Recreational Equipment
Inc.
REI case Study
By: David Roy
ELC310 E-Marketing
Overview:
• A cooperative that has been outfitting
outdoor adventures since 1938
• Started by Lloyd and Marie Anderson
• First purchases were for high quality ice
axes and climbing equipment from
Europe
• REI has grown into a renown supplier of
specialty outdoor gear and clothing
• 78 Retail stores in 26 states
• REI.com and REI-OUTLET.com
• Nations largest consumer cooperative w/
2.1 million members
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Lifetime membership
One-time $15 fee to join
Not solely member based
Member benefits include annual member
refund on %10 spent.
• Additional discount throughout the year.
• 2004 refunds totaling $43 million
Yearly Donations
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2005 donated back to communities
Grants
Outreach programs
All REI employees donate 1 weekend a
month to outreach programs
Products
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Clothing
Footwear
Snow sports
Camping & hiking
Rock climbing
Ice climbing
Car Racks
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Cycling
Mountain biking
Kayaking & canoeing
Luggage & Travel
Watches & GPS
Sunglass
Books & Maps
REI Adventures
• Started in 1987
• Domestic and International small group
tours
• Places for nature lovers and outdoor
enthusiasts
Competitors
• L.L. Bean
• Patagonia
• Sports Authority
E-Marketing Goal and Strategy
• Primary motive was not to attack the ecommerce market
• Provide for better service to the current
consumers
• Natural evolution to direct-to-customer
catalog sales
• “It's about understanding the customer
and translating that understanding into
strategies and tactics that will take care
of his needs and expectations” -Dennis
Madsen (REI, CEO)
E-Business platform
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IBM’s websphere
RS/600 Oracle database
AS/400 based order-processing system
Allows for in-store pickup
– 100% payback in less than 6 months
– Increased in-store sales by $8 million
Multi-channeling
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Bricks and clicks e-commerce strategy
Internet shopping provides convenience
Alternative to retail stores
For customers not within range of a retail
store
• Global opportunities
Foreign markets (languages)
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Japanese
Dutch
Spanish
French
German
English
Web site design
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www.REI.com
Products are well organized
Expert product advice available
Gift registry
Link to REI outlet and to REI adventures
• Easy to use
• Does not have links to suppliers
• %50 of online purchases are made by
members
Member spending habits
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POS system (in-store)
Web site
Catalog order management system
Provide each members spending habits
and product preferences along with the
geographic and demographic data
Primary Stackholders
• REI members
– Part owner of company
– Opinions matter
• Company employees
– Relay the opinions of members
Value Bubble
• Attracting
– Loyal member base
– Greater product availability
– In-store pickup
– Gift registry
– www.REI-outlet.com
• Engaging
– Membership is the primary mean of
engagement
– Product comparison and research available
on web site
– Allows for comments on products
• Retaining
– Member dividend returns
– %10 cash back on yearly expenditures
– High quality good
– %100 satisfaction guarantee
• Relating
– In-store kiosks
– Store information on web site
Each store attracts the consumers to check
out the web site and each online shopper is
directed to check one of the retail locations
Conclusion
• Decision to join the world of e-commerce
was highly beneficial
• Member tracking
• Increased retail store activity
• Better customer service
• In-store pickup
• Questions?
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