REI BUSTS CONVENTION

Outdoor retailer Recreational Equipment Inc. defied the new economy’s conventional wisdom. REI never treated its online business as a technical experiment; the company expected its Web division to post profits on its own. And REI executives didn’t furrow their brows over “channel cannibalization” — the fear that Web sales (at www.rei.com) would eat into catalog or in-store revenues. Instead, REI guessed that a customer’s experience — and buying — would be enhanced by multiple ways to access its mix of sportswear, technical clothing, and gear. Its research later proved it: Customers who added Web buying to their in-person shopping spent 24 percent more at REI stores and 31 percent overall. “We’ve found that a multichannel customer is our best customer,” says REI spokeswoman Jennifer Lind. One of the reasons that, while other retailers lost money in 2001, REI saw sales increase by 6 percent. Sometimes going against the conventional wisdom pays.