Hello, everyone. Welcome. We are out here at E-Tail West. This is OmniTalk Retail. I'm Ann Mazinga, and we have a fantastic lineup of interviews from this show all week. So make sure to stay tuned. Before I introduce my next guest standing next to me, I would like to give a big thank you to NetElixir, the AI-powered growth engine behind midsize e-commerce brand growth for 22 years. And NetElixer is helping us bring you all of our coverage for the week. So with that, let me introduce our very first guest. And that is Kristen Shane, Chief Merchandising Officer at REI and longtime friend of the show. Kristen, it's so good to have you. It's so good to be here. I didn't know I was your first. Well, you are the first one. You're kicking it off. I know. I cannot think of a better person to do that with. You've already been on stage this morning. Before we dive into the content part of this. I want you to give a little bit about your background because you've worked for some, you have a very impressive resume. You've worked for some really incredible companies. Tell us a little bit about now what you oversee in your role as a chief merchandising officer at REI. Yeah, well, I started my career a couple of decades ago at Target. I was there for about 11 years. And when you're at Target, as you know, you sort of learn this operational best method, excellence for how you go to market. It's sort of like ingrained in you. And then I left and did an entrepreneurial venture in the Twin Cities. And I really learned, you know, at Target, we put the customer at the center. But what I really learned is like, loyalty is driven by understanding the customer at like an empathetic level. And really thinking about like, not just what you're trying to do for them, but like how you solve problems for them. And when you're in an entrepreneurial venture, you're like nose to nose with the customer. So that was really interesting. And then I was the chief merchandising officer at PetSmart and Guitar Center. And like operational excellence and the like empathetic customer approach kind of come together in specialty retail in a really unique way. So today I'm the chief merchandising officer at REI. I oversee the merchant team, the planning team, the co-op brand team. So about 15% of our sales come from the REI brand. Yes, right. And then I also have visual merchandising and an operations team. So, okay, I have to find out what it was when you got the call from REI. What was it that you were like, yes, I need to explore this as an opportunity? Yeah. Well, as a merchant, most of my career, I'm obsessed with this relationship with the customer. And really, like, as a merchant, understanding how we create, how we like inspire wonder for the customer. And so when I look at REI, we believe that a life outside is a life well lived. And I believe a life outside is a life so like very much aligns with my values. And so that sort of relationship with the customer that REI has, in my view, is really unique. And the value system that REI has created, whether it's It's, you know, this idea that we believe everybody should have access to public lands and we're willing to engage in the fight to protect them. This idea of like really building a business around sustainability. Like there are a lot of retailers and brands that have like sustainability initiatives. Yes. But at REI, no, it's like everything we do is going to be in support of sustainability. So those things really drew me in and how it comes to life for the customer is just really inspiring to me. Well, I want to touch on something that you talked about, Kristen, which is really this values-based, this purposeful company. I mean, REI definitely comes to mind alongside other brands that, you know, like Patagonia, who prioritize this and their customers, their pursuit to be able to go through and support the outdoors, support organizations, support a company that they share values with. One of the things that you were just talking about on stage that I'd love for you to explain for the audience is this Peak 28 Ascending Together strategy. Yeah What is it Yes Why Peak 28 And what does that look like now for you and your team and the rest of the REI organization Yeah so Peak 28 Ascending Together is our three strategy So I've been at REI now about a year. Okay. And about a year ago, you know, you talked to Mary Beth at NRF, I believe. Yes. So she and I started around the same time. And so we've got this sort of new executive team that's doing a couple of things. We're really listening to customers in a very in-depth way. We're like in their homes, talking to them about what they do outside, doing ethnographies. We're looking at all the data. We're really trying to understand the customer. We're also listening and talking to associates because our green vests know our customers better than anybody. Right, right. And so Peak 28 is really this idea of putting the customer at the center of what we want to do and creating a strategy that allows us to uniquely deliver for them. So it's got three parts. The first part is really about this idea of a service model that allows the customer to get outside in a really meaningful way. Okay, what does that look like? So I told the story on stage. So I go in stores a lot and I tend to not tell them who I am because I really want an authentic experience. I was at a hockey tournament. Yes, we play hockey in Arizona. This is all news to me, but I love it. So my 13-year-old had a hockey tournament in Flagstaff. I wanted to do a trail run that morning. So I went to the Flagstaff REI, and I was like, hey, I'm not from here. I want to do a trail run. And they brought me over to this table. They ripped out a map, and they were like, oh, they knew all the trails. They knew the terrain. They knew the elevation. And then they started