Sustainable Innovation at REI. Alex Flake, Carson Kiesewetter, Chris Trigueiro, & Megan Selden

Transcription

1 Sustainable Innovation at REI Alex Flake, Carson Kiesewetter, Chris Trigueiro, & Megan Selden

2

3 Outline Catalyzing Experiences Sharing Economy Strategy Finances Risks/Mitigation Conclusion Q&A

4 Catalyzing Experiences HOW?

5 OUR STRATEGY THESIS: Immerse the younger generation into REI s mission by appealing to their interests in shared economy, technology, & sustainability, in order to catalyze a lifetime of experiences using two recommendations.

6 Sharing Economy How can the new sharing economy inform a strategy that benefits all stakeholders?

7 Basics of Sharing Economy Non-sharers, re-sharers, neo-sharers Reuse and reduce Buying borrowing Millennial generation

8 Value

9 Sharing Economy for REI Established company & brand Not primary sustaining factor of business operations Value alignment

10 Why Millennials?

11 Strategic Focus Within Sharing Economy 1) Recirculation of Goods 2) Increased Utilization of Durable Assets 3) Exchange of Services 4) Sharing of Productive Assets

12 Our Recommendations 1 REIntegrate 2 Mobile App Enhancements

13 REIntegrate Members & Customers *Certify products *Receive new revenue REI Members & Customers *Bring in unused REI products *Receive benefits *Utilize unused products at discount while reducing waste Donations: Everyone: 10% off items priced $50 or less Members: Receive additions to annual dividends each time donations are approved for REIntegrate program

14 REIntegrate Value REI Members Environment Member increase Dividend increase Less waste Profit from resale Community involvement Gets more people outdoors One-stop shop for other products New method of customer satisfaction Recycling

15 Sustainability Textile waste creates pollution and wastes precious resources 4 out of 7 people are more likely to shop at a business if they know it is hosting a textile recycling bin The average shirt wastes 700 gallons of water during manufacturing Just 1 pound of textiles emits more than 7 lbs of co2 If all 300 million Americans recycled just 1 more shirt, we would recover 210 billion gallons of water and keep 1 million lbs of co2 out of our atmosphere

16 REIntegrate

17 New App Features Ride sharing Gear sharing Routed to REI s current product line Employee involvement Best green practices forum

18 App Enhancement Value REI Members Environment In control of platform Sharing Utilization of durable assets Product recommendations Community Less fuel, carbon emissions, & paper waste Encouraging mission & values Convenience Promote preservation & outdoor activities

19 Download Incentives Streamlined convenience Reduced barriers to entry Local expert knowledge Community feel

20 Easy Implementation

21 Finances

22 Financial Benefits Profit from resale on REIntegrate products Minimal up-front investment Loyal lifetime customers

23 REIntegrate Example Coat: REI Jove Jacket-$ Brought into the store and selected for REIntegration program Resold for: $60.65 (must end in $._5) Going along with the dividends requirement Price determined based on the following: Quality/Condition: almost new Years used/years purchased: 3 years ago How much it would be on Clearance: $159.93

24 Lifetime Customer Value Formula: ($ Spent per Trip) x (# Of Trips per Year) x (Years with Company)

25 Risks & Mitigation

26 Risks & Mitigation Lack of donations Suggested incentives Reaching the right customer Hurt REI s normal retail sales Immaterial Still connecting people Getting them outdoors Value not seen Multiple dimensions of value we provided Communicated properly Success of app depends on downloads Increase awareness Increase revenues Small upfront cost

27 What I Lend Will Get Lost or Stolen Trust 30% Trust 23% I Might Not Trust Others in the Network Personal Barriers to Sharing: Trust 14% My Privacy Might Be Compromised Other 9% The Goods/Services Will Be Poor Quality Quality 12% Value 12% Not Worth The Effort

28 Conclusion How does this strategy disrupt the way REI delivers on its mission?

29 OUR STRATEGY THESIS: Immerse the younger generation into REI s mission by appealing to their interests in shared economy, technology, & sustainability, in order to catalyze a lifetime of experiences using two recommendations.

30 Q & A?

31 Q&A Resources Marketing Strategy Value of Lifetime Market Gains Closed Loop Systems

32 Marketing Strategy Social Media Employee directed Organic word of mouth Promotional events REInvigorate

33 Value of Lifetime Market Gains Formula: (Value of One Lifetime Customer) x (% Of Market Captured x # Of Millennials in Market) *Market = the amount of Millennials in the Northwest region (WA, OR, and CA) Washington population: 7,062,000 x 27.2% = 1,920,864 Oregon population: 3,970,000 x 26.3% = 1,044,110 + California population: 38,800,000 x 29% = 11,252,000 14,216,974

34 Closed Loop Systems