Why has a retail system in business since 1895, serving over 30 million eligible shoppers—roughly one in 11 Americans—mostly stayed out of the beauty conversation for 131 years? The short answer is that most brands can’t get past the front gate.
Military exchanges are retail stores on military bases in the US and overseas, including Southwest Asia, Africa, Europe, and the Pacific, and shopping them is a benefit of service. They are open to active-duty members, retirees, veterans, Guard and Reserve members, Department of War civilians, and military families, and if you’re eligible to shop at one, you have access to all of them.
Three organizations run the military exchange system, each tied to a service branch: The Army & Air Force Exchange Service (AAFES), which brands itself as the Exchange and operates The Post Exchange (PX) and The Base Exchange (BX) that serve as department stores on Air Force and Army bases; and the Navy and Marine Corps run their own, the Navy Exchange (NEX) and the Marine Corps Exchange (MCX), respectively.
AAFES is the largest, with more than 5,500 facilities in over 30 countries, though only 118 of those are the PXs and BXs where beauty sits. In fiscal year 2025, The Exchange—the 51st-largest retailer in the US, according to the AAFES—generated $8.6 billion in revenue and $513 million in earnings. Plus, it returned $307 million in dividends to Quality-of-Life programs. NEX is the second largest, with more than 100 stores worldwide. It generated $2.4 billion in revenue in fiscal year 2025, with its net income nearly doubling to $43.9 million. MCX is the smallest of the three, with 15 main exchanges and a reported $657.3 million in revenue for fiscal year 2025.
Across all three, everything sells tax-free, and most items, including beauty products, are often priced roughly 10%-15% below competitors. And according to figures cited in a March press release by K-beauty global distributor Landing International, their shoppers visit four or more times a month.
Their consumers are also no monolith. Benjamin Bernet, co-founder and CEO of bodycare brand Bravo Sierra, expected something out of a movie when he launched his brand in the exchanges in 2019.
“I really thought that the military base would be 70% men, 30% women, all in camouflage, strictly buying necessities,” he told BeautyMatter. Then, he visited MacDill Air Force Base in Florida and quickly learned the consumers were way more diverse than he imagined. He said buyers told him that roughly 70% of the traffic through the stores came from retirees and families living near the base. “It’s a way less homogeneous customer than I thought. You have elderly people, teenagers, men, women,” he said.
Yet, when beauty brands map their channel strategy, conversations mostly point to Sephora, Ulta Beauty, Target, Amazon, Walmart, and TikTok Shop—and usually stop there.
Despite the opportunity, the barriers to entering any exchange system are real, and most of them have nothing to do with whether the products can sell.
The first is access. Regardless of whether you’re a brand founder or a member of the brand’s team, you cannot simply walk into an exchange, which are located on highly secure military bases. “You cannot go on a base if you’re not Department of Defense (DoD) personnel,” Bernet said. “It’s difficult to visit [the retailers], which creates an obstacle to seeing the channel.” Every store visit requires an appointment, a pass, and a clearance process.
The second is who does the buying. Exchange buyers for all three systems are civil servants spending public money in service of the community, not merchants chasing margin. This dynamic can create natural skepticism about anything unproven. “Historically, if you were not in the top 10 or top 15 of brands nationally [recognized] in your category, they were very likely not going to launch you,” said Bernet. “They wanted to provide the service members with what they were familiar with. Discovery wasn’t always the priority.” He made it clear, though, that this particular line of thinking has changed in recent years.
The third is geography. The exchanges' retail footprint follows the troops, not a brand’s existing customers. As such, a brand’s best doors in an exchange are often nowhere near the cities where the rest of its business lives. “My biggest point of sale was Ramstein [Air Base] in Germany,” Berney said, but he added that it was a location he never visited because the travel and authorization process was too complicated.
The fourth is cost, and not the obvious kind. “It is usually more expensive than traditional channels, not because of the margins, but because doing it without a broker is very difficult,” Bernet said.
But that seems to be changing. Access and geography remain the same and are still challenging, but brand interest beyond the most familiar ones is shifting.
