REI Bets on Web-Store Combination in Japan

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KENT, WA -- REI, an outdoor gear cataloger and retailer, relaunched its Japanese Web site last month to feature payment in yen and local order fulfillment.


The company has had a Japanese site up for about a year but it was a straight translation of the US catalog with payment in dollars via credit card only and fulfillment done from the US. Delivery could take weeks.


"Right now we have an all-Japanese site in yen with local order fulfillment and we can get product to customers in a matter of days," said Mike Foley, spokesman for REI.


"We have a warehouse and distribution center in Japan with some pretty sophisticated technology and a lot of inventory control tied together through an SAP system."


The new site went live five months after the company opened its first retail outlet in Tokyo -- a 30,000-square-foot "flagship" store located in the Grandberry Mall, a new shopping center in the Japanese capital.


Store and site are intimately linked, Foley said. "We have an Internet kiosk in the store and if you buy online and want to return the product or need to get it fixed you can take it to the store rather than ship it back.


"You can order from the Internet at the store and have it delivered in your house. The site has 78,000 different products online, far more than even our largest store could display.


"So if there is something a customer wants and can't find, a sales rep can walk him over the kiosk, find what he wants online, and have it at his home within a few days.


"If he's the type of person who doesn't have much confidence in e-commerce he can pay for the item at a cash register. Now education isn't a strategic goal, but educating customers helps promote our Internet line of business through our stores."


Although REI still has a print catalog in Japanese that is mailed out once a year, the site "is a bit more than just a catalog. For instance our site has 45,000 'learn and share' pages."


On these pages customers can learn how to fly fish, ride a trail bike, find the best ski style and size and the right gear for survival camping. People can exchange information in chat rooms and on bulletin boards.


"REI's adventure travel company is linked to the site so it is much more of a complete community experience than you could really do in a catalog," Foley said. "Initial Japanese reaction has been positive."


But he added that was not surprising given the hoopla that surrounded the opening of the store. "We were totally swamped. We had the US ambassador, [former speaker of the House] Tom Foley climb a 45-foot-high rock-climbing pinnacle inside the store."


Store personnel provided safety backup with climbing ropes. Outside, REI has built a bike trail for testing trail bikes; inside it had a cantilevered foot trail for checking out walking shoes.


All these are featured in US flagship stores and demonstrate the pulling power of American merchandizing in the Japanese market, he said, and "our commitment to Japan."


The company is a cooperative with large US and foreign membership that costs $15 and provides patronage refunds and travel discounts. REI already has 80,000 members in Japan.


"We invested a lot in infrastructure, fulfillment and warehousing and we plan to maximize our resources through an extended presence in Japan. We plan to open more stores eventually."


REI runs a small call center which is geared to helping the company achieve more online sales in Japan. "Right now we have the ability to serve customers any way they want to shop -- by phone, online or in our store."
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