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Jina Chan

REI.COM

PDM 02

THE PRODUCT

THE PRODUCT

NOTHING PERSONAL… ‣ Problem: The REI.com site is not personalized, making it hard to navigate.

‣ Market: REI customers with goals ‣ Planning for an event ‣  Including kids or elderly family members

‣ Solution: Redesign the site around common goals/needs.

PDM 03

CUSTOMER DEVELOPMENT


TARGET: OUTDOOR ENTHUSIASTS …who are pressed for time or located far from a physical store.

WHERE SIGHTED ! REI store - for customers who shop both online and in the store ! Outdoor recreation forums - the craigslist Outdoors forum and a Facebook group for ecological restoration ! Outdoor recreation spots - a popular climbing spot or crowded hiking/cycling trail


CUSTOMER INTERVIEW Q’S ! What kinds of outdoor recreation do you do? ! If you have goals (like a particular hike or race), what are they? [This question was added later; I did not ask it of the intercepts.] ! Where do you find information on things like trails, routes, and technical skills?

! What are your experiences with online shopping for outdoor equipment? ! How do you feel about the REI.com website? ! What kinds of things would be most important for you on the REI.com website?

! Is there anything else you’d like to tell me about REI, online shopping, or outdoor gear?


GET OUT OF THE BUILDING! I was able to interview 8 people. ! Kinds of recreation: hiking (5), skiing (3) ! Info: Internet search (3), specific websites (3), REI (1) ! Online shopping: Need to see/feel first

! REI website: “decent”, “okay – not fabulous”, “good” ! Specific features:

!  Nested categories

!  Comparing specs

!  Reviews – back button twice

PDM 04

TESTING AND VALIDATING YOUR IDEA


CREATE AN EXPERIMENT ‣ Problem: Customers want to buy something or find information but are

hampered by current design ‣ Customer: Outdoor enthusiast too busy or too far away to visit store ‣ Riskiest assumption: Greater personalization will increase customer

engagement and sales ‣ How to test (ideally): Do A/B testing with a small area of the REI website

(Personalized vs. Non) ‣ What to measure: time spent on site, amount spent per visit

PDM 05

BUSINESS MODEL DESIGN

BUSINESS MODEL DESIGN

KEY PARTNERS:

Suppliers and

Manufacturers

Logistics Partners

Class Instructors

Tour Operators

KEY ACTIVITIES:

Software Dev

Merchandising

Fulfillment

VALUE

PROPOSITIONS:

Quality

Convenience

Co-Op

Customer Service

Expertise

CUSTOMER

RELATIONSHIPS:

Self-Service

Customer Service

Community

(Personalization)

CUSTOMER

SEGMENTS:

Niche Market –

Outdoor Enthusiasts

KEY RESOURCES:

Fulfillment Center

Software Engr

CHANNELS:

REI.com

Mobile App

In-Store Pick-Up

COST STRUCTURE:

Technology Infrastructure

Fulfillment Infrastructure

Customer Service

Marketing – value-driven

REVENUE STREAMS:

Retails Sales of Goods

Classes

Vacation Packages

PDM 06

MARKET RESEARCH

MARKET RESEARCH

STRENGTHS:

Experience: in business since 1938

Customer service

Quality

Positive perception as a co-op

Physical stores supplement e-commerce

Strong customer base

WEAKNESSES:

Mobile app is slow

Website is hard to navigate

OPPORTUNITIES:

Leverage existing customer service into Zappos exp.

