For a U.S. sailor stationed in a faraway post, there might be no more welcomed sight than a pair of Levi’s jeans or a tube of Crest toothpaste. The familiar brands and flavors of home bring these men and women a great deal of comfort when they are thousands of miles away from loved ones for months at a time. To make sure they can get these comforts, the Navy Exchange Service Command (NEXCOM) was established in 1946.
Today, NEXCOM operates 300 stores around the world with 14,000 employees who provide the Navy’s men and women and their families a wide array of retail products and services. Of NEXCOM’s $3 billion in annual revenue, 70 percent of profits benefit the Navy Morale, Welfare and Recreation (MWR) program, with the remaining 30 percent retained for capital reinvestment in NEXCOM facilities.
MWR provides active-duty, reserve and retired Navy personnel and their families with a variety of recreational, social and community support activities around the world. These include physical fitness activities and child development and youth programs, in addition to food and beverage services. The goal of MWR is to provide quality support and recreational services and promote the wellbeing of the sailors and their families.
NEXCOM CEO Robert Bianchi is a 30-year Navy veteran who led NEXCOM as an active duty flag officer from 2007 to 2009. Bianchi retired from the Navy in 2011 and, when the job became available for civilians, he applied and was hired in January.
Bianchi is in a unique position to understand his customers. “I’ve been on both sides of the fence,” Bianchi says. “I was the NEXCOM Commander for two years, and I have been a consumer of the NEXCOM products and programs, so I can view the process through the lens of our customers.” The Navy veteran wants to make sure that NEXCOM services and products always have a positive impact on the sailors and their families. “Having lived through that for almost 30 years in uniform, it gives me the perspective of always putting the sailors first. It is not always about the bottom line.”
In fact, NEXCOM will go anywhere sailors are stationed. “We have stores in very remote areas, like China Lake, Calif., where there is nothing for miles around,” he notes. “We are there because the Sailors are entitled to this benefit.”
The stores also vary in size and in the services they offer. “There are 10 categories of stores, with 7,000 different planograms,” Bianchi says. “We have facilities ranging from a 300-square-foot store in Gaeta, Italy, to a new 150,000-square-foot store in Bethesda, Md., or a newly opened state-of-the-art 350,000-square-foot distribution center in Suffolk, Va.”
Managing NEXCOM’s variety of products and services can be a challenge. “We have assortments customized for anything from a 7-11 type of convenience store market with a gas station, to a Target-like store or mall-type retail centers,” he notes.
Bianchi credits several factors for making NEXCOM a success. “Almost 35 percent of our employees have some connection to the military; they either have served or have a family member who has served,” he says. “That helps us relate to the customer, so when we have our customer service evaluations, we always score very high in customer service areas.”
The strong financial position of the company enables it to forge strong alliances with vendors. “If you look at all the exchanges [Navy, Army, Air Force, Marines], we are talking about $13 to $15 billion dollars a year in revenue, so we are able to develop relationships with our vendors and secure favorable pricing,” Bianchi says.
“The other thing that helps us is that we are very efficient and we have very good cost control,” he notes. “We are very keen on watching that because, at the end of the day, the profit we generate goes back to our Sailors and their families in the form of a dividend that benefits MWR.”
Bianchi oversees the company’s six business lines: NEXs, which are the retail stores; 150 stores onboard Navy ships; Navy Lodges, which are hotel-like operations for sailors and families transitioning between duty stations; the Uniform Program Management Office; the Navy Clothing Textile & Research Facility; and the Personal Telecommunication Program Office, which oversees operations like mobile phone centers.
“We offer everything from basic products to luxury items, with iconic brands such as Ralph Lauren, Coach and Rolex,” Bianchi says. “We also have exclusive deals with some brands, like a new one we just established with Bobbi Brown cosmetics. In some of our stores you come in and, while you have your car tires changed, you can drop off your dry cleaning, get a haircut and a bite to eat at Subway or Taco Bell. Then you can visit many of our store-within-a-store concepts like Apple, where you can buy an i-Pod or an i-Pad, or Sony, where you can shop for a their newest 3-D television set, or Bose, where you can experience a surround-sound environment.”
NEXCOM also is ready to serve Navy personnel, families and first responders. “When there is a natural disaster, such as a hurricane, wild fire, or tsunami people need all sorts of things [and] we provide diapers for children, water and food,” he explains. “For example, during wild fires in San Diego, the firefighters stayed at our Navy Lodge. We are more than retail; we are integrated into all these other parts of the Navy operation.”
As extensive as its services and offerings are, there are still growth areas for NEXCOM. “We have about 15,000 items on our e-commerce site and we’re looking to expand our selection,” Bianchi says.