What retailers can learn from REI's marketing success
Two years after the launch of its celebrated Opt Outside campaign, the outdoor retailer is engaging customers with a new brand message.
Two years ago, REI made a bold decision to close its doors on Black Friday, instead urging employees to enjoy the great outdoors on one of the biggest retail days of the year — one that combined with Thanksgiving Day generates a whopping $12 billion in sales for the industry. REI took the gamble that what would be lost in store sales would be made up for in brand loyalty — and it won.
"It was a high risk scenario," Laura Swapp, director of public affairs and marketing at REI, told Retail Dive of the Opt Outside campaign. But it was ultimately a decision, she said, that was good for its employees and one they hoped would resonate with the co-op’s customers.
The campaign earned the retailer enormous kudos for creativity from industry insiders, sparked an anti-Black Friday movement among retailers and, most importantly for REI, rallied brand loyalty among its environmentally-conscious consumers. The campaign, which urged the sharing of personal stories tagged with the campaign hashtag, performed particularly well on social media, helping earn the retailer a "genius" ranking in 2015 and 2016 on the social media dimension of L2's Digital IQ Index: Activewear.
Once the initial shock value wore off in 2015, the campaign faded into an annual day off for employees as well as a year-round brand sentiment that fits snuggly with the retailer’s penchant to support the outdoors. As the campaign becomes engrained in the nature of REI, a new effort has emerged — this time to take on advancing gender equity in the outdoor retail space.
In April, REI launched Force of Nature, a multi-pronged effort that included a $1 million investment in 26 nonprofits that support women in the outdoors, the development of 1,000 new events for women and a stepped-up effort to expand its offerings of high-tech gear for women.
"There's a big gap with how women are represented in the outdoor industry," Swapp said. "There's a gear gap, there's a gap around who the heroes are, what stories get told, and we felt we had done enough work internally to take on that conversation."
Although the campaign, which Swapp describes as the company’s most comprehensive marketing endeavor, was executed purely as a brand effort, the company’s full-price women’s business was up 20% during the height of its run. "Our sales went way up, which said there's this real interesting connection when you do something worth talking about, that people will come and shop with you. That was not the KPI for this campaign, but we definitely saw it deliver," she said.
Matt Sargent, senior vice president of retail for Frank N. Magid Associates, considers the campaign to be on the cutting-edge of marketing, and it needs to be, he told Retail Dive. For specialty retailers like REI, the campaign’s success hits on three key takeaways for smaller retailers: differentiation, a focused brand identity and engagement.
REI and other specialty retailers have the unique ability to focus their efforts on catering to a niche group of consumers. Unlike mass merchants, they can focus on boosting the quality of a smaller selection of products and price is less of a cut-throat battle among competitors. While product selection in itself is a differentiator, these retailers need to build a more unique position that stands out from the mix, Sargent said.
"Retailers are trying to take on the intangible, like REI investing in the nonprofits that connect women [to the outdoors] and Staples driving sustainability, they differentiate themselves from bigger more generalized retailers like [the] Walmarts or Amazons that don't have these specialty focuses," Sargent (who advised Staples on its sustainability efforts) told Retail Dive.
"We've seen the retailers that can succeed, succeed and grow through the Amazon effect and the overall online effect. They need to have the differentiators," he said. "Whole Foods is another one that had that differentiation and understands its core customer. And it's willing to invest in that core customer in ways that might not seem to provide a direct ROI, but can provide an indirect ROI if they're able to study it."
So how do retailers figure out whether to take a stand on social issues and which issues will resonate?
For one thing, it's becoming increasingly less risky for retailers to express political and social stances, Ben Feldman, L2 client strategy associate on the retail team, told Retail Dive. "I think there has been a shift in general in retail where a lot of brands are being unapologetically progressive in a lot of ways," he said.
In the case of Force of Nature, Swapp said her team conducted a lot of research to figure out the context of how to enter the conversation on gender equality, something that was already a core company value. She said they asked themselves, "'What is the world talking about when it's talking about gender equity? How do we fit into that conversation and be additive?'"
Of course taking a stand means there’s always a risk that customers don’t align with the message, and marketing teams need to be able to adjust once customers have reacted to the content. "We did a whole bunch of work around risk to the business and a lot of scenario planning," she said, adding that during the process she asked herself. "'What if the world really doesn’t receive this well? Where will we respond and how?'"
