REI made a rather stunning announcement today. The firm will be closing all of its stores on Black Friday, the biggest shopping day of the year. Instead, it will pay its employees to explore and enjoy the outdoors on that day, and it will encourage its customers to do the same. The company has launched a social media campaign in conjunction with their unique Black Friday strategy. They have adopted the hashtag "OptOutside" and encouraged people to share their ideas and experiences for enjoying the outdoors on Black Friday. Jerry Stritzke, president and CEO of REI, explained the company's reasoning: “Black Friday is the
perfect time to remind ourselves of the essential truth that life is
richer, more connected and complete when you choose to spend it outside.
We’re closing our doors, paying our employees to get out there, and
inviting America to OptOutside with us because we love great gear, but
we are even more passionate about the experiences it unlocks.”
I love the idea! I've always felt that the Black Friday phenomenon had become a sort of Prisoner's Dilemma for firms. Each company opened earlier to keep up with or one up the competition. Some firms even began opening on Thanksgiving itself. Promotions became even crazier with each passing year. Yet, such moves often only shifted sales from other days. They did not add to total holiday spending necessarily. Thus, firms incurred more costs without actually improving revenues overall. No firm wanted to opt out of this arms race though, for fear of the damage they would suffer if they didn't keep up with the competition. Now, we have seen one firm choose to opt out of the arms race. Great firms zig whenever everyone else zags. They find a way to differentiate. For REI, the move fits beautifully with their brand image and their values. It reinforces all that we believe about REI's brand, culture, and beliefs. It helps them stand out from the competition. The key question: Will other firms follow? I doubt it that many will follow. Actually, simply copying REI's strategy does not make much sense anyway. Being different is the key to building a great strategy. Other firms may want to adapt their Black Friday strategy to avoid the arms race that I describe above, but they will have to find their own unique way of doing so.
2 comments:
I really like this move by REI. Admittedly, I was initially shocked and surprised by it, but the more I thought about it the more sense it makes. This move promotes and strengthens the culture that surrounds the organization as a one dedicated to getting outdoors and spending less time caught up in the commercialization of holidays. Additionally, at the post mentions, the move to close on Black Friday is such a bold move that it instantly created buzz around the company and differentiated it from competitors. They may lose sales on Black Friday, but I would be certain that they gain additional consumers to add to their customer base due to the nature of the move as well as the additional exposure from the headline story.
This is positive news, but I'm not sure it's a smart move. It's like CVS dropping cigarettes. Yes, it's positive news, but bad for stocks. I wonder what you think about Walgreens Boots Alliance acquiring Rite Aid. I wonder about duplication that will inevitably increase unemployment and store closures. There are antitrust concerns as well. The stock looks like a rollercoaster.
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