Online orders, curbside pickup: Commissaries a-changin’

September 27, 2012

by Tom Philpott

Commissary patrons will soon see the "biggest transformational effort" made by the Defense Commissary Agency in its 21-year history, says DeCA Director Joseph H. Jeu.

For starters, by this time next year military families might be ordering groceries online, Monday through Friday, with service members or spouses being able to pick up the order curbside on their way home from work.

Perhaps not many months after that, military shoppers with smart phones will be able to use them to compare commissary prices with commercial supermarkets and make instant buy decisions, all through a secure application available only to military patrons.

Also, in areas of the country with several military bases, such as San Diego, San Antonio and Virginia’s Tidewater area, DeCA plans to test alternative store designs including the "warehouse" experience and bulk products found at stores like Costco and BJ's. But warehouse commissaries should offer even deeper savings, Jeu said. Long term, they also might allow DeCA to hold down construction costs.

With its embrace of online and smart phone technologies – what retailers call "e-commerce" and "m-commerce" – DeCA also plans to use social media like Facebook, Twitter and YouTube more routinely to get real time feedback from patrons who have complaints or good ideas.

These changes, which echo popular initiatives in the commercial marketplace "will position us well into the 21st Century, at least for the next 20 years," Jeu told me in a phone interview from DeCA headquarters at Fort Lee, Va. "This is an exciting time for all of us."

To allow online and smart phone access to commissary products and prices, DeCA will set up a process to authenticate user eligibility through DEERS, the Defense Enrollment Eligibility Reporting System, Jeu explained.

The commitment to more modern approaches to commissary operations are set down in a new DeCA vision statement to enhance the commissary experience without driving up the annual $1.4 billion subsidy.

The first initiative "you are going to be seeing is the model like Harris Teeter where you can order online for pick up at the curbside," Jeu said.

DeCA is "working vigorously" on this, he said. It already has tested the concept successfully with sandwich orders at the Fort Lee commissary. It also has tested pre-ordering and pre-payment processes using its Guard and Reserve onsite sales program which bring limited commissary orders to drill units in more remote states like Wisconsin, Minnesota and North Dakota.

The online order concept will be more fully tested next spring, again at Fort Lee but also at one or two other locations. If successful, it could become worldwide by fall next year. Online orders will be Monday through Friday only, Jeu said, when it makes the most sense for working families.

DeCA doesn’t expect to have to hire more staff to process and bag online orders and place them in a refrigerated space for pickup. But that’s what full store testing will determine, Jeu said.

No timeline is set for testing use of smart phones to comparison shop commissary prices without retail grocers, Jeu said. But that will follow on the heels of successful launch of online ordering.

DeCA wants to test warehouse stores and "other concepts," Jeu said. "There’s a lot of different ideas to deliver our commissary benefit to more people and more efficiently, and to a younger generation."

Young commissary shoppers, he said, "grew up using electronics, shopping from homes, with social media and they just buy things differently. So we want to make sure they take full advantage of this commissary benefit that they so earned."

Warehouse commissaries will operate in areas where military shoppers still have the choice of a traditional commissary. Items won’t be as varied but product will be sold in bulk quantities. "And we believe we should offer a greater discount" Jeu said.

The most recent American Customer Satisfaction Impact (ACSI) survey of grocery store patrons showed commissaries earning an average score of 81 percent versus a 76 for commercial grocers. DeCA’s score was higher than every supermarket chain except Publix, which has stores from Tennessee southeast through Florida.

Given the savings that commissaries generate, Jeu said, DeCA does not feel threatened when chains like Harris Teeter begins to offer online orders and curbside pickup. But DeCA studies shopping trends and will update its business model, as it is now, to sustain customer satisfaction.

Exchanges, or department stores on base, also will be evolving for the electronic shopper. For example, the Army & Air Force Exchange Service has announced that patrons soon will be able to browse and buy online all of the same products that are sold at large main exchanges.

"Ultimately, National Guard, Reserve, retired and active duty shoppers will be able to enjoy the same selection online as they would find at Fort Campbell, Kadena Air Base, Japan, or Kaiserslautern Military Community Center, Germany," said Col. Tom Ockenfels, chief of staff for AAFES.

DeCA, said Jeu, "has a responsibility to innovate and avoid becoming stale." That would make the prized commissary benefit, which is a critical element of non-pay compensation, less "relevant" to patrons.

Commissaries sell groceries and household products at cost plus five percent. The surcharge goes toward store maintenance and new construction. But to operate its 248 stores worldwide, DeCA needs an annual appropriation, which is taxpayer support.

In return for that $1.4 billion subsidy, military shoppers save an average of 32 percent on brand name products and local staples like milk, bread and fresh produce. DeCA estimates the typical military family-of-four saves $4400 a year using commissaries. The total value of those savings is more than $2.8 billion for a two-for-one return on the subsidy, Jeu said.

That subsidy is a frequent target of debt reduction studies. And DeCA could see an arbitrary cut of 10 percent if Congress allows the across-the-board "budget sequestration" knife to fall, as scheduled, on Jan. 2.

To comment, write Military Update, P.O. Box 231111, Centreville, VA, or send email to milupdate@aol.com