REI vs Employees | Fast Five Shorts
This Omni Talk Retail Fast Five segment explores REI’s potential boycott ahead of its biggest sales event of the year.
Chris Walton and Jenna DeFranco break down how REI’s values-driven brand could amplify the impact of labor disputes.
They also discuss whether values-based retail can hold up when financial pressure hits.
⏩ Tune in for the full episode here.
#REI #RetailLabor #BrandReputation #RetailLeadership #RetailNews #OmniTalk
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Transcript
The REI union has voted to authorize a boycott of REI's annual anniversary sale, the co op's biggest revenue event of the year, with the final decision expected by May 1.
Speaker A:Following REI's decision to declare an impasse in contract negotiations and begin unilaterally cutting benefits and wages.
Speaker A:It's never good when you have to read a headline like that.
Speaker A:According to Retail dive, workers at 11 of REI's roughly 190 stores voted by an overwhelming majority to authorize the boycott after REI declared an impasse in February and began implementing to benefits, starting wages and raises, moves the union has called unilateral and illegal.
Speaker A:The breakdown followed a January last best and final offer from REI that the union rejected unanimously.
Speaker A:REI says the union has yet to make a counterproposal that would restart talks.
Speaker A:REI's anniversary sale, for those that may be not as familiar with it, runs for about 10 days leading up to Memorial Day and represents the retailer's highest traffic highest sales event of the year.
Speaker A:The boycott would apply to both in store and online shopping across all REI locations, not just unionized stores.
Speaker A: union showed a real muscle in: Speaker A:A sign that customers may be willing to follow the workers leads again.
Speaker A:Jenna, REI built its brand on progressive values and community trust and now it's staring down a boycott at its most important sales event.
Speaker A:Does this boycott have real teeth?
Speaker A:And what does the situation tell you about the limits of values based retail when the financial pressures get real?
Speaker B:Yeah, I think this one has real teeth more than most boycotts.
Speaker B:Yeah, I think REI's customer base is so deeply values driven and probably more than almost any other retailer.
Speaker B:And when you build a brand that's built on community and trust and, and doing the right thing, you don't get to play hardball with employees without consequences.
Speaker B:So the fact that members are already rejecting board nominees last year is a huge signal.
Speaker B:I don't think that's noise.
Speaker B:That's organized, values aligned pushback and values branding works until it gets tested financially.
Speaker B:And I think that's this is that test.
Speaker B:So I think the biggest risk for REI is losing credibility, not just revenue.
Speaker B:And credibility is way harder to win back.
Speaker B:And it's not just a labor issue, it's a brand identity crisis and those are really the hardest to navigate.
Speaker A:Do you think that that values based retailing can actually work in the long term or do you Think it always will come under financial pressure?
Speaker B:That's a great question.
Speaker B:I think it can work.
Speaker B:I think there's going to be financial pressure at times.
Speaker B:Sure.
Speaker B:If you navigate it correctly and there's a way to do that.
Speaker B:It's going to be hard to navigate this one, but I do think it can work.
Speaker B:I think it's when you're very values based, you get such a loyal customer base, and I don't think it's always guaranteed to fall apart.
Speaker B:In this case, they're just going to have to navigate from here.
Speaker A:Yeah, I 100 agree.
Speaker A:That's why I asked the question the way that I did, because I wanted to see the nuance to it.
Speaker A:You know, I, Yeah, I don't, I don't think it's, it's, it's, it's, it's like a mutually exclusive thing.
Speaker A:I think you can, you can be a values based retailer and not face the financial pressures, but the thing you have to keep in mind is why do you exist in the, in the first place?
Speaker A:And that, to me, is where, you know, I look at Rei's leadership.
Speaker A:I mean, they've just, I don't.
Speaker A:I.
Speaker A:To me, they just seem like they're screwing things up royally.
Speaker A:And it doesn't surprise me one bit.
Speaker A:You know, this is where I'm going to get really candid, because the c. The current CEO, she flamed out at Athleta really quick.
Speaker A:Like it was, it was a quick tenure and not very successful tenure.
Speaker A:And now, you know, I mean, she's the one in charge now, and now she's playing chicken, essentially with Rei's brand reputation.
Speaker A:That's a big, bold move.
Speaker A:And so I'm with you, Jenna.
Speaker A:I just don't, I don't think playing hardball, which is what it seems like they're doing, is the right way to go for a company like REI in the long run.
Speaker B:Yeah, agreed.
