REI's "garage sale" events are so popular with members of the co-op that shoppers have been known to camp out in line the night before. The periodic store sales, which have been a tradition of the company for decades, offer huge discounts on merchandise that has been returned to REI, often with little or no wear. The cult following of the garage sales gave REI the idea to expand their used gear sales online, which the company launched in 2018.
"Since then our used gear business has exceeded expectations," Ken Voeller, REI's manager of new business development and e-commerce, told Business Insider in an interview. "Our online used business this year is going to be up nearly 100% to last year."
Given the surprising success of its online used gear business, REI decided to expand even further in 2020.
In October, the company opened two used-only stores, one in Los Angeles near the company's Manhattan Beach store, and another near the Conshohocken, Pennsylvania. The company also recently expanded its online shop. Now, REI members (those who purchased $20 lifetime memberships) can trade in their old gear in exchange for REI credit, either in person or by mail. If accepted, those traded-in items then get listed on REI's used gear website. Until recently, the used gear online shop only sold returned items.
The timing for REI's investment into the resale market is right: resale is big and getting even bigger — it's currently valued at $28 billion and expected to reach $64 billion by 2025. Other major retailers have expanded their resale offerings this year as well, like Walmart, who partnered with resale site ThredUp. The younger generations that made resale a popular retail option, due to its affordability and sustainability, are also driving REI's used gear sales.
"Our use gear customer tends to skew millennial and gen Z as compared to our core business," Voeller said.
It's also a year where outdoor activities surged in popularity, and many consumers were trying certain sports or adventures for the first time. The outdoor retail industry is known for being expensive, sometimes prohibitively so, and Voeller said many customers turned to used gear for more entry-level access into the outdoors.
"We started to see our members turn to used gear as a way to get into new activities," Voeller said. "For example, we'll have some members who buy a pair of hiking boots from us via our used gear business. And that's the first time they're buying hiking shoes."
Because they're newer to the activities they're shopping for, Voeller said used gear customers usually have "less of an exact idea of what they want." They might know they would like to buy a tent or a sleeping bag, but they haven't yet set their sights on a specific brand or model type. For that reason, Voeller described the resale market as focusing more on "breadth than depth." The company wants to offer consumers a wide range of products from different brands, versus variety within a specific product or brand subset, because entry-level consumers likely won't be as choosy about what model or colorway they buy.
For an outdoor retailer like REI, getting into the used gear market is an all-around win. It helps the retailer achieve sustainability goals that give it credibility in the outdoor world, and affords more people access to expensive gear — two key concerns that also resonate with the younger generations most interested in the resale market. As such, Voeller sees resale as ripe for continued expansion.
"Circular commerce businesses are going to play a bigger role in retail over the next few years," Voeller said. "They're a way for retailers to continue to grow revenue while not necessarily continuing to grow their impact on the environment. And I think as a mission-driven company, that's, that's really important to us."
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