The great outdoors is an endless playground filled with adventure and beauty, and few retailers are more committed to getting us off our couches, and properly equipped to enjoy it, than Recreational Equipment, Inc. (REI). What began in the 1930s as an outdoor gear co-op of 23 mountain climbing buddies, is now the nation’s largest consumer cooperative with 125 stores and roughly 11,000 employees. But no matter how large REI gets, the company stays committed to nature conservation and stewardship, high quality equipment, a happy workforce, and – most importantly – keeping its customers outside.
As a co-op, REI has always had a long-term strategic vision and approach to running its business. However, the company’s old retail planning system lacked a good strategic planning function. It did not have a flexible product hierarchy, could not handle REI’s private label business, and was completely unreliable. “A merchant would put their plans in for the year and hit save and the next day it would have evaporated,” says Tom Kimmet, director of merchandising, operations, and planning at REI.
After successfully implementing SAP ERP, REI set in motion the next step in its vision – to have an integrated merchandising tool on one platform – and implemented the SAP Planning for Retail application. “When you knit together best-of-breed systems you end up with gaps … SAP gives us an integrated platform,” explains Kimmet. Moving 500,000 SKUs into a better system and switching to cost based accounting also means better planning, visibility, and reporting for REI. “Moving to a cost method of accounting instituted more rigor into our planning structure,” says Kimmet. Now that SAP is in place, REI can see deeper into its core business, better plan its private label business, and drive growth. “With SAP Planning for Retail we can focus more on our products and manage our inventory better,” says Kimmet.
Down the road, REI hopes the improved data and analytical tools in its SAP systems will allow it to better plan around local demographics and create regionally relevant assortments in its stores. “Our customers are always evolving, we need to keep up with them, understand what they want, and provide them the assortment they expect when they walk into their REI store,” says Kimmet.
REI’s long-term commitment and focus on providing an amazing experience for its customers, both inside its stores and outdoors, will keep people playing outside for many years to come – and that is a good thing for everyone.