Outdoor Retailer REI Doubles Down on Rental and Used Gear Sales
In the latest sign that sustainability is the retail industry’s big trend, specialty outdoor gear retailer REI is “significantly” expanding its rental and used gear sales programs and trade-in options.
REI decided over a year ago to make rentals and what it described as "re-commerce" in used gear sales a key business focus to give customers a more affordable option to buy outdoor gear and allow those with growing children or little storage space to trade in or trade up. But perhaps the most critical driver behind these initiatives is Millennial shoppers, who make up a third of the company’s rental customers.
Over a third of Millennials would rather rent than own a product. Not only that, those under the age of 40 made up the majority of the one-million-plus new members REI added last year, to a total of over 18 million.
“Customers look for these options,” Peter Whitcomb, REI’s 35-year-old director of new business development, told me. “I’m a Millennial customer. I use car sharing and Airbnb. I don’t need to own everything. … (Millennials’) attitudes toward hard ownership of products and perception in sustainability are changing.”
Millennials are “keeping the product in use longer,” Whitcomb said, adding: “These are viable business models. We are learning how to scale that.”
REI’s foray into the so-called circular economy is part of an industrywide trend responding to environmentally conscious consumers who have said they will spend with brands that align with their values. The women's clothing brand Eileen Fisher, for instance, sells “upcycled” fashion by redesigning and reselling products that customers have returned. Clothing rental service Rent The Runway, with sustainability a key part of its business pitch, reportedly recently became part of the “unicorn” club, with its valuation topping $1 billion.
Reflecting a consumer shift to experience-oriented spending, travel excursion packages, classes, workshops and outings ranked as the fastest-growing business for REI last year, Artz said. “It’s become a meaningful business,” he said, adding that REI is “leaning into Millennial type of trips,” including more à la carte options.
Artz added: “So much is more than just a transaction. Customers see sustainable business practices and us giving back to society. They say, ‘You are relevant to our outdoor experience.’ … When it comes to the competitive landscape, the co-op model can be a competitive advantage.”