Jun 21, 2012

Case Study — REI

Nation’s top outdoor retailer is a pipeline for its own and the industry’s innovations

Kent, Wash. – When people talk about the innovations flowing from the Pacific Northwest, many focus in on aerospace and software. But as REI exemplifies, the outdoor industry is just as dynamic and shares many of the same attributes: a young, well-educated workforce, the constant melding of new components and ideas into new products, consumer-focused design, and sophisticated supply chain and distribution channels, to name just a few.

The retailer has a longstanding mission to “inspire, educate and outfit people for a lifetime of outdoor adventure and stewardship.” In the process it has created thousands of skilled jobs, and it sustains an ecosystem of equally innovative suppliers in the Northwest and across the country.  

Just like high tech, the industry is infused with knowledgeable workers. There are apparel designers figuring out new ways to wick sweat through advanced fabrics, sustainability experts focusing on minimizing waste and environmental footprints, tent architects inventing ever-lighter designs, and logistics experts optimizing inventory distribution. REI professionals also have to deliver a top-tier retail experiences both in stores and online. What’s different is that all this work is fueled by a passion for human-powered outdoor recreation.

And while REI develops its own line of high-quality gear and apparel for camping, climbing, cycling, fitness, hiking, paddling, snow sports and travel, the lion’s share of its inventory comes from other brands, large and small. Nationwide, REI relies on innovations from more than 1300 vendors, almost 500 of which are headquartered in the Northwest. This ecosystem helps the company deliver more than 25,000 product SKUs to its 120+ retail stores and its online stores, REI.com and REI-OUTLET.com. The company is even expanding into new territories as enthusiasm for outdoor adventure grows, opening its first New York City store in SoHo last year.

The parallels to traditional high tech bleed over into R&D too. It it can take years before a new outdoor design hits the market. REI’s work culture promotes developing high-performance products at reasonable consumer prices. So even seemingly mundane design elements like the placement of zippers, pockets or hoods are repeatedly analyzed, tested and re-designed until they’re just right. 

This focus on performance and expertise extends to REI’s retail experience. The company seeks out retail employees with outdoor adventure know-how who are passionate about engaging the outdoors so that they can provide shoppers with well-grounded advice.

Beyond its stores, expert REI instructors staff its REI Outdoor School, offering beginning- to advanced-level classes in kayaking, rock climbing, mountain biking, navigation, snowshoeing, road cycling, backpacking and more. Thousands of people attend these outdoor activity classes annually. REI also runs a full-service adventure travel business – REI Adventures – which offers unique high-adventure excursions to all seven continents. The company offers more than 150 trips worldwide, including weekend getaways, family adventures and volunteer expeditions.

Attracting the best and brightest requires careful attention to the work environment as well as to the company’s impact on the world. REI’s business practices include extensive recycling efforts, sustainable sourcing of materials and requiring workplace codes of conduct and fair labor practices from its suppliers. REI’s emphasis on workplace values is a big reason why it has been chosen as one of FORTUNE magazine’s “Best Companies to Work For” every year since the magazine began compiling its list in 1998.

Employees say REI’s focus on environmental stewardship is another reason they love working for the company. REI stores mobilize tens of thousands of volunteers to build trails, clean up beaches, restore local habitats and more. Last year, the company spearheaded more than 540 REI-sponsored conservation projects, including 35,990 volunteers and 137,089 hours of “sweat equity” on trails, parks and waterways. REI also invests a portion of its profits each year in organizations with similar goals. In 2011, REI granted more than $4.4 million to more than 330 local and national nonprofits that share REI’s commitment to engage in and care for the great outdoors. The result was an additional 3.4 million volunteer hours to protect and maintain natural spaces and recreational areas. The company’s non-profit organization, The REI Foundation, works to ensure that tomorrow’s outdoor enthusiasts and conservation stewards reflect the diversity of America.  

This commitment to both innovation and stewardship helps chart REI’s course. And there’s one more parallel to high tech that bodes not just for REI, but for the outdoor industry as a whole. U.S. tech innovators proudly point to being global leaders in their fields. Arguably, the outdoor industry can say that with even more conviction. Non-U.S. companies are hard to find at the industry’s enormous biannual trade show, Outdoor Retailer. This is an industry in which American entrepreneurship and innovation clearly outpace the competition.

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