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

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 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 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 –

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?