Even Army brats need high-end lipstick

DSN Retailing Today, August 2, 2004

Shoppers at the Army & Air Force Exchange Service, best known by its acronym AAFES, are equally likely to find a white-coated beauty adviser applying makeup to teenage girls on prom night as to bump into a uniformed active-duty serviceman shopping for automotive supplies. Like big-box retailers, AAFES offers a full variety of merchandise to authorized military personnel and their families through 205 stores on Army, Air Force and Marine installations around the world. But what elevates AAFES beyond commissary status is its bright, spacious and easy-to-navigate cosmetics department rivaling those in upscale department stores.

Dominated by prestige brands like Lancome, Clinique, Estee Lauder, Elizabeth Arden and Fashion Fair Cosmetics, a premier line for women of color, AAFES also will introduce the prestige brands Shiseido and Rimmel to select stores later this year.

Its cosmetic departments average about 2,500 square feet, 60% of which is occupied by prestige-brand cosmetics. A neutral steel and white color scheme lend an authoritative, clinical feel to the department, similar to a dermatologist's office. Plenty of handheld mirrors flank waist-high tables with drawers filled with sample products for customer makeovers and product recommendations.

Overhead signage denotes the cosmetics department, with popular prestige lines grouped by brand to attract impulse shoppers.

"We stress name brands to draw customers into the department," said Louise Reza, divisional merchandise manager for jewelry, fragrance and cosmetics.

Promotional items also are set apart from the main assortment as a traffic builder. Branded mixes, however, vary between store locations based on local demographics, sales history and available square footage, according to Reza.

On average, AAFES cosmetic departments carry 3,000 items between its beauty and skin care lines. "Anti-aging products are currently some of our fastest-selling items," Reza said. "In mass cosmetics, our No. 1 SKU is Wet 'N Wild's black brow liner; and AAFES' Cherish the Look [its private-label brand] cosmetic wedges follow closely as the No. 2 SKU."

Other bestsellers include Clinique's Dramatically Different lotion (AAFES' No. 1 SKU in the prestige category), and select foundations from Estee Lauder and Clinique.

Special events and promotions also are bringing more customers to the cosmetics department. Sales promotion strategies another key to building traffic, Reza said.

A "Beauty Days" promotion at the Clinique counter at the Robins Air Force Base AAFES in Georgia, coinciding with the local high school prom, contributed $10,000 to weekend sales, according to The Exchange Post, an AAFES newsletter. The Exchange Post also reported that at the Randolph Air Force Base AAFES in Texas, a team of six Lancome makeup artists helped launch its newest makeup line, Color ID, contributing to a 26% increase in sales.

Another standout for AAFES is its everyday low prices. A survey conducted by Comparative Prices International, which sampled everyday prices of 325 items at AAFES stores and compared them with competing retailers near military installations in six military communities, found AAFES prices were on average 21.89% lower than competitors. Notably, the savings were on top of authorized customers' tax-free advantage in shopping AAFES.