How REI’s Stop-Shopping Campaign Brings in More Shoppers
A campaign from Recreational Equipment Inc. urging people to stop shopping and start hiking appears to have led to ... well, a lot more shopping. No word yet on an uptick in hiking.
The outdoor gear retailer on Tuesday reported $2.4 billion in sales last year, a 9.3 percent increase over 2014. Revenue at established stores ticked up 7 percent and digital sales surged 23 percent. In terms of volume of commerce, REI is fast closing in on Urban Outfitters Inc. and Tiffany & Co.
REI also added almost 406,000 members to its co-op ranks, a 7.3 percent increase that brings its total just north of 6 million. These are the folks whom REI targeted with a plea to leave the mall and get outside just ahead of the all-important holiday shopping season. It was a hearty call to action and an easy hashtag: #optoutside. REI promised to keep its stores shuttered during the Black Friday retail frenzy, paying its employees to commute to nature and urging its would-be customers to do the same. The retailer closed 143 stores and sent 12,000 workers up breakneck ridges—or at least to hangover brunches.
Now we have evidence that it was a marketing masterstroke, in part because REI probably never got much out of Black Friday anyway. Those in the market for ice axes or grizzly bear mace probably aren’t the same kind of retail animals who would maul one another for a $99 television. Thus REI’s marketing team not only tapped into its customers’ interests but also what a lot of them are decidedly not into. Love and hate: Both sell well, particularly on social media.
It’s never been easier to do an end run around Black Friday for a multibrand retailer such as REI. Customers who know what they want can find a deal any day of the year, and they can easily take their breathable, waterproof dollars to virtually any of the big brands in REI’s ecosystem. They can also find plenty of smaller, scrappier—some would say cooler—competitors in the crowd of e-commerce startups.
But in this increasingly crowded marketplace, REI is a trusted source. It’s not a lifestyle brand so much as an editor or even a personal shopper. It literally is a club. REI paid co-op members $31 apiece, on average, in dividends last year—another powerful incentive to buy in-house.
Skiers, campers, and those who are into today’s version of rollerblading also trust REI to book their vacations via its Adventures unit and do away with brands entirely. Part of the retailer's revenue boost last year came from a new line of its own private-label gear. Now we see the loyalists will even let REI tell them when and how to shop. That, more than anything else, might just be the future of retail.
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