March 4, 2009, 12:00 AM

Chain that serves U.S. military personnel cultivates its feminine side

The Army & Air Force Exchange Service is adding more products that appeal to women, who currently make up only about a third of the customers of the multichannel retailer that sells through stores on military bases as well as catalogs and the web.

Web sales fell 10.6% last year for the Army & Air Force Exchange Service, largely due to a supplier issue, the multichannel retailer says. AAFES, which sells through stores on military bases as well as through catalogs and the web, is aiming to make its site more appealing to women, who currently account for only about a third of its customers.

AAFES, No. 66 in the Internet Retailer Top 500 Guide, reported web sales of $197.1 million in 2008, down from $220.4 million in 2007, when the web accounted for 2.3% of the retailer’s $9.7 billion in sales. Total sales for the 2008 fiscal year, which ended Jan. 31, are not yet available.

A problem with a supplier had a big impact on web sales last year, says Chris Burton, catalog and e-commerce manager. “We had an issue with one key supplier that impacted us for four to six months and we were not able to make up all of the lost sales,” Burton says. “We were down high teens through the middle of 2008 and were able to make a strong turnaround with better supply of merchandise, a new search engine and many promotions that drove traffic to our site.” He says sales are up 18% so far in 2009 over last year.

The retailer is focusing this year on making its site more attractive to women, who currently account for only 30-35% of its customers, Burton says. He says AAFES hopes to appeal more effectively to women with offers of such merchandise as purses, shoes, accessories and perfume.

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