Americans enlisted in the Army and Air Force and their families don’t have to wait for a leave to sample the latest from Estée Lauder or L’Oréal. Instead, they can pop into the AAFES (Army Air Forces Exchange Service) store on base and find virtually everything typically found at department stores, drugstores and food stores under one roof.
What’s unique about AAFES stores is that since they don’t compete directly with prestige outlets, many premium brands have opened up distribution to their doors.
On the high end, AAFES stocks Estée Lauder, Clinique, Lancôme and Elizabeth Arden. Beauty advisers are on hand to help shoppers with the prestige lines. To offer a variety of price points, however, the stores also offer mass brands including Cover Girl, Revlon, Almay, L’Oréal and Maybelline. AAFES is also testing Avon in two stores. And, the company is staying in tune with hair-care trends by adding four feet of salon brands to its health and beauty care department.
AAFES, based in Dallas, currently operates 105 stores in the continental U.S. and 51 sites overseas, producing retail sales exceeding $7 billion. There is a worldwide customer base of more than seven million, including two million people in active duty, their families and more than three million retirees.
With an increase in the nation’s military efforts, the stores are also busier, with overall sales through June up 4 percent over the same period last year. The beauty business expanded about 1 percent, according to Fred Bluhm, AAFES spokesman.
Beauty is important business at AAFES. Internal studies have shown customers spend more than 34 percent of their available beauty income with AAFES. AAFES is aiming to move that percentage even higher, said Louise Reza, the category manager team manager for jewelry fragrance and cosmetics..
Since AAFES customers are frequently in a hurry, the store favors a "concept" approach to merchandising that presents beauty as a store within a store. Two years ago, AAFES first tested a concept store where fragrances and cosmetics were merged in an area near jewelry. Reza said the concept encouraged shoppers to browse as long as they wished or simply drop in for a quick need. Sales in the initial test rose 10 percent, and the concept has been rolled out.The concept design has actually allowed AAFES to condense the space it needs for beauty while allowing the company to make a brand and price statement. The size of the department ranges from 1,200 to 4,300 square feet. AAFES is working on a universal fixture to showcase its prestige products. The departments are upscale and carpeted — more reminiscent of a department store than a mass market outlet.
Another major department for AAFES is bath and body. Again, a destination concept department was created in 2000 that helped the company achieve bath and home fragrance sales exceeding $19 million that year, a 36 percent increase over 1999. In January, AAFES introduced a private-label bath and body line called Cherish The Feeling.
Like many merchants, AAFES also looks for new items to differentiate its assortment. Although there aren’t competitors on bases, AAFES must compete against Wal-Mart, department stores and specialty stores.
Teenagers have become a hot market segment for AAFES, and a new budget private-label beauty brand will be launched this fall to tap that market, as well as women looking for value pricing. The line will be called Cherish The Look and include lip gloss, mascaras, eye shadows and makeup kits. At the other end of the spectrum, Reza said she’s excited about a skin care product to serve aging baby boomers.
AAFES stores also sell everything from tools to jewelry, including many brand names such as Adidas.
AAFES stores make a huge difference for people in the service. "That’s our big night out on the town...going to AAFES," said Doug Holzbauer. "You really can get everything you need without having to fight crowds."
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