fit Family Month

19. Constantly Evolving to Remain Relevant
On the Horizon
Meal Solutions
Meal kits – testing first pilot at 10 commissaries in days
Expansion of prepared food options
Increase individual portion offerings for single members
New customer feedback tool
Expand Click2Go
Expansion of commissary privileges – 2019 NDAA
Extends commissary privileges to DAV, POWs, Purple Heart and Medal of Honor recipients
New customers would not begin shopping until 2020
Customer Focused &
Constantly Evolving to Remain Relevant
Sell commissary gift cards in exchanges and exchange gift cards in commissaries
To improve shelf in-stocks, test new stocking model using Navy Exchange employees to stock shelves at Little Creek commissary

20. Thank You!
No notes