Commissaries to Offer New Innovations, Conveniences

By Donna Miles
American Forces Press Service

WASHINGTON, Oct. 10, 2012 – The new commissary rewards card now offered at all 247 military commissaries worldwide offers a glimpse into what the Defense Commissary Agency is working to provide its customers: the same selection, conveniences and quality as the most popular commercial grocery store chains, but even better customer service and lower prices.

That’s the vision of Joseph H. Jeu, who took the helm of what amounts to the nation’s 11th-largest grocery story chain a year and a half ago and is steering into new waters to provide patrons what he calls the “Commissary Benefit 2020” -- the most advanced commissary service they’ve ever experienced.

“We have to pay attention to what happens in the private sector, know the trends and be sure we are right along with them or maybe, in some ways, ahead of them,” Jeu told American Forces Press Service. “We want to be equal or better.”

By many standards, military commissaries are already there, he noted. Patrons rated commissaries at 4.72 on a scale of 5 on a recent commissary customer satisfaction survey. In the industrywide American Customer Satisfaction Index, commissaries ranked 81 -- six points above the industry average of 76. Only one commercial grocery chain scored higher.

Jeu attributes some of that success to the fact that military family members, retirees and veterans make up 64 percent of the commissary workforce. “When two-thirds of your workforce is military related, it means we understand who our customers are and what they are going through,” he said. “It says, ‘We care and appreciate what you do.’”

But Jeu acknowledged that the biggest attraction commissaries offer boils down to price. Selling products at 5 percent over cost, with the surcharge invested directly into new construction, renovation and equipment upgrades, commissaries typically save shoppers about 32 percent compared to civilian supermarkets. Savings are even higher in some high-cost areas, such as Hawaii, where commissary shoppers typically save about 50 percent.

Looking ahead, Jeu is exploring new ways to maximize consumer savings without increasing the $1.4 billion subsidy Congress authorizes to operate the commissaries.

For example, the new commissary rewards card allows shoppers to download coupons directly onto the card and redeem them at checkout. Fort Lee, Va., home of the Defense Commissary Agency, served as a test bed for the cards in August, and as of early this month, they’re available at every commissary worldwide.

Jeu said he’s been amazed at how well the cards have been received, even among coupon-savvy commissary shoppers who typically rank within the top three among the nation’s top coupon clippers. About half of those who received a card went online to register it into the system so they could begin using it.
“That’s a very high rate of acceptance,” Jeu said. “This is a service our customers very clearly accept.”
Another idea in the works is the opening of warehouse stores that offer even deeper discounts by selling products in bulk.

Jeu is eyeing regions with multiple commissaries -- Virginia’s Tidewater area, San Antonio and San Diego, among them -- with hopes of converting one traditional commissary into a “box store.” The first could happen sometime next year.

In addition to bulk items, each warehouse store will sell meat, produce, deli and bakery goods, but with a smaller selection than at traditional commissaries, he explained.

Meanwhile, recognizing a growing trend in the commercial grocery industry, DECA is exploring ways to connect with and serve its customers using online technology and smartphones. In a test started about a year ago at Fort Lee, commissary customers can order a customized deli sandwich online, then pick it up at the store.

Now Jeu wants to expand the concept to allow customers to preorder groceries online, then arrive at the commissary to find their order packed and ready for pickup. DECA plans to test the curbside pickup plan from Mondays to Fridays beginning in the spring at Fort Lee and possibly one or two other commissaries to see how shoppers like it.

“I believe it will be successful, and if it is, we will expand it to other stores,” Jeu said.

Also using online technology, DECA plans to extend its services to more parts of the country with large populations of reserve and National Guard members, but no commissaries. That initiative, started on the West Coast in 2008, enables reserve-component members to preorder and prepay electronically from a selection of several hundred items, most sold in bulk. Trucks arrive at a designated site with the orders packed and ready for pickup.

During the last fiscal year, DECA staged more than 100 of these onsite sales. “It worked out pretty well,” Jeu said. “We definitely want to do more of that.”

Recognizing how comfortable its customers, particularly younger ones, have become with smart phone technology, DECA plans to branch out into what industry refers to as “mobile commerce.” A new app to be introduced soon will provide generic information about store locations and hours and sales promotions.
But Jeu plans to broaden the service so shoppers can use their smartphones to get price comparisons and even place grocery orders. To ensure only authorized users have access to the system, they will enter their Defense Enrollment Eligibility Reporting System, or DEERS, information, he explained.

While giving commissary shoppers more options and more convenience, DECA continues to ensure it’s providing the items they want. “When a new product comes out, we want to have those items at the same time as commercial grocery stores,” Jeu said, while removing stock that’s not moving from its shelves. “It’s a constant balancing act, and something we constantly monitor,” he said. “We want to be sure we are offering the products our customers want.”

To continue to do so, DECA continues exploring ways to reduce overhead and streamline its operations.
It’s been an ongoing process that began with the merger of four separate commissary systems into one in 1991, Jeu said. That consolidation weeded out duplication, creating a more streamlined organization that has reduced operating costs by $700 million over the past two decades.

“For the last 20 years, we have done our part, but we will continue to search for new efficiencies, and at the same time, provide the same level of savings for our people,” Jeu said.

At the same time, DECA stands as a Defense Department model, boasting 10 consecutive years of “clean” annual financial statements -- something Defense Secretary Leon Panetta wants institutionalized departmentwide by 2015.

While exploring and rolling out new services and offerings, the DECA staff plans to tap into Facebook, Twitter and other social media to better-connect with its customers.

“We want this to be interactive, to ask questions of our customers. What do they think of this new concept? Do they have new ideas of how we can do better?” Jeu said. “We want to be asking more questions to ensure we continue to live up to our customers’ expectations.”