REI finds an audience for used gear

Discussion
Source: rei.com/used
Aug 27, 2018
Tom Ryan

Addressing needs for both sustainability and affordability, REI is making its used gear website permanent while adding a number of enhancements.

The site, in pilot since October 2017, is basically an online version of its in-store Garage Sales, events that regularly draw crowds but are limited to members who live near physical REI stores. The site sells lightly-used returned products that may require cleaning, but not repair.

On average, products from REI.com/used can be purchased for up to 65 percent below the same new items. REI launched the site partly because it found the cost of brand-new gear can be a barrier to getting people outdoors.

“In its first 10 months, the beta test has been successful beyond all expectation, which tells us there is an inherent appetite for high-quality, lightly used product at lower price points,” said Peter Whitcomb, REI’s director of strategy and leader of the co-op’s used gear efforts.

The updated site features a search function, member-to-member gear swaps, and additional brands and categories.

The program also aligns with the retailer’s broader sustainability efforts. In April, REI unveiled a set of product sustainability standards that hold vendors and other partners to higher standards.

Greg Gausewitz, REI’s manager of product sustainability, said, “If you’re an outdoor enthusiast looking to reduce your environmental footprint, you can approach this from both ends: by looking for more sustainably made products at the outset, and by getting more life out of existing products by purchasing used gear.”

Also in the outdoor space, The North Face in June began piloting an online store selling “renewed” apparel items that have been returned or initially found to be defective or damaged. Patagonia last fall launched a website where consumers can trade, sell and buy second-hand Patagonia goods.

Consignment stores selling vintage and “gently used” stores have been seeing strong demand, and websites selling second-hand wedding gowns and others luxury items have gained in popularity in recent years. Selling used as well as new items on the same website, however, remains rare.

Discussion questions: Will selling “high-quality, lightly used product at lower price points” likely impact REI’s sale of full-price items and overall margins? Do you see opportunities for REI to provide greater value to consumers and supporting sustainability goals through REI Used?

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"These initiatives reinforce existing relationships and encourage new customers to try shopping at the retailer."
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17 Comments on "REI finds an audience for used gear"


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Anne Howe
Guest

In my younger years, I spent an inordinate amount of my income on outdoor gear, from bikes to backpacks to cross-country skis … and would have loved REI and their commitment to getting people outdoors at prices they can afford. Retailers with a well-defined purpose can and should continue to find clever and helpful ways to serve their customers. I fully support their effort to sell gently-used gear and am planning to go take a look for a few winter jackets!

Charles Dimov
Guest

If anything, selling lightly-used goods might help REI. It adds to the treasure hunt feeling when shopping. It can get customers to check the site and REI more regularly. This is good for impulse buys or even for educating shoppers on new items. Plus it all fits into the brand initiative of responsible retail sustainability.

This is a smart move. I will watch intently to see how it works out for REI.

Evan Snively
BrainTrust

Great call outs Charles, the “treasure hunt” adventure is something that is largely missing from the outdoor goods shopping experience since the price points are usually high enough that purchases are very much planned. I have a yellow North Face shell that I found at a used book store called “Old Man Berkins” in Breckenridge, CO and it is one of my favorites not only because I have never seen another like it but also because of the fact that I was at the right place at the right time to find the deal.

Art Suriano
BrainTrust

I see the concept as wise, and it should be successful. I believe the used-gear buyer in most cases is not the new gear customer and is more likely a secondary market. Think of all the items we sell used such as cars, musical equipment and the many items found on eBay. Most of these shoppers are looking for bargains on things they want and know they can not afford new or they are those looking for some vintage item as a must-have and are willing to pay big dollars for it.

Assuming REI markets this program successfully, I don’t see it taking away much if anything at all from new merchandise sales. I do see it developing a loyal secondary market with customers who will be interested in taking advantage of the opportunity to purchase slightly-used gear they will enjoy. I would expect to see other retailers in sporting goods and different categories soon to follow.

Chris Buecker
BrainTrust

Yes, definitely, this will provide a greater value. It reminds me of the time when online started to grow substantially. Some traditional retailers at that time were simply not interested in selling online, as they just reckoned online would stay a small niche in their business. We all know how this story went.

By offering high-quality, lightly-used products REI ensures it will be in the driver’s seat, not letting the consumer out of their ecosystem. Once in contact with such a consumer, REI might be able to have him buy used or convince him to upgrade to new products.

Zel Bianco
BrainTrust

It confirms an idea I’ve been kicking around that most people have no problem buying high-end branded products that are not perfect if they can do so at a significantly reduced price. I need a pair of hiking shoes and don’t hike enough to warrant spending a big number on a new pair. This meets my needs perfectly. There is a market for high-end goods in every category that are perfectly fine to wear and use but may have a few stitches out of place. Every manufacturer has goods that cannot be sold at full retail because of a slight flaw. Why not makes these available to those that don’t care they are not perfect? Will it hurt their higher-priced offerings? There will always be consumers that want and need their purchases to be flawless.