Two years ago, Marissa Carpenter, Senior Vice President of Merchandising for the AAFES, was walking through stores in the Pacific region—Japan, Okinawa, South Korea, the Philippines—when the regional vice president told her something that changed how she thought about the retailer’s beauty offerings.
At Camp Humphreys in South Korea, customers were asking sales associates for more K-beauty. They’d buy it off base because they didn’t have access to many of the products they desired in the exchange. Some Korean brands were already on the floor through local buys and concession relationships, but it was nowhere near the scale consumers were asking for.
“Our customers in Korea were part of the trend before it became huge in the US, telling us about it while it was still emerging,” Carpenter said. “It was obvious customers elsewhere were going to want K-beauty, too. This is something we wouldn’t have learned sitting in Dallas [our global headquarters], and it’s an example of the benefit of being a global retailer.”
A retailer with stores in 30 countries can see a trend move before the US market catches it, then act on it centrally. Carpenter says putting a full assortment on the floor “around the same time major US department stores were doing it” is among the things she is proudest of.
But the larger category around it had already been shifting. Five years ago, Carpenter says, five or six large beauty brands, including Shiseido and Estée Lauder, took most of the space, and floor sets changed around three times a year. Now, those brands have smaller “brothers and sisters” that come and go, the assortment changes continuously, and men’s grooming has expanded sharply to include buzzy brands like Dr. Squatch, Native, and Duke Cannon.
“Beauty is a ‘personal want’ category, and it’s growing faster than other ‘wants’ categories such as apparel, footwear, jewelry, and accessories,” she said. “Shoppers are investing more in products they use on their bodies rather than traditional accessories, clothing, and shoes they wear.”
Part of what expedited the shift was competition finally getting past the gate. “Before, you’d have to get in your car and go to Walmart or Ulta [Beauty]. Now, you can get next day delivery [through Amazon],” Bernet said. Access is more limited than that sounds, however. Amazon's vans can't freely deliver to on-base addresses, and overseas orders still route slowly through Army Post Office (APO) and Fleet Post Office (FPO) mail. But the pressure still had an impact. In March 2025, Amazon began offering pickup and returns at more than 90 Exchange stores, through a partnership with The Exchange itself.
Internal changes also had a significant impact, Bernet added. He noticed that younger, more digitally fluent staff were moving onto the beauty teams around 2020 and 2021. Also in 2021, the Exchanges’ e-commerce counterpart ShopMyExchange, once password-gated, opened, allowing anyone to at least browse the assortment. You still need to log in with an authorized military-affiliated account to purchase items.
Bravo Sierra is the clearest proof that the channel can build a business, because it launched there before entering any other retailers.
The brand launched on base in 2019 with a body wipe developed after its founders learned service members were buying baby wipes to get through deployments without showers. It pitched AAFES, NEX, and MCX before any other retailers, and the logic was positional as much as commercial.
“Usually that community always gets the novelty second,” Bernet said. “It's going to hit Sephora or maybe Target as an exclusive, and then it's going to come to them at the PX five years later. We wanted to reverse that and say, ‘You know what, you are getting the exclusive,’” he added.
It worked, and fast. Bravo Sierra doubled its Exchange footprint within six months of launching, and revenue has doubled year-over-year since, reaching an expected $10 to $20 million in 2023. Since 2017, the brand has raised over $38 million, including a Series B funding round of $17 million in 2022 that funded a rollout into 4,500 Walmart doors. Target came first, in 2021, at 550 doors.
The channel has given Bravo Sierra something else of value alongside sales. The brand develops and tests every product with The Battalion, a community of roughly 2,500 special operations members, active-duty service members, and veterans. In other words, its customers and its product testers are the same people.
Bernet puts the full exchange footprint “between 60 and 120 doors,” so it has never been the majority of the business, but Bravo Sierra kept it through its 2024 premium shift that took the brand into Dillard’s, Bloomingdale’s, and Amazon. Bernet adds that in his experience, there’s been no friction with mass buyers as the brand has expanded.
In August, Landing International’s K-Beauty World assortment launched across AAFES, NEX, and MCX, bringing roughly 125 products, including 59 color SKUs, to 98 doors. The nine brands include COSRX, Dr. Melaxin, Sungboon Editor, Numbuzin, Hanskin, Unleashed, Cosnori, Braye, and Odd Type.