By taking on a dimension of identity, Swapp said, she knew that people would experience the campaign on a very personal level. And they did. To push the program, REI created its first direct mail catalog that focused little on promoting products. While that piece of the campaign might not have led to more sales, Swapp said she knew it was catching on when she received multiple phone calls from teachers asking for hundreds of copies of the catalog to turn it into curriculum.
Focused brand identity
Everything REI does is rooted in the idea that "an outdoor life is a life well lived," according to CEO Jerry Stritzke and chair of the Board of Directors Cheryl Scott. And that means REI knows its core customers — outdoor enthusiasts — spend a significant amount of their time in natural places and therefore value the care of them, making preservation and sustainability fitting core values that resonate across their customer base.
When it came to taking on gender equality in Force of Nature, Swapp said the topic had been top of mind internally at REI for the last couple of years. "That acted as a catalyst for us to start talking to women." she said. "We did focus groups here at campus, we talked to our consumer panel and then we did focus groups around the country and started to listen deeply to women talk about the relationship they had with the outdoors."
In order to build a focused brand identity, retailers need to have a good understanding of their core audience, and segmentation is key to getting an idea for what customers care about, Sargent said.
"The key is if you’re going to do this, you’ve got to invest in that understanding of the customer. What they’re looking for and test these ideas."
Senior VP of retail for Frank N. Magid Associates
"They've got to understand what those succinct segments are, they have to understand how they’re different from the rest of the world and then figure out how their message appeals to them," Sargent said. "In the case of REI, they clearly defined that the female outdoor enthusiast is a key and growing demographic."
But the campaign isn’t just about getting a larger share of the female outdoor enthusiast market, Sargent said, it’s more of a category expansion and a way to curate the core customer base.
And in order for messages to truly resonate, authenticity is paramount. "The key is if you’re going to do this, you’ve got to invest in that understanding of the customer. What they’re looking for and test these ideas," Sargent said. "There needs to be that level of authenticity and if you don’t do your homework in terms of researching your customer that authenticity can miss the mark."
In order for any campaign to really stick with consumers these days, it needs to be shareable. The Force of Nature launch video — which features women running up rocky hills, canoeing down rivers and sleeping under the stars all the while refuting the stereotypes that women "should" abide by — earned REI the highest organic reach of any piece of content REI has ever done.
"We were able to measure that and we can say that’s something we can’t pay for," Swapp said. "That is our unpaid reach, that launch piece of content, which is that emotional video to say 'We understand the compression you’re under and we know outdoors offers liberation,' and the fact that that was shared so broadly was a sign that it was landing well."
REI’s campaigns do well with no small thanks to their engagement on social media, Feldman said. "They posted content to Instagram, Facebook and coupled that with an aggressive display advertising campaign. I think the big differentiator for REI on social media is their willingness to amplify across the host of digital channels than just doubling down on one and thinking that's going to be enough," he said. Different platforms bring different benefits, he said, adding that Instagram in particular is great for organic reach and Facebook and Youtube are more of a pay to play platform.
"We've had to date more than 470 million earned media impressions. These are the kinds of things we can't buy."
Director of pubic affairs and marketing, REI
"That's an environment where you can get really targeted with your reach and take advantage of the targeting capabilities and data that YouTube and Facebook offer. Those two [are] really important to differentiate. Realize that you're going to be talking to somebody different and [that] on Instagram you're going to be reaching existing customers, and maybe those other platforms are allowing you to apply your new customers. And the web ad display piece is about driving awareness in general and so you're going to be a lot less targeted there."
The campaign's title, Force of Nature, grew out of conversations that Swapp and her team had with women across the country. For many of the women, it described their sentiment of intimacy with the outdoors and how it fuels their lives, Swapp said. That connection enticed many woman across channels to share their own personal stories with the Force of Nature hashtag, building the social conversation around the campaign in an organic way.
"We've had to date more than 470 million earned media impressions. These are the kinds of things we can't buy, like the organic reach the earned media, customers calling and asking for something, [these] are really important when we're talking about a non-sales driven kind of campaign."
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