Base of Opportunity
Oct 1, 2008 12:00 PM, By Jennifer Popovec
Yet, many retailers are reluctant to open stores in military markets, unsure of their potential and concerned about deployments. “Military markets are a little bit like tourist markets — they don't easily show household income and density — and retailers have a hard time getting their arms around the market,” says Marshall. “You really have to dig into the market to understand the true impact of the military.”
CBL & Associates' Ward noted its success at luring some higher-end retailers such as Pac Sun and Aéropostale into the Fayetteville market. However, Ward acknowledged, it wasn't easy. “It's an education process. Some of them [retailers] feel that their customer isn't there — that the incomes aren't there — but once you explain that most of the income is disposable, it's a convincing argument,” he says.
For more than a quarter of a century, soldiers stationed at Fort Bragg in Fayetteville, N.C., have been able to buy home furnishings from Freedom Stores Inc. The Fayetteville, N.C.-based furniture and electronics retailer focuses on military markets, opening stores only near army bases and naval stations. There are 10 Freedom Stores in military markets such as Hinesville, Ga., and Newport News, Va.
A former soldier stationed at Fort Bragg, Bill Porter, opened Max Muscle last month to tap into the large market of military personnel stationed in Fayetteville. “There are a lot of benefits to being in military markets because most of them are underserved and military personnel have a high disposable income,” says Leonard Melley Jr., president and CEO of Freedom Stores.
“The downside is that sales can really take a hit during lengthy and large deployments,” he says.
Dark side of deployment
While many industry experts emphasize the upside of military markets, they do have a downside: the drain on the local economy and retail sales when soldiers are deployed for tours that can exceed a year.
Military markets with more diverse economies, such as the Hampton Roads region in Virginia, can better weather deployments than those that are dominated by the military like Fayetteville and Columbus, notes Glickman.
CBL hedges by forecasting sales budgets based on Fort Bragg's deployment schedules. Ward cites a sharp decline in sales when troops are off base for 15 months or more. The windfall, he says, is when they return — there's a huge surge of income back into the market.
“It's like Christmas when they come back from deployment,” says Ward. “If you can demonstrate your commitment and support to the military and the military community, it pays off tremendously.”
