REI Co-op is making significant changes to its footwear strategy.
For starters, the outdoor retailer confirmed with FN that it is exiting its REI-branded footwear business after 2024, four years after the company revealed to FN that it would begin producing its own shoes. In the time since its initial launch, REI has delivered eco-friendly hiking boots, trail runners and more.
“We will still partner with brands, but for the foreseeable future, we will not be producing REI-branded footwear products,” Fan Zhou, REI general manager of run, told FN. “There is amazing innovation out in this space, we’re excited to lean into that and we don’t think our true differentiated value add is in the manufacturing of footwear.”
REI confirmed that its Flash TT hiking boots and Swiftland MT BlueSky trail running shoes, which are in stores now, are the last of its branded footwear that will release.
“Our results for these have been positive. We are super proud of the sustainability attributes that exist on both of those products. We feel like we’ve helped pushed the industry forward, these current models are the pinnacle example of that,” Bennett Grimes, senior manager product strategy for REI Co-op Brands, told FN.
However, as the retailer exits one business, REI is doubling down on another: running.
In April 2022, with consumer demand for running and fitness products doubling at REI since COVID-19, the retailer announced a multiyear strategy created to build upon its growth in the category. That included a new in-store experience that it tested in three of its California doors: Tustin, Burbank and Manhattan Beach. The following year, REI debuted three more of these shop-in-shops in Washington, D.C. locations.
For 2024, Zhou said REI will increase the count by nine, and the new in-store running destinations will be located in Denver, Chicago and L.A.
“Those are markets where there are robust running communities, running in lots of different ways, year round. We’re going where the our consumers and our members are telling us they’re running,” Zhou said. “These are also markets where we have strong teams on the ground, working for stores that are doing well, that have been a part of the community for a long time and have established connections. And these are markets where we’ve seen signals in our data to say there’s already demand. We already have customers coming in buying run disproportionally to other markets.”
In terms of what brands consumers are looking for, Zhou said Hoka and On “have been on a huge tear,” and REI has seen “a lot of love” for Altra, Salomon and Brooks. “Those five brands are doing novel, interesting and compelling things for the consumer,” he said.
This spring, Zhou confirmed REI reintroduced Asics into its portfolio, and the retailer has added both Norda and Craft into select doors and online via REI.com. “Having variety, seeing brands introduce innovation newness into the space, we’re here for it,” he said.
REI’s increased focus on run has had a tangible impact on sales. For instance, Zhou said road running footwear now accounts for roughly 60 percent of running sales, with trail running accounting for the remaining 40 percent. Before these efforts, Zhou said those percentages were flipped. What’s more, Zhou said REI’s run business has consistently grown double digits, and it is growing “significantly faster” than total REI.
The successes, however, have come with challenges.
“We have to fire on all cylinders cross divisionally. Investing in store fixtures and the layout without any community activation, any training for our team, without novel partnerships with our brands, it doesn’t work,” Zhou said. “The most important thing we learned is how to get all those pieces to come together in the right way.”
He continued, “In L.A. [in 2022], it was a bit of, ‘Let’s get the store layout, let’s layer on the training, then we’ll figure out community activations and how we can get better with our brand partners. It was all sequenced and a bit frenzied. In D.C., we went into it knowing we need all of this to land at the same time. Now as we think about Denver, Chicago and the additional L.A. stores, we’re going into these markets knowing we need all parts of that equation to land.”
About the Author
Peter Verry is the Senior News and Features Editor for Athletic and Outdoor at Footwear News. He oversees coverage of the two fast-paced and ultracompetitive markets, which includes conducting in-depth interviews with industry leaders and writing stories on sneakers and outdoor shoes. He is a lifelong sneaker addict (and shares his newest purchases via @peterverry on Instagram) and spends most of his free time on a trail. He holds an M.A. in journalism from Hofstra University and can be reached at peter.verry@footwearnews.com.