The market share and escalating demand back up Landing International’s bet. NielsenIQ figures put K-beauty in nearly 30% of American households in a given year, up from 23% the year prior, and Morgan Stanley analyst Simeon Gutman projects US K-beauty sales approaching $4 billion this year.
“[K-beauty] consumers make up a third of the country, so why wouldn’t you think [Exchange] shoppers make up some of that customer,” Allison Slater Ray, co-founder of Breakthru Beauty and previous Sephora merchant, told BeautyMatter. The demographics line up, with active-duty exchange shoppers averaging 28.6 years old against a K-beauty core of 25 to 34 years old.
Getting there was expensive, though, and Landing International absorbed much of the initial costs. With three retailers to onboard at once on a compressed calendar, the company covered the fixture and early marketing costs rather than waiting for approvals from each brand. “We really want K-beauty to succeed [in The Exchange],” said founder and CEO Sarah Chung Park. “That was probably our first and foremost goal, rather than being the most profitable out of the gate.”
For brands interested in entering the channel, it’s important to know that shelf space still remains a constraint because exchanges stock far more than beauty. “We're [all] a department store, a convenience store, a big-box store,” Carpenter said. And for families stationed overseas, it’s also one of the few places to find familiar American products, so a new serum is competing for room against electronics, uniforms, groceries, and other everyday household needs.
Most new brands aren’t given that much shelf space initially. Landing International currently holds a single bay, which, depending on packaging, holds 10 to 15 SKUs, so what made the cut, Chung Park explained, had to follow a buyer’s logic rather than a brand’s: include a few recognizable brand names, a few trendy items, and nothing requiring a paragraph of explanation as to what it is. Brands used to pitching a full range should expect to pitch just a few products.
That scarcity can also impact where a brand decides to exist on the floor. For Landing International, introducing shoppers to a mix of well-known and new brands led them down the prestige route over mass because prestige often comes with staff who can do the heavy lifting of education.
“When customers visit The Exchange, many times they have access to prestige beauty advisors, and shopping becomes an experience. They are subject-matter experts who help customers understand products, compare brands, and explore trends,” Carpenter said. “That’s not something typically experienced at a big-box retailer.”
The Exchange runs a monthly Beauty Live series on Facebook that brings beauty-brand experts directly to the military community. “The livestream highlights expert tips, demonstrations, and tax-free, military-exclusive offers,” Carpenter said. The Exchange’s closed-market status also opens doors others cannot walk through. For example, when Kylie Cosmetics was exclusive elsewhere, The Exchange still carried it.
That’s more or less how this shelf works. Exchanges can supply access to a brand shoppers already wanted but couldn’t otherwise buy. That’s why Slater Ray expects brands that have already spent on digital awareness will likely do best in this channel.
But Carpenter is clear that a slow start isn’t necessarily the end-all, be-all at The Exchange. “Merchants don't give nos. We give not yets,” Carpenter said. “What didn't sell two years ago could be a bestseller tomorrow.”
The brands in Landing International's assortment found the friction in ordinary places. A spokesperson for Hanskin said the upfront inventory commitment “was more than we initially expected.” A Braye spokesperson described having to hand-apply English labels to every unit without covering barcodes or expiration dates, adding that “individually none of it is hard, but together it affects the timeline.” Meanwhile, a spokesperson from Dr.Melaxin flagged merchandising rules far stricter than conventional retail. Pricing discipline matters, too. Unleashia’s spokesperson said the brand held its US minimum advertised price here “so the tax-free benefit stays a genuine benefit to the shopper rather than something that undercuts our other retail partners.”
Still, the single largest mistake is treating an exchange like any other account. Bernet learned that when he proposed a phased Sephora-like rollout, launching a new product in US exchanges first and then overseas. The buyers pushed back immediately, asking whether a service member in Naples, Italy, was less deserving of the product.
“It cannot be a tactical launch,” he said. “It’s a commitment of not just money, but time and effort.”
But when asked whether he would start there again, Bernet doesn’t hesitate. “Yes, 100%. I wouldn’t have a company right now if we hadn’t started there.”
