Recreational Equipment Inc. REI case Study By: David Roy ELC310 E-Marketing.

Recreational Equipment Inc.

REI case StudyBy: 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

• 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

• 2005 donated back to communities

• Grants

• Outreach programs

• All REI employees donate 1 weekend a month to outreach programs

Products

• Clothing• Footwear• Snow sports• Camping & hiking• Rock climbing• Ice climbing• Car Racks

• 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 e-commerce 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

• 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

• 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)

• Japanese

• Dutch

• Spanish

• French

• German

• English

Web site design

• 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

• 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?