Photo: REI
Will REI’s membership soar with its new lifetime program?
For the first time in 84 years, REI has updated its lifetime membership program with five new benefits and a higher price ($30 one-time fee versus $20 previously). The retailer is launching it with a goal to more than double membership to 50 million by 2030, up from 20 million currently.
The co-op is introducing the new benefits in addition to its traditional perks that include 10 percent off almost everything in the store automatically (paid back in an annual dividend), members-only coupons and discounts on rentals, classes, events and adventures. Existing members are graduated into the program.
The five new additions are:
- Free shipping: Free U.S. standard shipping on all orders, no minimum purchase required. (Exceptions for international shipping and oversized items.)
- Member Collection: REI will launch a broader, curated set of members-only offerings each month such as brand collaborations, limited editions, early access and special offers.
- REI Cooperative Action Fund donation: With each new membership purchased, REI will donate $5 to the REI Cooperative Action Fund to support organizations committed to justice, equity and belonging in the outdoors.
- Members-only used gear: Used gear offerings, now called Re/Supply, are now just for members.
- Shop service discount: In-store bike, ski and snowboard shop services discounts are doubled to 20 percent off for members.
Interest in outdoor activities from camping to hiking and biking surged as the pandemic shut down indoor activities. A report last year, “New Outdoor Participant (Covid And Beyond)” from the Outdoor Industry Association (OIA) found new participants more likely to be female, younger, living in an urban area and slightly more ethnically diverse than existing participants.
Many aspects of REI’s new program — including limited-edition collaborations, secondhand sales and purpose-led donations — appear tailored to the younger set.
REI Chief Marketing Officer Vivienne Long told WWD, “The reality is we need to be bringing in not only more people, but the future generation — younger, more diverse — so bringing in almost different types of people that we’ve traditionally had in our member base. A big part of our benefits is really thinking about, ‘What are the needs of a future generation of outdoor enthusiasts?’”
- REI Co-op relaunches its lifetime membership program to support 50-million-member community vision – REI
- 2021 Special Report: New Outdoor Participant (Covid And Beyond) – Outdoor Industry Association
- REI Co-op Relaunches Lifetime Membership Program – WWD
- REI Plans To Grow Lifetime Membership Program To 50 Million, Here’s How – Forbes
- REI upgrades co-op membership program, aims for 50 million members by 2030 – Outdoor Business Journal
Discussion Questions
DISCUSSION QUESTIONS: Will the upgrades to REI’s lifetime membership program help the co-op reach a younger and more diverse audience? Does the program stray too far from REI’s roots or not go far enough?
Poll
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Ken Morris
Managing Partner Cambridge Retail Advisors
Katie Thomas
Lead, Kearney Consumer Institute
This is what we have long been espousing as a good and differentiated form of a loyalty/membership program: unique perquisites that apply only to members.
Wow. Sounds like REI could have raised the one-time fee to $50 and they would still be offering an amazing value. That would have sounded crazy versus the current $30, but it sounds like they took a big lesson from Amazon in offering amazing value. I’m a big fan of L.L.Bean and Eddie Bauer, but this offering is a pretty big pull in the direction of REI. I’m sure the other outdoor brands are taking notice.
I have always believed that Lifetime Value (LTV) is the key to a retailer’s
success, as is detailed knowledge of a customer and their family’s buying habits and preferences. There is no question that this will increase the number of new customers as well as their LTV. This move will increase when they buy, how often and what they spend (RFM – Recency, Frequency and Monetary Value).
Paying $30 to belong to a club for life is not expensive, and the psychology of making the commitment of joining a club or co-op is compelling. The perks seem significant enough, and many new co-op members will do the math on the 10 percent discount and anchor themselves at buying $300 worth of goods to “break even” on the membership fee.
In a highly competitive category, REI has always led through affinity founded off of the $20 co-op fee which was counter-balanced by bounce back offers. The new leadership in loyalty will certainly build on this refresh which was well past due. Take a page out of Nike’s playbook and build an even stronger community given the great outdoors and shared experiences.