Partnership w/ other outdoor-gear companies

Promote REI-outlet.com discount merchandise

THREATS:

Amazon

Campmor

EMS

Cabela’s

Perception that online goods should be cheaper

MARKET RESEARCH

Market Size: Population of the US (316M) * Percentage of adults (1-0.23)

= 243M adults in US * Participation rate (0.49)

= 119M American adults who participate in outdoor recreation + Canadians who participate in sports (7M)

= 126M customers

Total Addressable Market: 126M * Avg expenditure on gear ($1,000) = $126B/yr

Segmented Addressable Market: $126B/yr * [ High-income consumers (40,451) / Total consumers (125,670) ] = $40B/yr

Share Of Market: $40B/yr * Market share (0.30) * Percentage of online sales (0.25) = $3B/yr

MARKET RESEARCH

Market Size: Population of the US (316M) * Percentage of adults (1-0.23)

= 243M adults in US * Participation rate (0.49)

= 119M American adults who participate in outdoor recreation + Canadians who participate in sports (7M)

= 126M customers

TAM: 126M * Avg expenditure on gear ($1,000) = $126B/yr

SAM: High-income consumers (40,451) / Total consumers (125,670) = $40B/yr

SOM: $40B/yr * Market share (0.30) * Percentage of online sales (0.25) = $3B/yr

Sanity Checking:

Actual SOM: 2013 sales of $2B*0.25 = $500M

Actual TAM: $646B/yr ($120B product sales + $524B travel)

PDM 07

PERSONAS AND EMPATHY MAPS


USER PERSONA

25-40 Working professional Even split male/female

Hiking Skiing

Gets info from Google, orgs like WTA, or coworkers

Needs to see/touch gear before buying it – “especially at REI prices”


25-40 Working professional Even split male/female

Hiking Skiing

Gets info from Google, orgs like WTA, or coworkers

Needs to see/touch gear before buying it – “especially at REI prices”


Wants to get the right equipment (higher priority than cost)

Internet WTA Ski club Coworkers

What others use/wear Internet retailers

Hiking Skiing

Value/cost; time to go to p-store Enjoyment; health

PDM 08

FEATURES AND USER STORIES

FEATURES AND USER STORIES User Story

1. As a parent, I need to find trails so I can go hiking/bicycling with my kids

1. Personalized recommendations of trails

3. Map of trails 4. Directions to trails & info about parking/transit

2. Sortable matrix of trail length, difficulty, elevation change, type

2. As a parent, I need to learn about outdoor sports so I can do them with my kids

3. Personalized recommendations of classes

2. Personalized list of articles and videos

1. Q&A feature

4. As a parent, I need to find travel packages so I can take my kids on adventure travel

1. Personalized recommendations of travel packages

2. Sortable matrix of trip information (e.g., “rafting class II rivers”)

3. Easy gear list: adds all recommended gear to shopping cart

5. As a disabled person, I need to find travel packages so I can go on adventure travel

1. Personalized recommendations of travel packages

2. Sortable matrix of trip information

3. Easy gear list 4. Additional gear list with adaptive equipment for disability

3. As a disabled person, I need to find trails so I can go hiking/bicycling

1. Personalized recommendations of trails

3. Map of trails 4. Directions to trails & info about parking/transit

2. Sortable matrix of trail length, difficulty, etc.

PDM 09

WIREFRAMES AND STORYBOARDS


Consolidated Pages


Gear List


Customized Email:

1) My Interests or Goals

2) Product Recommendations

PDM 11

METRICS

METRICS

METRICS USING: Email open rate (retention) Time since last visit (retention) Social media mentions (referrals) Sales of featured gear or trips (revenue) Money spent per user (revenue) Time to transaction (revenue)

The One Metric That Matters: Sales of featured gear or trips (revenue)

PDM 12

PRICING AND FINANCIAL MODELING


FINANCIAL MODEL Expected Case REI total sales ($2 billion) x Percentage that are online

sales (25%) x 7.8% increase = $39 million increase in sales

Best Case $2 billion x 25% x 25% = $125 million increase in sales Worst Case $2 billion x 25% x 4% = ($20 million) decrease in sales

PRICE PLAN No price: the goal is to increase customer engagement and lowers barriers to sales, and charging them for personalization would create a barrier.


COST TO COMPANY

PDM 15

PRODUCT ROADMAP

PRODUCT ROADMAP

Theme Month 1 Month 2 Month 3 Month 4 Month 5 Month 6

Marketing Customized emails

Development

Recommendation engine

User profiles

Content Consolidated pages

Gear lists

Travel info

Trail info

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