Every so often, I’ll catch a story on NPR that really intrigues me. Yesterday, it was the story featured on Morning Edition: “What Happens When Stores Let Customers Return Whatever they Want?” The story looked at how two iconic purveyors of outdoor gear: L.L. Bean and REI, both with similar return policies, had found success on one hand and trouble on the other, ultimately leading REI to change its long-standing return policy, while L.L. Bean kept its intact.
The story made me ponder why the same return policy could work so beautifully for L.L. Bean for decades, but be so abused by REI customers. Why did REI customers take advantage and make fools of the policy on social media? Why didn’t the L.L. Bean customers do this? What role did the brand of each company play in their customers’ behavior?
REI – A brand built on risk and adventure
Recreational Equipment, Inc. began as and remains a consumer cooperative. This means that as a “member” of the co-op (a title you earn by purchasing a $20 lifetime membership) you receive a portion of their profits each year based on a percentage of your eligible purchases. So, if you buy a bunch of gear, you usually get about 10 percent back in the form of a dividend check. The return policy, which allowed returns forever, for any reason, seemed to fit right in with the idea of a co-operative company. That is until you look at the company’s parents…
According to the company’s website, REI “began as a group of 23 mountain climbing buddies…” in 1938. If you’ve ever known a person who is intensely interested in a sport like mountain climbing, you know it takes a very particular personality type to risk life and limb for the love of the great outdoors.
The REI brand was born of young, thrill-seeking daredevils. It’s about teched-out equipment and going “where no man belongs has gone before.”
L.L. Bean – A brand built of New England practicality
A quick Wikipedia search on Leon Leonwood Bean, founder of L.L. Bean, paints a picture of Yankee ingenuity and incredible persistence. Bean was born in Maine, was orphaned at a young age and received very little formal education. What schooling he did receive, he paid for himself through the fruits of his own labors.
As an avid hunter and fisherman, Bean was troubled by the problem of wet boots. To solve this, he developed the original Maine Hunting Boot and sold them to a list of non-resident, Maine hunting license holders with a 100% money-back guarantee. He had to refund 90% of the profits on his first set of boots because the rubber cracked. The rest is history, and we all know those iconic boots have become one of the company’s champion items.
The L.L. Bean brand was born of Yankee ingenuity and is about old-fashioned, New England pragmatism … and flannel-lined jeans.
So what happened?
The same return policy worked for one customer base, and not for another. Why? It’s about the brand.
REI offers an ideal. One customer interviewed for the Seattle Business Journal said: “I go to REI and I feel like an outdoor woman,” … though she notes she really isn’t inclined that way. They also offer membership in a “club.” For a mere $20 lifetime investment, customers can enter an elite fraternity of true outdoor adventurists. At the flagship store, patrons ride a mountain bike over obstacles, and can even try their hand at rock climbing. They’re hard-core. At least for one afternoon.
The REI brand ideal isn’t sustainable for most. It’s cold on the mountain. And the game is on. The experience with the brand is exciting and fun while it lasts, but doesn’t create true loyalists. Rather, it leaves people with an adventure hangover after coming to the realization that they’re too old / out of shape / scared / practical to hang from a rock cliff, in real life, by a finger and a rope. This creates a disconnect between the consumer and the brand. It allows customers to feel justified in returning items to the “club” they never really felt a part of. They don’t feel guilty back-stabbing it online, calling it “Rental Equipment, Incorporated” or “Rent Every Item” in chat-rooms because in some way, they feel let down by a brand ideal they couldn’t live up to.
But at L.L. Bean, the brand experience is different. First, most of the shopping at L.L. Bean is happening online or through a catalog, so there’s no “buff with just-the-right-amount-of-granola, expert” at the store making you feel that even you can climb Mt. Everest with the right set of crampons and a good sherpa.
When you shop at L.L. Bean, you feel like the archetypal New England pragmatist. You’ve just purchased for yourself/your kid/your mom a pair of really warm flannel jammies in a tartan plaid, that they’ll wear until they die/outgrow them. And now, since you’ve got these [too] warm pajamas, you can wear them while you slip on your Camp Moccasins, grab your black lab, and go get the firewood from your snow-covered porch.
Even at the flagship store in Freeport, where brightly colored kayaks hang from the ceiling and everything’s got a pine cone and/or a bear on it, the feeling is all a part of what you paid for on your trip to Vacationland … it’s adventure, lite. And it’s perfectly attainable.
When you buy your backpack or pajamas from L.L. Bean, you’re buying from a brand that’s less aspirational, and more relatable, even if it isn’t your day-to-day reality. The “personality” of Leon Leonwood Bean is illustrated in what feels like an exceedingly honest, old-fashioned, character-driven organization. So, it’s harder to trash Mr. Bean’s company in an online chatroom… because his brand is not setting customers up to fail from the get-go.
So what’s the lesson here?
It’s obvious: Brand is the center of the corporate universe!
But seriously, in the case of these two companies, brand has shaped not only the way customers behaved during their purchase, but also afterwards, and it has ultimately shaped company policy.
REI’s brand kept a lot of customers at arm’s length. By having a brand that created the picture of a lifestyle out of reach for most, it failed to connect with customers. Since the customers didn’t really feel that sense of loyalty to REI that comes with a strong brand connection, they behaved negatively: poking fun at the return policy and ultimately taking advantage of it in such a way that REI’s profits were harmed and the policy had to change.
L.L. Bean, on the other hand, can take an extreme case of return “abuse,” like the woman who has been returning her backpack for nearly two decades, and turn it into a story of brand loyalty and enthusiasm. After all, she does keep coming back for another L.L. Bean backpack, not a gift card for something else. She does this because she loves L.L. Bean. And the backpack she’s had since junior high, it’s the same backpack she wants to have forever. That kind of loyalty speaks volumes to the power of a well-developed brand.