Rei Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry
REI Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry 1 - Rei Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry introduction. What does “sustainability” mean at REI? When we think of sustainability, we tend to gravitate towards the environment and our preservation of it. Even though that is/was one of REI’s main priorities, sustainability at REI has a couple of meanings. First and foremost it can be summed up by REI’s definition of Stewardship: •Encourage the active conservation of nature. •Inspire the responsible use and enjoyment of the outdoors.
•Enhance the natural world and our communities through responsible business practices. •Foster opportunities to increase participation in human-powered outdoor recreation, with a focus on youth. •Maintain REI as an employer of choice, where employees are highly engaged in the vision of the company and are representative of our communities. In addition to these values or stewardship, REI also sought to be financially, socially and ecologically profitable…all at the same time.
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With a commitment to becoming “climate neutral” by 2020, REI had to focus their efforts on reducing wastes and pollution from their operations and become operationally more efficient. Also, they wanted to begin utilizing primarily renewable energy sources. Therefore, in a sentence, REI’s mission was to ensure that people and places continued to exist in a healthy state, now and in future generations. 2. How does REI use its sustainability strategy to drive innovation?
To win competitive advantage in its markets? With REI’s core competencies in mind, this desire to be a sustainable company led to various areas of growth and innovation. By launching their “ecoSensitive” label for their own branded apparel, they began to shed light on products that were made from significantly recycled, renewable or organic materials. Given that the reputation of these types of products were typically associated with higher costs, REI was then tasked with the job of changing this reputation.
This gave REI the incentive to take an active role in the Eco Working Group (EWG), developers of the first environmental assessment tool for outdoor gear and apparel. With REI, EWG developed a means by which the environmental impact could be measured, throughout the product’s life cycle and at all stages of production. Ultimately, this helped designers make better choices, inspire creativity and innovation in the supply chain, and enable the brands collectively reduce waste and the toxicity of products and production.
This innovation and design did not necessarily give REI a specific competitive advantage, as much as it benefitted their industry as whole. With that said, it did position them as the thought leaders in the industry and showed their employees the commitment that they had for their Governance Principles (to serve our members by selling great gear and promoting an outdoor lifestyle; to help people have fun, appreciate nature, and become stewards for the environment). 3. What are the implications of REI’s sustainability strategy for marketing? For operations?
The implications of REI’s sustainability strategy for marketing and operations could manifest itself in numerous ways, all positive…but it’s not easy. On the marketing side, they are able to promote their products as “earth friendly”. They could also promote their good standing with the multiple environmental groups that they worked with. By also promoting their ranking in the Forbes list of best companies to work for, they could proudly say, “we practice what we preach…when our employees spend time in the outdoors, they are connecting with the core of this company.
” For operations, the implications of REI’s sustainability strategy would be more invasive and time-consuming. When they first visited their plant in China and started asking their vendors to break out the cost of packaging, they must have thought that he was crazy. But by investing the time and energy to invent a new box for their bicycles, with the ultimate goal of creating a closed loop system that extended the life of materials and avoided toxic materials or processes, ultimately saved REI money (approximately $1.
25 million) by reducing packaging materials by 68%, while at the same time, influencing their counterparts in similar industries and solidifying their position as the industry leaders. 4. What should REI do next to sustain and amplify its sustainability strategy? They say that getting to the top is usually easier than staying there…that the sequel is never as good as the original. With that in mind, I don’t expect REI to continue to reinvent the wheel but simply tweak it. Now that they have the blueprint of success, they are much more prepared to roll out this program for all of their product lines.
Knowing that REI’s mountain bikes are only 10% of their total bicycle sales, they still have a lot of work to do in order to bring that up to 50% and ultimately 100%. While they can’t control all of their manufacturers/suppliers, they can have a huge influence on them, which could ultimately have a huge impact on the environment. From there, as previously mentioned, they then simply look at all of their product lines. At the same time, they continue to educate other companies as to their processes and procedures so that this program can be implemented in other industries as well.