Joan Treistman
BrainTrust

REI’s lightly-used product program is just the right approach to attract Millennials especially, and others who feel that sustainability and “recycling” clothing, furniture, electronics, etc. is desirable. Eileen Fisher has a similar approach where they will pay customers for used clothing that they will clean and offer shoppers. The added incentive to bring in the used clothing is that some percentage of the sale will go to charity.

These initiatives reinforce existing relationships and encourage new customers to try shopping at the retailer. I also think that the guilt associated with holding on to stuff that is not being used but that can still be used by others is another motivation for engaging shoppers. The brand equity each retailer builds is solid. They’ll find out soon enough if there is some cost they didn’t expect, but I believe that cost will be seen as an investment for long-term corporate reputation and sales growth.

Cathy Hotka
BrainTrust

REI is joining Play It Again Sports and other outlets successfully selling gently-used merchandise. Because it works for others, it should work for REI, which enjoys a strong brand identity and consumer trust. Congrats on the new business model!

Mohamed Amer
BrainTrust
Mohamed Amer
Independent Board Member, Investor and Startup Advisor
1 year 4 months ago

REI is on the right track! This smart move will expand its purchasing base. This is an additive move and should not detract from its full-price items. If anything, it may bring those on the sidelines into the REI orbit and at some point some will be incremental the full-price crowd. Another example of a retailer piloting a business idea, studying the results and doubling down. Should be all upside from here for REI.

Warren Thayer
BrainTrust

Great idea all around, for the reasons noted. So long as performance-based equipment is not sold this way (I’m thinking carabiners and such), it’s all good. But I’m quite sure REI knows better than that anyway.

Ryan Mathews
BrainTrust

The devil, as always, is in the details. We need to know how many people will participate, how much labor will be used to process the orders, what happens with returns when my version of slightly-used differs from yours, etc. It could be one of those offers that gets more and more expensive to continue as its popularity increases. But practicality aside, this is really a double-edged sword for REI. On the one hand, as my fellow BrainTrusters have noted, it is likely to be wildly popular with the outdoor equipment set. On the other hand, it may — over time — create negative price perceptions for new products, so managing the pricing of the “gently-used” items is really, really critical.

Georganne Bender
BrainTrust

I have a wealthy friend who advised me to always buy expensive watches used, maybe that’s part of why she’s wealthy. I haven’t tried it yet, but it does have merit. In our seeking-what’s-sustainable world, selling gently used products makes sense.

It’s also everywhere. Play It Again Sports was a family favorite when my son outgrew his gear faster than he could wear it out; QVC sells returned items at a lower price marked “as is” and just last week I came upon a table of used Louis Vuitton bags discretely displayed on the sales floor of a newly remodeled Lord & Taylor store.

Consumers are all over thrift shops right now, it’s almost a badge of honor to share how much you saved. Kudos to REI on its Co-op website.

Camille P. Schuster, PhD.
BrainTrust

Sustainable, well-crafted outdoor gear is expensive which often precludes consumers who would want to purchase these products but can not afford them from buying them.

Offering the gently-used products at lower prices makes them available to a new group of consumers. This is a great idea.

Doug Garnett
BrainTrust

There has always been a big market for used gear in both indoor fitness (treadmills, etc.) and outdoor fitness (like REI). But it’s messier to offer those than just open boxes of new stuff where you can guarantee its condition.

I’m glad to see REI taking on the challenge — and hopefully making some money by offering this for consumers.

The truth is that in any fitness market some goods are used heavily, but many aren’t. And to give those which are lightly used a second life is an excellent idea — as a business.

I’m a bit concerned by how much REI is making this about sustainability. It is and that’s a good thing. But if this effort is going to continue, first and foremost it needs to be a successful business.

Mel Kleiman
BrainTrust

Great idea and everyone and every thing becomes a winner; the environment, the new customer, the present customer and the company.

Shelley E. Kohan
BrainTrust

REI shows again their commitment to the environment and their customers. Allowing customers to buy gently used outdoorwear and gear is a great model. REI is not trading down or losing sales to full price but is adding MORE reasons for customers to be loyal to the brand. In addition, REI demonstrates their delivery of quality products that withstand the wear. The member-to-member gear swaps help deepen customer relations through building community involvement that BENEFITS the customer. The premise, which I agree, is to decrease the barrier (the cost) that may prevent people from participating in an outdoor activity.

Craig Sundstrom
Guest

If it’s really true that “cost of brand-new gear can be a barrier to getting people outdoors,” and REI is diligent about maintaining quality standards, then this sounds like a great idea … and let’s be candid, in an era of eBay and Craigslist, if they don’t offer it, someone else will. I won’t comment on the part about the price of “new” being so high people can’t afford it.

wpDiscuz
Braintrust
"These initiatives reinforce existing relationships and encourage new customers to try shopping at the retailer."
"Because it works for others, it should work for REI, which enjoys a strong brand identity and consumer trust."
"...everyone and every thing becomes a winner; the environment, the new customer, the present customer and the company."

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