Direct Marketing Catalog/eCommerce - Exchange

Brian LamoreauxMerchandise ManagerDirect MarketinggCatalog/eCommerce

Multi‐‐channel RetailingMultiMulti Channel retailers account for 75% of online salesRetailing to customers through all available selling channels Stores Catalog eCommerceCustomers Choice Shopping when, where and how desiredM k i across allll channels:Marketinghl cross merchandisingh di i Tabloids eMail Newsletters Direct Mail Web

Working TogetherExtension of store stock assortmentsExpandedpassortments in keyy categoriesg Electronics Personal Computers Furniture Jewelry Major AppliancesSatisfying OUR customers’ needs Highest Volume Day of the Week:Wednesday (1100 – 1200 Hrs)

Who is shopping us?Active dutyRetiredReservesNational GuardOther38%32%11%11%8%ArmyAir ForceNavyMarinesCoast GuardOther*46%32%14%5%1%2%* Includes AAFES, DOD Civ, State Dept, etc

Catalog/eCom StrategyOverall Strategy- Catalogs & eCommerceSeveral ways to do business- Warehouse (Memphis, Giessen & Yokota)- Based on cost effectiveness- Dropp Shipp (Preferred(Method))- Accounts for 75% Cat/eCom sales- Requires EDI or ECOMS participation- Virtual Vendor- Exchange OnLine Mall

Catalogs2 Big Books Fall/Winter Spring/Summer20 Specialty andSupplementalpublicationsHome Décor, ODL, Kids, Appliances, Electronics, Jewelry, Fashion, and more

OnLine Opportunities130,000 SKU’s with 30,000 keys are on our web site.Most are not featured in a catalogPromotional OpportunitiesHome PageLanding PagesBannersTopLeft‐SideCoordinating items“Push”Ability to push specific suppliers or products to the top of thepage7

Virtual Vendor Business ModelMirror all or part of supplier’s online store- Ability to accommodate a link- Establish pricing- Ability to refine assortmentBuy through Exchange Online Shopping Cart- Customer checks out only once- Orders sent to vendor for fulfillment (drop ship)POC: Rosa Sifuentes, sifuentes@aafes.com214-312-2450

Virtual Vendor Business ModelDell Computers & Accessories 2009: 17M2009 Fillpoint (Gaming) 9.5M NewN AAge ElElectronicst i 3.1M 3 1M Alienware 2.3 OOfficece Depotepot 1.3M .32009 Virtual Vendor Sales 41.1 M

Exchange OnLine MallExchange OnLineMall concessions (110 Shops): Provide customer discounts from 5%-25% off on purchases Offer selection and stylesy from recognizablegbrands Supplements exchange store assortments Allows exchanges to utilize floor space and inventory investmentin other categoriesgFY 09 Sales - 15MOur customers saved almost 2M by choosing to shop the ExchangeOnLine Mall stores over the retailer’s regular sites!

Exchange OnLine Mall

Special Order Program345 vendors now available online and by phoneCustomers can easily request items not available inthe Exchange Catalog or OnlineAvailable 24/7

Catalog/eCommerceCatalog/eCommerce Sales History2002 Sales 114.5M, 17% increase2003 SalesS l 151.6M, 151 6M 32% increasei2004 Sales 157.9M, 5% increase2005 Sales 193.5M, 193 5M 23% increase2006 Sales 222.9M, 15% increase2007 Sales 240.5M,, 3% increase2008 Sales 216.8M, 10% decrease2009 Sales 214M ‐1%

Distribution of Earnings to Main Stores100% of Catalog/Internet earnings within 40 miles ofthe AAFES Main StoreDistribution is after MK pays other ServicesEach AAFES Main Store will receive a ppercent ofearnings based on percent of sales to the total

Top Ranked Stores in 2009CentralFt Campbell: 32,969*Ft Hood: 25,034*Eglin AFB: 14,210Scott AFB: 13,776NAS Ft Worth: 12,138EasternFt Bragg: 26,526*Ft Belvoir: 25,747Langley AFB: 22,823Ft Hamilton: 19,586MacDill AFB: 18,217WesternSan Antonio: 52,548*Lewis/McChord: 31,794* Los Angeles AFB: 20,129March AFB: 19,614Luke AFB: 17,248PacificHickam: 7,190Elmendorf: 6,793Schofield: 6,183Yongsan: 5,175Foster: 3,707Europe/OEF/OIFHeidelberg: 4,621Grafenwoehr: 2,845 Bamberg: 2,160Lakenheath: 2,153Spangdahlem: 2,032Almost 1.5Mpaid in 2009!

Social Media

Reaching More CustomersGoal is to increase:– Awareness of online site– Military Star usage– Repeat purchasePrint Ads/TabloidsIn Store signsElectronic NewslettersTargeted customer mailingsMilitMilitaryStarSt statementt tt adsdTheater Slides/Radio adsIcons - Make it easySocial MediaSurveys

ContactsECOMSLaura MansfieldEmail – mansfieldl@aafes.comPhone ‐ 214‐312‐4621OnLine Mall ProgramsChris HillEmail – hillchristo@aafes.comPhone – 214214‐312‐2880312 2880

Contacts214‐‐312214312‐‐XXXXHome TeamGMM & Home DecorJennifer Stinchcomb 4421stinchcombj@aafes comstinchcombj@aafes.comSmall AppliancesChristine Stowski 4163stowski@aafes.comHome FurnishingsBrian Lamoreaux 6942lamoreauxb@aafes comlamoreauxb@aafes.comMajor AppliancesYolanda Thursby 2147thursby@aafes comthursby@aafes.comTabletopTerri James 6823jamesterri@aafes.comHardlines TeamGMM & ODLJi TrussellJimTll 6524trussell@aafes.comGiftwareAlexanderAld MacKenzieM Ki 2321mackenzie@aafes.comToysKristina Jonker 2828carmoncolemand@aafes.comSporting goodsJosephJh KasalesK l 3236kasalesj@aafes.comOnLine MallChris Hill 2880hillchristo@aafes.com

Contacts214‐‐312214312‐‐XXXXS ftliSoftlinesTeamTGMM & Juvenile FurnitureJanean Baker 4375bakerz@aafes combakerz@aafes.comJewelryPam Thompson 6964thompsonps@aafes comthompsonps@aafes.comFootwearErica Cordova 3388cordovae@aafes.comd@ fApparel IIMartina Aos Seyfert 2997seyfert@aafes.comf t@ fWatches / CosmeticsJohn Carmichael 6486carmichaeljo@aafes comcarmichaeljo@aafes.comElectronics TeamGMM & ElectronicsRandy Owens 2406owensbr@aafes.comiPODS / PortablesAlleana Fuller 2632fullerall@aafes.comElectronicsMark Moody 4376moodym@aafes.comComputersStef Curtis 6708curtiss@aafes.com

Questions?

-Accounts for 75% Cat/eCom sales-Requires EDI or ECOMS participation-Virtual Vendor-Exchange OnLine Mall. Catalogs 2 Big Books . GMM & Juvenile Furniture Jewelry Watches / Cosmetics Janean Baker 4375 Pam Thompson 6964 John Carmichael 6486 bakerz@aafes combakerz@aafes.com thompsonps@aafes comthompsonps@aafes.com carmichaeljo@aafes .