AMAZON, REI GO EAST

Byline: Valerie Seckler

NEW YORK — Two high-profile U.S. merchants, Amazon.com and Recreational Equipment Inc., said Thursday they are implementing new online initiatives in Japan.
REI, the $650 million retailer of outdoor apparel and gear, is expanding its e-commerce effort in Japan, in a move to fully leverage its assets as a multichannel retailer there, while Amazon.com is firming up plans to open online in Japan, a premiere that could come during the first half of November.
Earlier this year, some of Amazon.com’s suppliers said the Internet giant was likely to mount a Web site in Japan during 2000, and last Thursday, Amazon.com sent Japan’s media invitations to a company press conference, slated to be held in Tokyo on Nov. 1, sparking speculation that a launch is imminent.
The foundation for REI’s new push is its just-opened contracted distribution center in Yokohama, a state-of-the-art facility that enables it to slash delivery time on e-tail orders by fulfilling those transactions locally. Now, REI anticipates delivering online orders in Japan within two to seven days after they’ve been placed, compared with the window of at least two weeks that was required when its orders were shipped from the U.S.
Fax and phone orders in Japan also are being delivered by REI in-country and its customers can now return products locally via mail or at the Tokyo flagship store.
Further, the Japan-based distribution platform has prompted REI to scale up its e-tail assortment on REI.co.jp, expanding the Web site’s offer to 3,000 items, which can also be found at the Tokyo store. Since it went live online in Japan in June 1999, REI.co.jp has seen its sales grow roughly 20 percent a month, while the number of people using the Web site has increased nearly fivefold, according to Matt Hyde, vice president of online sales at Seattle-based REI.
“We’ve taken our clicks-and-bricks strategy in Japan to the next level,” Hyde noted. “It’s part of our strategic direction for international growth. Step one was to launch an international and fully-translated site. Step two is to offer local [delivery] service, so we can better serve the Japanese market. Having established in-country fulfillment,” he added, “we were able to incorporate yen pricing into our Japanese online store, and put Internet kiosks in the REI Tokyo store.”
So far, Hyde said, apparel has “done well” online in Japan, with robust sales under both the REI label and nonstore brands such as Patagonia and Grammici.
REI expects the Web site in Japan to become profitable like its domestic counterpart, which put black ink on the bottom line for 1999 and 1998, Hyde said.
In addition to e-commerce, REI’s Web site in Japan offers local community resources and bulletin boards, online clinics and Gearmail, a free, opt-in e-mail service that delivers information about products, special sale offers and outdoor activities as well as the company’s adventure travel service.
The company’s online division also operates U.S.-based REI-Outlet.com as well as its full-price Web site, REI.com, whose offer comprises 78,000 items and 45,000 pages of product information, plus expert advice on outdoor gear, online clinics and an adventure travel service.
REI’s Tokyo flagship unit — its first retail store outside the U.S. — opened this April, featuring the interactive elements typically found at its brick-and-mortar units, like a mountain bike test trail and a climbing pinnacle. The company has been serving Japanese customers via its mail-order business for more than a decade, building a database of more than 80,000 members.
“We’ve seen the advantages of a multichannel approach domestically, and we’ve extended this to Japan,” stated Brian Unmacht, REI’s vice president of international. “Our customers have the option to shop with us in whatever way is convenient for them, whether it is online, in the store or over the phone. We’ll continue to look for ways to better serve our customers as we grow our business in Japan.”
REI, established in 1938 by a group of 23 Pacific Northwest mountaineers seeking climbing gear, has grown into a consumer cooperative with more than 1.7 million active members and sales of about $650 million in 1999. In addition to its Web sites and Tokyo store, it operates 59 retail stores in 24 states and REI Adventures, the adventure travel company.

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