Retail giant REI encounters a financial loss despite achieving record sales in the year 2022
REI, the popular outdoor retailer, has continued to make strides in promoting inclusivity, sustainability, and environmental stewardship. In a public letter, CEO Eric Artz announced several significant changes that the company implemented last year.
One of the most notable changes was REI's commitment to powering its new distribution center in Lebanon, Tennessee, with 100% renewable energy. This energy will be sourced from the White Pine Solar Farm, a project that significantly reduces carbon emissions and demonstrates REI's investment in clean energy and sustainability. This effort is part of REI's broader environmental stewardship, supporting renewable energy initiatives that prevent millions of pounds of CO2 emissions over time.
REI also made a permanent commitment to its #OptOutside policy, closing its stores on Black Friday and paying employees to enjoy the outdoors. The company also expanded its membership benefits, offering exclusive gear collections, free shipping, the ability to buy and trade in used gear, discounts on shop services and rentals, access to member sales, and an ability to earn money back from its annual Co-op Member Reward.
In terms of employee benefits, REI changed its offering to provide medical coverage regardless of how many hours an employee works. The company also invested $50 million towards pay raises for hourly employees and another $92 million towards employee retirement and bonuses. REI's efforts to foster a diverse and inclusive workplace were also evident, as the company increased its BIPOC employee representation to 27.9% last year.
REI's focus on inclusivity and community engagement was also evident in its events. The company hosted inclusive events like the annual Twinkie Roast, which connects employees across dispersed locations and incorporates sustainable practices like special recycling for waste.
The company's efforts paid off, as it reported a record sales of $3.9 billion last year and added 1.3 million members, bringing its total count to 23 million. Despite these successes, REI swung to a $164.7 million loss in 2022 from net income of $97.7 million in 2021. Operating expense for REI rose 22.6% to $1.8 million in 2022.
Despite the financial challenges, REI is seeking to maintain momentum by beefing up its membership benefits. Through its Cooperative Action Network, REI sent more than 250,000 messages to decision-makers at state and national levels. The company also partnered with 39 founders, provided $2.7 million in grants and investment, and created a network of more than 250 speakers, mentors, advisers, and investors through its REI Path Ahead Ventures incubator for founders of color in the outdoor industry.
As consumer data becomes more readily available, retailers are exploring new opportunities to tap into shopper data. REI's personalized approach to the shopper experience, which fosters inclusivity and community engagement in both physical and virtual spaces, is a testament to the company's commitment to its customers and employees. More than 81% of REI employees report "feeling like their leaders take a genuine interest in their humanity and well-being." 78% of Black, Indigenous and people of color at REI report feeling a sense of belonging.
REI's approach combines personalized, inclusive customer and employee experiences with substantial investments in renewable energy and sustainability projects to uphold its progressive values and environmental leadership.
- REI, through its commitment to renewable energy, has demonstrated a significant investment in clean energy and sustainability, as they plan to power their new distribution center with 100% renewable energy from the White Pine Solar Farm.
- In a bid to reduce carbon emissions and align with its broader environmental stewardship, REI's initiative to source renewable energy will prevent millions of pounds of CO2 emissions over time.
- REI's environmental efforts extend beyond energy, as the company has also made a permanent commitment to its #OptOutside policy, promoting outdoor activities on Black Friday and offering exclusive member benefits like free shipping and gear discounts.
- Employee benefits have been expanded at REI, with medical coverage offered regardless of hours worked, pay raises for hourly employees, and investments in retirement and bonuses.
- The company's focus on diversity and inclusion is evident, increasing BIPOC employee representation to 27.9% last year and fostering a sense of belonging among Black, Indigenous, and people of color employees.
- As consumer data becomes increasingly accessible, retailers like REI are leveraging shopper data to create more personalized shopping experiences that promote inclusivity and community engagement.
- REI's approach to sustainability, inclusivity, and customer experience is not only beneficial for its employees and customers but also serves as a model for other businesses in the outdoor industry and beyond, upholding their progressive values and leadership in the field.