to talk about, like, do you have the right gear? Talk to me about your shoes. Do you have the, you know, it's dry here. Do you have the right hydration? And so this idea that our green vests, the coveted green vests, deliver this service experience to customers that they can't get anyplace else because they've lived it. And they're so passionate about it. And so we're thinking about how we curate that service model, both in-store and online, to make sure that it's a unique proposition for REI. So that's the first piece. That's one, yeah. Yes. The second piece is all about the assortment. Okay. So we talk about it in terms of a unique, culturally leading assortment and being really authentic there. So at REI, we definitely want to outfit you for your trail run or your camp expedition or whatever activity you want to do. But it's our jobs as merchants to inspire you to think about what the next excursion or activity might be. So you might be like, okay, I'm a trail runner, but I've never done a backpacking expedition. I want you to come to REI and ask yourself that question. Could I do that? And then talk to a green vest and have them inspire you to do it. So it just puts a different lens on how we build assortments. Yeah. The third piece is really about retail fundamentals. Okay. So, you know, every retailer has their story post-COVID, right? We are not different. We have a post-COVID story. We rode the wave through 2021, 22, because everyone was like, we don't have anything to do. Let's go outside. Yeah. And then there's been a market contraction. And so we really are sitting in a position where we have to invest in retail fundamentals so that we make sure that we service the customer the best way possible. And we'll probably talk about this. The tools have totally changed in the last year. What does that mean? And even just from a merchant's perspective, what does it mean to invest in fundamentals and the tools to support that? It means a couple of things. So from a technology perspective, we are reinvesting in our tech stack for how we allocate inventory. What's interesting about that, though, Anne, is we started that journey in 2023. where we started to talk about what that might look like, what partner we might use. Well, in 2023, we were kind of talking about AI, but not like we are today. And so I think the name of the game now in retail is agility. So we're talking with our partner to say, we still think this is the right solution, but how are we integrating AI in a way that help our teams be really successful and move with speed? So that piece started a couple of years ago, is still important, but I think we have to be agile and how we think about it. The other piece from a fundamental perspective is doing something that we've done in retail for a long time around joint business planning and really thinking about how we partner with our vendors The unique experience for me at REI is our biggest competitors are the vendors we assort in our stores. Like that was not the case. Yeah, right, right. Yeah, that was not the case in a lot of my other jobs. Right. And so the trick here, I mean, if you think about it, like Patagonia is one of our biggest vendors, the North Face, one of our biggest vendors, right? They both have direct-to-consumer strategies. They both have stores. And so the trick is, how do we create a unique proposition for the customer to come to REI that is important for us, but where our vendor can also see, oh, that's an incremental customer for us. And so REI, we want to invest with you to do that. Wow. So it just means that we have to have different conversations with our vendors to make sure we service the customer in a different way. So I'm curious then, you know, that's one thing that I had not really considered until you said that. But it explains a lot, and especially how we're seeing companies like JD Sports and, you know, other large mass retailers who are working with their vendor partners. But they have the same situation. Like Nike sells direct, obviously. And so how are you going to figure that out? I'm wondering, though, internally, Kristen, you talked about, you know, embracing AI and new technology. You talked about this assortment that's going to be, you know, unique. Like, how do I, as the merchant for this, you know, category of running shoes, how do I get you to start thinking backpacking? Right. What's happening with the culture inside REI, inside your internal culture, to support not only cross-merchandising categories and activities, but also, like, as you invest in technology and you start to work maybe with teams that you were siloed from before? Right, yes. How is that? Explain that for the audience. Yeah, I mean, that is the right question. That is like the question. Like underpinning Peak 28 is this idea of investing in our culture. And we talk about it in three ways. We talk about it as connected, focused, and trailblazing. Connected is first for a reason. Retail is a team sport. We have to solve problems together and really break down the silos so that we can move with speed. Yes. And so we can't just say we want to be connected. We have to create the conditions as leaders to make sure people are connected. So two weeks ago, we brought the team all together at our headquarters in Washington. And we had what we called campfire circles, of course, aptly named. On brand. Yeah, totally on brand. Perfect. Where we talked about these were leaders, so these were directors up. and we had really vulnerable, candid conversations on how we're trying to solve some of the problems that you outlined together and where we're having struggles and getting the teams to really talk through that. So this idea of connected is really important. Focused is really critical. Focused is about what are we saying no to? Because to your point, there