Welcome to the the Ivey HBA Retail Marketing Management blog. Retail marketing is an exciting, dynamic, important, and very visible aspect of the overall field of marketing. Throughout the year, students will be posting comments regarding contemporary retailing issues. Although this is intended to be used by Bus 4411 students, industry marketing professionals are also invited to join in if they like.

Saturday, February 7, 2009

The Green Cycle at Mountain Equipment Co-op

In response to: Mountain Equipment Co-op Ontario(TM) stores are now bullfrogpowered(TM), sourced from: http://www.newswire.ca/en/releases/archive/January2009/26/c2170.html

By: Joanna Reardon

Canada’s leading outdoor gear and clothing retailer is staying true to their roots. Mountain equipment Co-op (MEC) has long been a company focused on sustainable retailing – “We’re driven by passion, not profit. We continue to look for ways to protect
our wild spaces and reduce the ecological footprint of our business.” Their efforts over the past 2 years, as outlined in their Accountability Report, include donating 1% of all sales to support Canadian environmental causes, manufacturing products with more eco-friendly processes, reducing emissions from transit by lessening shipments and even promoting greener commuting among employees, and ‘greening their operations’ . The NewsWire article I came across reveals yet another step MEC has taken to reinforce their commitment to the environment. They’ve re-vamped their Ontario retail locations to be in line with their Western counterparts by adopting Bullfrog Power - Canada's only 100% green electricity provider. MEC stores are now completely powered by clean, renewable energy sources like wind and low-impact waterpower. So what does this all mean to their success as a retailer? Why, in economic times as uncertain as these would they invest in ‘greening their operations’?

Growing up ‘Granola’, I can certainly appreciate all that MEC is doing for me as a consumer and for the environment. Then I thought about the average MEC member and realized the proposition could not be better suited to us. Whether or not the Co-op is driven by profits, they’re doing something right. Sales in 2008 were higher than in 2007. Allow me to explain.

A MEC store is an outdoor-person’s Mecca. With a rock-climbing wall positioned prominently in the centre of the store and outdoor ‘toys’ of all kinds surrounding it, there’s a certain je-ne-sais-quoi when you enter the store. There’s no question that their RVP is experience and selection. So how does their newest sustainability initiative reinforce this RVP? The calm lighting and buzz-free power create an experience to mimic the tranquil setting of the outdoors. Customers’ experience is also one of empowerment by feeling as though they’re helping the environment by shopping at MEC. In addition, the product selection is augmented through eco-friendly design. The introduction of a new line identified with a Product Sustainability Symbol signals products to shoppers that are made with organic fibres, through cleaner processes. These products compliment MEC’s assortment while ultimately enforcing the customer’s ‘green’ experience.

Next, consider the fact that MEC is a private label. There is, as we discovered, an upside and a downside to this; however, it seems that MEC is reaping all the upside benefits. Customer loyalty is massive for this outdoor retailer. Because it is a Co-op, shoppers must be members in order to purchase at MEC. Not only is MEC offering a quality brand not available elsewhere, they’re inviting you into their exclusive club in order to shop. Higher margins are also a big plus – not only are they reflected in the overall profits, they allow dollars to be put into sustainability initiatives.

It's all a perfect little green cycle: customer loyalty and higher margins lead to additional profits, which are then translated to greater sustainability initiatives, which in turn lead to a better experience and selection for the customer, ultimately reinforcing customer satisfaction and loyalty. MEC is obviously positioned perfectly in the market to make the cycle work. While it may not be as obvious for other retailers, the benefits of being a sustainable company are real; and I as a consumer would love to see MEC’s practices mimicked across the industry and beyond.

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