REI Maps Out its Digital Journey

Outdoor gear and apparel retailer REI was one of the early pioneers in the e-commerce industry, launching its first website in 1996. That online experience has changed quite a bit in the nearly 20 years since its launch, but one thing remains the same: the company continues to try to provide its members (it's a co-op) the best shopping experience possible. In a keynote presentation yesterday at the Shop.org Annual Summit in Seattle, REI's President and CEO Jerry Stritzke, as well as its Senior Vice President of Digital Retail Brad Brown, discussed how REI is evolving its digital properties into the 21st century flagship store.

REI generated over $2 billion in sales last year, with digital (online and mobile) accounting for 23 percent of those total sales. Digital is the fastest-growing business segment for REI. Recognizing the growth opportunity at hand, REI has identified four factors it believes are integral to its digital success, Stritzke said: being a multichannel company; creating the flagship of the 21st century; differentiating itself from its competitors; and a belief in mobile.

REI's flagship brick-and-mortar stores in Seattle (its hometown), Denver and SoHo are places to capature the imagination of outdoor enthusiasts, Stritzke said. The company is working to bring the creativity and technology found in those physical stores into its digital properties.

Multichannel for REI is more than just being able to sell to customers in more than one channel; it's about applying what it learns from each channel to offer the same experience in whichever way the consumer chooses to engage with the company. Consider that 75 percent of REI's in-store purchases are preceded by a visit to one of the company's digital properties in the previous seven days. We sell pretty complex products, Brown said, noting that people like to research them online before going to their local store to make a purchase.

Differentiation is the name of the game in today's competitive retail marketplace, Stritzke noted. REI differentiates itself through content and context, using its expertise as outdoor enthusiasts themselves to be able to give customers the type of service they want and need. For example, the retailer has established the REI Outdoor School, a program that offers professional instruction in outdoor activities (e.g., hiking, climbing, snowsports) to outdoor novices as well as seasoned adventurers. The program has helped bring more than 300,000 people nationwide outdoors, Stritzke said.

Emphasis on Mobile
REI views mobile as another engagement opportunity with its customers. It's about identifying those "mobile moments" and finding solutions for them, said Brad Brown, whether they take place in one of its stores, out on a ski slope, on a shopper's couch, etc. REI has a a mobile website, which is currently being replatformed (along with the retailer's desktop site); an iPad app, which it launched this year; iPhone and Android apps; and a snow report app that gives users the latest skiing conditions at their favorite resorts.

Mobile works in synergy with REI's other channels, Brown noted. For example, REI.com is the No. 1 visited website in the retailer's stores (it offers free Wi-Fi in all its stores). In addition, REI's site designers have gone into the company's stores to solicit customer feedback on how the REI mobile experience can be improved.

Our best customers engage with us in both channels, Stritzke added. That's the reason why REI analyzes the digital presence in a market before deciding to put a brick-and-mortar store there.

Personalization Not a Top Priority
While certainly not dismissing the value of personalization, REI sees it as less of a priority than some of its other initiatives, namely building a community of brand loyalists. The nature of its products and how they're used makes REI a brand that fosters a passionate customer base. Engaging and better serving that community with expert advice and service is what the company strives for.

REI does use segmentation within its email program to send targeted messages to customers as well as other personalization techniques on its website such as product recommendations, but Brown conceded that the company is "years" away from totally knowing its customers. The range and complexity of our equipment sometimes makes personalization difficult for us, he added.