is so much going on. There's so much out there. There's so much changing in the macro environment. it's very easy to sort of sit there and be like, we have to address this. We have to address this. We have to think about that. So focused is like as a team getting really focused on what matters most to the customer. Yep. And having your teams feel like they can surface things that are too much. Yes. That they don't think they should be focused on. So that's the second piece. And then trailblazing I think is critical because, you know, in our career, nothing has moved as fast as AI. And nobody has figured it out. Like, let's be clear. We're all investing. We're all trying to figure it out. None of us know what the answer is. And so we have to be okay with failure. We have to be okay with experimentation. And so at REI, we call that trailblazing, of course. So connected, focused, and trailblazing, we believe, are the right ingredients to create a culture and create the conditions for the team to be successful in this kind of environment. So I have to ask one deeper question just as far as you have a lot of both partners in the store coming together with ideas, the vendor partners that you work with. But then also in terms of technology partners Kristen like we hear from a lot of people that we work with It like oh this is a great technology to invest in because it help merchants It help store operations And AI being a major part of that But when you are sitting in that campfire circle and you're trying to determine what should we focus on, what should we invest in? Is there a rubric you're going off of? Or what's even just the process of I've talked to this tech company. I think this could be helpful. Then what? What happens? Yeah. So relative to AI, I love this question. So we're trying to sort of approach it from two angles. So our chief people officer and our chief technology officer are the ones that are shepherding the AI conversation. I don't know a lot of companies are setting the chief people officer up in that position. No, I've not heard that at all. And the reason we're doing that is because we believe AI is going to power our workforce, not be necessarily a solution for something else. And so having the chief people officer at the table to really help us think about how AI helps people I think is critically important. The second thing we're doing, you know, we're located in Seattle. The executive team spent a day at Microsoft. and we're really trying to understand how we create the conditions for our teams to experiment. So everybody is using CoPilot. Literally, like as we're talking right now, there is a training at REI for the whole workforce on how to build agents. So like we're trying to have the, instead of telling the teams as a leader perspective, here is the solution. Right. We're trying to put the tool in the hands of the teams and have the teams tell us where they're finding efficiencies and what works for them. Right. Because we're at the beginning of this journey. And I think having a team feeling like they're bought in and they understand it and they're part of the solution is really important. That makes sense. And I think relying on those partners to help you figure out how to navigate it, too. Microsoft is the expert in that area, so they should be the one helping you understand how to utilize it and roll it out so that your teams can use that effectively. That makes sense. Okay, well, let's finish with what we can expect in 2026 from REI. I'm very excited as a customer and member, but what should our audience be excited to see from you and the team, Kristen? Yeah, I think, I mean, as the chief merchant, I would be remiss if I didn't talk about like the amazing product that you're going to see. I'm just, we have an incredibly talented team and I'm so excited about what's coming. You're going to see a lot of really exciting, unique partnerships. Ooh, okay. Come check us out. Okay. You're going to see a lot of newness and excitement around helping people think about, you know, I talked on stage about one of our activities we assort to is camp. and you can think about all the basic necessities you need for camp. Yes. But we're also going to build an assortment around this idea of crafting the campsite. So like you want, you know, your French press coffee and your pancakes and your like boozy brunch. So this is glamping. You're going to make glamping possible for me. Yes, because I want when you come to buy your pair of shoes, you to be like, maybe we do need to do a camping trip. That's a category of the store that I don't go in often, Kristen, because I'm not a camper. We're going to get you there, Anne. But if this is a possibility. If you could have press at the tent is a way to get me going. Yes. Okay. Yeah, so we're just really excited about the assortment and excited about creating opportunities for our consumer to really be – they're already inspired by being outside. But what our consumer loves is this idea of progression. So, like, helping them think through, like, what the next thing is for them to do is really exciting. and you're going to see us also like experiment with technology to make your shopping journey easier online. So look for that. And, and, you know, you're going to see that I think in the industry all up. So really looking for that at REI. And what I love about our customer base is, you know, they will hold us accountable to make sure that any solution that we deliver is in line with our values and in line with what they expect from us. So it'll be a fun journey. Well, Kristen, thank you so much for making time for this. We really appreciate it. I know the audience does too. Thank you again to NetElixer for helping us bring you all of our coverage here at E-Tail West 2026. And until the next interview, stay tuned.
