It is a bluebird day in the mountains…..the trail winds its way through towering cedars, mirroring the curve of a small brook. The trail climbs, rewarding hikers with sweeping views of saw-tooth peaks and a full palette of early summer wildflowers. Finally, reaching the summit, the hikers can breathe in a sense of accomplishment and the awe-inspiring 360° view. This is hiking in Washington State–home of Recreational Equipment Incorporated–better known as REI. The outdoors and adventure pursuits are the core of this thriving Pacific Northwest business. REI “believes a life outdoors is a life well lived.”
Yet, REI is striving to grow in spite of increasing competition from online retailers, large brick and mortar retailers, and smaller, local specialty shops. In this environment, how can REI position itself to further connect with customers? What can REI do to better resonate with the next generation of customers–including attracting younger and more diverse audiences? How can REI expand the definitions of “outdoors” to bring the essence of adventure to everyone?
Enter the Foster School of Business’ Capstone Case Competition, part of the undergraduate experience for all seniors. Just a few weeks prior to graduating, nearly 300 Foster students in 57 teams analyzed the competitive landscape of outdoor retailers to offer innovative recommendations to REI executives on how to connect with new customers–including the Millennial demographic, expand existing relationships and ultimately to get more people outside using REI products. For Vik Sahney, Vice President of Sustainability “the case competition was a great way for REI to engage with and support the UW and at the same time was a great source of creative ideas for the co-op. A real win-win.”
I learned the importance of working with people you genuinely enjoy. I think we won, not because of the number of hours spent on the project, but because of who we spent the hours with. We worked well together, supported each other, and laughed a lot.
The students responded to this challenge with a diversity of solutions–from apps to promote social networking (hiking meet-ups; gear sharing; personalized shopping; etc.) to strategic partnerships and acquisitions of lifestyle brands targeted at Millennials and up-coming Generation Z. Although every team is to be commended for the effort and energy expended in developing their “big ideas” and presentations, two rose to the peak.
Claire Covner, Adam Kinkley, Furkan Ozunal, Patrick Sa, and Katie Shin’s strategy of “Customize, Communicate, and Connect” features tools to customize a shopper’s in-store experience by developing a member profile and “checking-in” upon arrival at a REI store–where they are greeted by a “green vest” with iPad in hand, ready to serve their individual needs. The team’s solution also featured a non-monetary member rewards program and a large-scale outdoor event to showcase the brand through lifestyle activities.
The second winning team comprised of Austin Babcock, Beau Butaud, Michelle Cary, Allie Jones, and Jessica Rankin offered a multi-dimensional approach–including a student Co-Op membership that offered a discount instead of a rebate (for 4 years), strategic partnerships with lifestyle brands including Poler, Miir, and Topo, a co-branded beer with New Belgium, pop-up shops and a marketing campaign with the tagline, “Adventure Starts Here.” Check out the fun and energizing 15-second ads this team developed on YouTube.
Learning from the Capstone Case Competition is multifaceted. Katie Shin remarked that her team “made efforts to present not only a creative solution, but a practical one that really resonated with REI’s co-op structure. Going out to conduct primary research allowed us to learn more about REI’s current presence in the millennial market.” Allie Jones’ take-away centered around people: “I learned the importance of working with people you genuinely enjoy. I think we won, not because of the number of hours spent on the project, but because of who we spent the hours with. We worked well together, supported each other, and laughed a lot.”
the case competition was a great way for REI to engage with and support the UW and at the same time was a great source of creative ideas for the co-op. A real win-win.
Just the day after former REI CEO, and now U.S. Secretary of the Interior, Sally Jewell (’78) spoke at the University of Washington’s commencement, both teams had the opportunity to present to senior leaders at REI HQ in Kent–including CEO, Jerry Stritzke. Since taking the helm of REI three years ago, Jerry Stritzke has inspired the company and its employees “to have more fun, and embrace the spirit of being outside.” He and his team brought their sense of curiosity, passion and humor to host an open conversation with the students–listening to their recommendations with open minds and the goal of “outfitting its members and the community for a lifetime of outdoor adventure and stewardship.”
Developing the case and organizing the competition is a collaborative effort! Many thanks to Rick McPherson, faculty course coordinator; Andrea Bowers case writer extraordinaire; Clay Schwenn for coordinating judges and logistics for the competition; all of the friends, alumni and representatives from REI who serve as judges; Paul Frogley, Director of Corporate Relations; and Vik Sahney from REI for your willingness to partner with the Foster School of Business.