Recreational Equipment Incorporated (REI) is a national retail cooperative famous for its outdoor apparel and equipment, A

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Recreational Equipment Incorporated (REI) is a national retail cooperative famous for its outdoor apparel and equipment, A cooperative consists of individuals who have joined together to secure the benefits of a larger organization. In the case of REI, the company is organized as a consumer cooperative. Members of the cooperative receive a portion of the organization’s profits annually based on a percentage of their eligible purchases, receive discounts on products and classes, and can vote for board members. REI has 5.1 million active members and generated revenues of $2.2 billion.

Customers are only the beginning of REI’s stakeholder orientation. The company also values its communities and the issues that are important to them through philanthropic activities and advocacy efforts. It shows its concern for the environment by promoting and practicing environmentally-friendly behaviors. As a result, REI maintains a strong focus on all stakeholders, an emphasis that has encouraged the organization to offer superior goods and services in areas such as mountain climbing, camping, and other outdoor activities.

REI’s values include authenticity, quality, service, respect, integrity, decency, and balance, These values are at the heart of the company’s work environment and are reflected in each of their activities. The ethical culture of REI is not just about employees and customers but includes all stakeholders. Ethical conduct is at the core of its culture.

The concept of REI originated during the 1930s when Lloyd Anderson, a member of the Pacific Northwest Mountaineers, was looking for a high-quality ice axe at a reasonable cost. After searching without success, Anderson found what he needed in an Austrian Alpine Gear catalog for $3.50. His find excited the climbing community around Seattle, prompting Anderson to envision a local business that would carry items for mountain climbers at reasonable prices. In 1938 Lloyd Anderson and his wife Mary, along with 21 fellow climbers, founded an outdoor gear consumer cooperative. At first the cooperative was focused specifically on mountain climbing. Its first full-time employee and eventual CEO was John Whit-taker, the first American to successfully climb Mt. Everest. Yet over the years REI grew to include gear tor camping and hiking, bicycling, fitness, paddling, and more, Today it is the largest consumer cooperative in the United States.

REI Maintains Customer Satisfaction

REI operates more than 143 retail stores in 35 states. To help customers choose the right product, REI retail locations contain features like bike trails and rock climbing walls that allow customers to test the gear, as well as Internet kiosks to educate consumers about the brands and products it sells. In addition, to make sure that customers purchase products that meet their needs, REI offers a 100% Satisfaction Guarantee. In line with its ethical view of customer satisfaction. REI’s return policy used to allow customers to return merchandise at any time and receive a refund. However, some of their customers engaged in misbehavior. They took advantage of REI’s policy by either purposefully damaging products and returning them to the store or buying REI merchandise at yard sales and returning them for cash. This misconduct cut into company profits, and REI responded by maintaining its 100% Satisfaction Guarantee but instituting a year-long window for items to be returned.

In changing its policy, REI attempted to maintain fairness to all stakeholders. Its one-year return period gives customers a significant amount of time to decide if they are satisfied. It also helps curb consumer misconduct that could harm other stakeholders. REI learned that although it wants to be ethical to its customers, there are times when it must adopt controls to reduce the potential for unethical conduct.

REI’s role in the competitive environment is largely based on quality products. Its competitors, L.L. Bean and Sports Authority, also offer quality products but at lower prices. REI has received some criticism over its higher-priced products, but many of its customers are willing to pay the higher prices because their values align with the company’s. REI cooperative members tend to share similar values as well. They receive the added benefit of profiting from their purchases—the more they buy at the store, the more return they will receive in the annual dividends REI provides to members.

REI Uses Marketing to Support Outdoor Initiatives

REI has become an expert in monitoring its environment to ensure that it continues to meet customer needs. For instance, the company uses social media outlets to gauge and address the sociocultural environment. In response to the change in people’s desires to reduce their carbon footprint and maintain an active lifestyle, REI produces videos on YouTube and posts on Facebook and Twitter to educate customers about kayaking, road biking, and family camping.

Additionally, REI demonstrates social responsibility by supporting local programs to further conservation and outdoor recreation. A primary focus for REI is youth. REI seeks to inspire and educate the younger generation about the outdoors. The company’s Promoting Environmental Awareness in Kids (PEAK) program is one step toward youth engagement. This program teaches kids about outdoor ethics—such as cleaning up waste materials and respecting wildlife—while having fun outdoors. PEAK has two goals: to introduce youth to the wonders of the outdoors and to practice responsible “No Trace” principles. REI also encourages employees to volunteer in improving and protecting the outdoors. In all of these efforts, REI’s philanthropic initiatives contribute to its brand and customer loyalty. Consumers expect businesses to give back to the community, and REI goes beyond what is required.

REI Cares for the Environment

Changing sociocultural trends have made the environment an important stakeholder for businesses. Stakeholders have begun to express an interest in how businesses affect the environment. For this reason, REI develops an annual environmental stewardship report. This not only generates goodwill among stakeholders but also fits well with REI’s strategic emphasis on outdoor activities and product offerings. REI has benchmarked areas of sustainability concern in its stewardship report into four sections: (1) curate sustainable products, (2) create access, (3) catalyze experiences, and (4) core practices. The organization also considers its product stewardship responsibilities and has acted as a leader in this area.

REI has been reducing the impact of its greenhouse gas emissions through methods such as the purchase of carbon offsets. It uses solar to power 26 REI locations and has taken action to retrofit its buildings to reduce emissions. For instance, by retrofitting its data center REI experienced a 93 percent reduction in cooling costs.

In terms of its paper sourcing, REI wants to ensure that the paper it uses is sourced responsibly. It is impossible for REI to completely eliminate its use of paper, but the company’s paper policy encourages the purchase of paper products sourced from post-consumer waste or virgin fiber harvested from forests certified by the Forest Stewardship Council (FSC). Certification implies that the paper-based products have been responsibly sourced. Although REI saw its paper usage increase in a one year period, 70.8 percent of its total paper footprint consisted of post-consumer recycled paper and third-party certified fiber.

Finally, REI recognizes that environmental stewardship does not stop after a company sells a product, REI makes product stewardship a key tenet or its sustainability goals. It advocates lot a universal standard that can be used to judge a product’s sustainability. To that end, REI partnered with Timberland to create the Eco Index. In 2012 the Eco Index was modified to form the HiGG Index, a tool used to measure the sustainability of apparel and footwear products, REI also supports the bluesign^® system, a system to responsibly manage chemicals in the supply chain, Approximately 25 percent of materials that REI uses is bluesign-certified.

REI also takes its environmental concerns to the political level, Its advocacy efforts center on its desire to protect the environment and promote outdoor recreation, The company has lobbied and continues to lobby for public lands and environmental causes. More specifically, the organization has supported the Outdoor Industry Association. Additionally, REI sometimes partners its employees with nonprofits that support its environmental goals, such as the Outdoor Alliance and People for Bikes.

Because of REI’s customer-based mission, it is able to generate loyalty and enthusiasm among stakeholders. Though some of the company’s marketing activities are sales-related, much of it provides stakeholders with information directly related to their outdoor interests and environmental concerns. The marketing citizenship that the company embraces has proven 10 be a strong force in garnering stakeholder attention, generating profits, and advancing a stakeholder orientation.