I suspect the program’s success will be determined much more by the effectiveness of their supporting marketing programs and not the product itself. There is significant appeal to these new members-only offerings to potential new customers of every age, especially given the program’s extremely low barrier to entry ($30, once). The exclusive collections, members-only access to used gear, and free shipping should especially appeal to younger consumers. An already great program just got better. Now they just need to get the word out!
As a REI member for more than 25 years, I can attest to the value of the membership and now it is even better. The low cost of a lifetime membership is not a barrier to membership. I am surprised that REI hasn’t introduce a tiered membership program with a premium level that has an annual fee and richer perks.
Great idea, and overdue as well. It’s not only the pandemic, everyone’s just more interested in being outside than ever before. Timing wise though, the minute Prime came out, a plan that matched that power only to your brand (like this one), should’ve been underway. But in this case, better late than never!
I think before they raised prices, they tried to actively market the membership to new (younger) clients because I don’t think that they did an adequate job of marketing and creating awareness. The new program can be successful with creative and appropriate marketing – start with TikTok and stay authentic and not “salesy.”
This is very much on brand for REI. The free shipping they need to do to stay competitive, and the exclusivity of Re/Supply is a nice spin on the growing e-commerce trend. As for the discount on services – I actually think this will increase their services business because people don’t think about REI as a services company per se but, if as a member I get a discount, then it’s worth checking them out.
I love REI and believe they have the consumer loyalty and brand differentiation to support this.
But used gear behind the membership paywall seems like an odd choice to me.
REI has already established a loyal and sustainable customer base. A lifetime membership program at only $30 is a significant value and shows how vital providing good service, quality, and benefits are critical differentiators for REI. The old saying from our friends at American Express is that membership has its benefits. With the rollout of this new program and the additional members-only benefits, REI’s value proposition will help retain existing customers and attract new ones.
Loyalty programs have had mixed results in recent years. While discounts, points, and free shipping are nice perks, it’s the exclusive members-only benefits that REI is offering that will truly differentiate the brand.
This is a great move by REI. The Re/Supply program will attract price-sensitive buyers that will gain more purchasing power over the next decade. Additionally, consumers are more “conscious” than ever before about purchasing from authentic organizations that are socially aware (think Toms, Allbirds, Warby Parker, Bombas, etc.) Focusing on the greater good is a solid way to build a tribe of loyalists that rally behind your brand.
It is a great program with many valuable components. For those new prospective customers interested in becoming outdoor enthusiasts, the used goods program can be appealing to purposeful shoppers on a budget along with the free shipping program. Additionally, the brand collaborations may also extend their reach to include more socially media-focused customers that want to stand out and look good when they are outdoors. The program is definitely a big value-add for many types of customers.
Great move by REI. It will reach younger members who are enthusiasts of the outdoors but can’t always afford the expensive gear needed to fulfill their sporting needs especially with the Re/Supply perk. Each of the other new benefits have very focused value towards the younger demographic as well. The only one that is less so is the free shipping option, which based on REI prices are already baked into the price of the products sold. The sustainability option is just hitting the market and will have tremendous long term value. The shop service option opens up entirely new revenue streams to support REI’s store experience.
The membership/loyalty is a great add-on to an already exciting store experience and will definitely expand customer base and drive new revenue for the next generation.
I’m not sure. Look, it’s a great program, I belong to it myself. But it seems to me REI already appeals to younger consumers. I just don’t sense a huge generation gap that needs to be bridged. As to diversity, the entire culture is becoming more responsive (as opposed to responsive) to the needs of diverse shoppers and, again, I’m not sure I ever though REI excluded anyone interested in outdoor activity no matter who they were, what age they were, or where they lived.
It looks like REI is doing what MEC couldn’t do with their co-op membership base. It looks like great value even if I’m not in their target “younger” target audience. 😉
I feel REI’s initiative is appealing to both Gen Z and Millennials. Used gear offerings will motivate more sustainability-loving customers to become members, whereas, discounts and free shipping will trigger conversions from middle-disposable income groups and first-time hikers and bikers.
Moreover, I feel REIs initiative is just apt and aligned with their roots. REI has always been able to differentiate its brand from other market players. They understand their customers’ mindsets, which is reflected in their strategies and the quality of engagement they offer. The tech advancements clubbed with accurate pricing strategies tap all categories of customers.