REI embraces showrooming and rewards customers for shopping with them

2 minute read

18M

co-op members

$200M+

paid out in loyalty benefits

6%

overall YoY revenue growth in 2018

If there’s one thing the omnichannel trend has taught us, it’s that people’s shopping habits are complicated. Whether it’s a relic of the brick-and-mortar age, or just human nature, it’s still very important to shoppers to hold an item in their hands before buying - even if they ultimately make the final purchase online. 

Some merchants consider showrooming - the practice of browsing in-store, then buying online - a threat to their bottom line. In a consumer survey conducted by Riskified this year, 31% of US shoppers reported buying an item via their phone while physically inside a store that sold this exact item - often on a competitor’s site.

REI realized showrooming could actually be leveraged into an opportunity: customers shopping on their phones after browsing in person is great, as long as they’re shopping at REI.com. That’s where REI’s best-in-class rewards program comes into play: once you factor in the perks, it makes economic sense for shoppers to stay loyal.

We see physical and digital working together. People want to engage and touch products… Getting you into the right pair of shoes, that don’t cause a blister, is an art.

ERIC ARTZ, REI president and CEO, 2019

REI is a great place to hang out

The best way to fight showrooming is to keep these customers in your store and give them value. Don’t overthink it: if they like your brand, they’re more likely to buy with you – 51% of shoppers say they're likely to pay more for an item if they get a personalized in-store experience. That goes for both checking out in-store, or shopping online a few days later. 

REI gets this. If you’re an outdoors enthusiast, you can easily spend an entire afternoon in an REI. And if you’re not an outdoors enthusiast, an afternoon in REI may well change that. In-store climbing walls and yoga studios are just the start. Most stores have a regular rotation of events and product demos - like classes on navigating with a compass and map, private bike-riding lessons, and workshops on how to choose trail-running gear

But you don’t need to attend a formal class to get expert advice. One of the pillars of the REI brand is a fleet of enthusiastic and knowledgeable employees - most of whom have years of hands-on experience in their outdoors niche. While REI’s blog and other online resources (like the hiking project) are very informative, there’s nothing like a flesh and blood sales rep to help you choose the fishing rod or kayak that’s right for you. 

Source: REI’s facebook

Why REI customers are loyal

At its founding in 1938, REI was a true co-op: members chipped in a one-time fee of a dollar for the right to borrow expensive recreational equipment. Though today they’re a private company with an annual revenue of nearly $3B, much of the co-op culture lives on through their loyalty program. 

Twenty dollars gets you a lifetime membership, which is worth it for the dividend alone: members receive an end of year rebate worth around 10% of their annual purchases. On top of that, membership grants you first access to garage sales - where lightly used returned goods are sold at a steep markdown - discounts on their events, plus a slew of additional coupons. REI’s unrivaled return policy gives shoppers one more reason to stay loyal: you can return goods within one year for a full refund, and if you’re a member you don’t even need your receipt.

Add up the loyalty program, the in-store atmosphere, popular publicity from moves like closing on Black Friday to give employees a day off, and donating 70% of profits to the outdoors community, and you get something pretty amazing: REI shoppers aren’t just loyal for the discounts - they legitimately want to be associated with the brand. 

Source: REI’s website

REI today: 

1 million co-op members joined in 2018, for a total of 18 million

6% overall YoY revenue growth in 2018

Riskified’s fraud insights

Promo abuse

Coupons and giveaways are important tools to foster customer loyalty and differentiate from competitors - but they’re also vulnerable to abuse. Bad actors can game your marketing programs by creating fake customer accounts and collecting multiple rewards. But preventing abuse without bothering good customers is a tricky business. A web beacon, which can detect multiple accounts being opened with the same IP address, from the same device, is a good start. But even then, blocking these accounts is too harsh - what if, for instance, this is a family computer? To learn more about how Riskified can help protect your marketing budget without creating friction for good customers, click here.