Dive Brief:
- REI Jerry Stritzke CEO this week hosted an “Ask Me Anything” session on Reddit’s platform this week to discuss the retailer’s decision to stay closed on Black Friday.
- But instead of a warm welcome, Stritzke was embroiled in a heated back-and-forth focusing on the company’s employment policies.
- Reddit commenters questioned the company’s co-op business model, which aided in the chain’s decision to stay closed on Black Friday but requires staffers to sell memberships.
Dive Insight:
Memberships in general can be an effective way to lock in and reward loyal customers, with shipping perks and prices that accrue to members and help make them sticky. Amazon is famous for its Prime membership, which costs an annual $99 and provides the retailer with customers that spend more at the site more often than non-members. Costco continues to be popular and successful as a membership-based retailer. And research shows that many younger customers especially like the approach.
But there may be a limit to the approach at REI at a time when low prices on outdoor gear can be found elsewhere. Apparently e-retail newcomer Jet found its own limits to the model, ditching its $50 annual membership fee just a few months after its launch.
One commenter during the discussion claiming to be a former REI staffer charged that the company’s focus on membership sales to support its co-op business model actually has a deleterious effect on customer service. When his or her membership sales lagged, the person said, the store responded by slashing hours and denying a promotion. Other Redditors claiming to have worked for REI in the past submitted questions about the discontinuation of a 401(k) plan and health insurance coverage.
REI garnered positive publicity this month with its #OptOutside social campaign, announcing that it will be closed on Black Friday and encouraging people to explore the outdoors rather than shop. Fortune ranked REI No. 58 in its Best Companies to Work for 2015, and the company ranked No. 13 in Great Place to Work’s list of retailers alongside companies such as Etsy (No. 3) and Zappos (No. 12).
While surprised by the direction of the conversation, Stritzke said he welcomed the open dialogue.
“Wow,” he wrote on the site. “It looks like this AMA really took off last night. I appreciate the honest dialogue here and believe me when I say I'm listening."
