Imagine you order yourself a new jacket from REI for your regular day hikes. The first day out, you realize that the sleeves are a little short. You’ve spend a fair amount of money to purchase the product, which you hope to use for years to come, so you decide to return it. The jacket is virtually new; you haven’t caused any damage or spilled anything on it. So what is REI to do with it?
The outdoor gear retailer wants to resell it, and it is using some innovative methods to do so. In its physical stores, it has long hosted “Garage Sales” of lightly used, returned items, allowing consumers who live in proximity to those stores to score great deals on selected dates throughout the year. But that option excludes a vast range of consumers who do not live near a store or who might not be able to get to their local store on the date of the REI Garage Sale.
In response, REI opened a section on its website to make the used items available to anyone visiting its site. The products sell, on average, for about 65 percent less than the new versions would cost. In addition, REI guarantees that they are usable and do not need any repairs, though they may require cleaning. Beyond these direct sales, the site supports swaps between consumers.
Available for less than a year, the option already has proved remarkably successful. In particular, it aligns with REI’s broad sustainability image, because it enables hikers and outdoor enthusiasts to embrace a reuse-and-recycle form of consumption. Furthermore, the lower prices allow more potential customers to obtain REI-branded products, which tend to be priced toward the higher end of the scale. Assuming they like the items, REI likely can count on them coming back for more when they require additional gear.
Although in some ways, these options mimic second-hand stores, the unique feature is the location. That is, few retailers sell both new and used products from their own brand in the same online and offline spaces. By doing so, REI hopes to strike a new path, both among consumers and for its future success.

Discussion Question:

1. From REI’s perspective, what are the advantages and disadvantages of selling used REI merchandise?

 

 

Source: Tom Ryan, Retail Wire, August 27, 2018