REI’s secrets to sustaining a beloved brand

Note: Transcripts are automatically generated from episode audio, and are not fully corrected for spelling, grammar, and formatting.

MARY BETH LAUGHTON: The biggest thing at stake, I think, is making sure we can be around for another 88 years. How do we create a long-term, sustainable co-op that is healthy, that continues to leverage our strength and our heritage, and doesn’t lose sight of our mission and values? It is a tricky equation, but what’s so amazing about REI is the passion of the people, and that gives me faith that we will get to that really healthy place again and do so much good for the world as well.

BOB SAFIAN: That’s Mary Beth Laughton, CEO of iconic outdoor goods retailer REI. MB, as she’s known, came over from Nike in early 2025, tasked with reviving a business plagued by post-pandemic losses and internal discontent. MB talks with me about her priorities in righting the ship, including REI’s unusual structure as a cooperative tasked with serving members rather than shareholders. She also talks about steps she’s taken to publicly distance REI from the Trump White House and lessons she’s applying from her previous executive roles at Nike, Athleta and Sephora. So let’s get to it. I’m Bob Safian, and this is Rapid Response.

[THEME MUSIC]

I’m here with Mary Beth Laughton, president and CEO of REI. MB, welcome to the show.

LAUGHTON: Thanks, Bob. It’s great to be here.

SAFIAN: I was in SoHo, in Manhattan, just a few days ago, and I walked past where the REI store used to be. It was kind of sad not to see it there.

LAUGHTON: Yeah.

SAFIAN: I’d heard that there was a symbolic funeral ceremony for the store?

LAUGHTON: Yeah. People put Post-it notes on the windows. I think there was just a lot of love for that store, but obviously for REI overall. I think a lot of people liked the bathrooms in that store, I heard.

SAFIAN: The bathrooms are very important in a New York City location.

LAUGHTON: Very important.

SAFIAN: Clean bathrooms, yes.

LAUGHTON: That’s right. That was a great store.

Copy LinkWho REI serves in the modern outdoors

SAFIAN: REI is a company built around getting people into the outdoors. Are you an outdoorsy person yourself? Have you always been?

LAUGHTON: Oh, yes, very much so. Since I was a little kid just running around the neighborhood, being outside has always been something that’s really freeing for me and centers and grounds me. I just feel really myself when I’m outside. These days, I spend a lot of time hiking. Living in the Pacific Northwest is great for that.

SAFIAN: I was a city kid. I grew up in New York, and I’ve lived here my whole life. I like to be outside, but my time in the great outdoors these days is largely near my Brooklyn apartment in Prospect Park. Do folks like me stack up against true outdoorsmen and women as customers?

LAUGHTON: Oh, for sure. We welcome everybody who loves the outdoors. We want to be part of your outdoor life, whether you’re climbing a fourteener or you’re at your local urban park, right?

SAFIAN: Climbing a fourteener. This is not an expression I’m used to. Are you a climber?

LAUGHTON: No, but I appreciate people who are.

SAFIAN: These days, being in nature is, in a lot of ways, more important than ever in a world of screens and tech.

LAUGHTON: We’ve actually partnered with some different organizations on health studies of the outdoors, and what we found is that even 20 minutes outside a day can really help center people and give them mental and physical health benefits. It’s really important that people find some time to just get outside when they can.

Copy LinkTurning outdoor access into a clear mission

SAFIAN: You came over to REI from Nike.

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LAUGHTON: Yeah.

SAFIAN: The mission is around sport, and I know: If you’ve got a body, you’re an athlete.

LAUGHTON: That’s right.

SAFIAN: That’s part of their reputation there. It’s not about the product, but what we do with it. Does REI have an analogous mission or approach?

LAUGHTON: We definitely are trying to connect people to the power of the outdoors. That is our mission. We want to help you get geared up for that. And what’s so great about REI is our green vests, if you’ve been in our stores.

SAFIAN: Green vests are your employees. They’re wearing green vests.

LAUGHTON: They are wearing green vests. I wear mine, too, when I go into stores sometimes. They’re one of the most special aspects of the co-op, and they really do want to help people find the gear they’re looking for, whatever the activity and whatever your circumstances are. It’s part of our secret sauce.

SAFIAN: You came over as CEO about a year and a half ago.

LAUGHTON: Yeah.

SAFIAN: It’s kind of a turbulent moment for retailers all across the board: tariffs, union pressure. What was your focus? Did you know what you wanted to change? Has that shifted at all in the time you’ve been there?

LAUGHTON: I definitely came in during a very turbulent time, and I think I would’ve done this anyway, but it put even more emphasis, for me, on the need to listen and learn at the beginning and really get a grasp of what was going on in the company, in the broader macro environment, with our employees, in our stores across the country, and with our vendor partners. Then I really worked with the team within my first six months to craft a strategic plan called Peak 28.

Copy LinkFixing retail fundamentals for long-term health

SAFIAN: Did you feel like the business was solid? Was it stable? Were there things that were like, “This part of the business has got to change”?

LAUGHTON: No. There were clear opportunity areas. The co-op certainly had a lot of things going for it, and it does today, but I also saw things like member engagement starting to show signs that we needed to turn in a different direction. Profitability-wise, the co-op hadn’t been in a great place for a few years. And then there were a bunch of retail fundamentals that I came in, as someone who’s been at different retailers, and was really able to narrow in on where we needed to make some changes.

SAFIAN: You’ve mentioned the co-op a couple of times. REI has an unconventional structure. It’s the largest consumer co-op in the US.

LAUGHTON: For sure.

SAFIAN: Twenty-six million members. So how does it work?

LAUGHTON: It is a very unique structure, and I think people interpret it a lot of different ways. But at the highest level, we don’t have any shareholders. We’re a private company, so we really rely on creating our own profit and our own cash flow, and we’ve got to be a profitable business and have a strong and healthy business for the model to work.

SAFIAN: How does that impact your priorities? Does that free you from the short-term pressures that publicly traded companies have, or is it still there, just in a different wrapper?

LAUGHTON: It’s still there, but I would say not to the same extent. We’re not doing quarterly earnings calls. The board and I are very aligned on making sure we’re setting the co-op up for sustainable long-term growth, and it’s nice to be able to make some decisions in that regard. It is important that we are creating profit and driving cash flow. We still have to maintain success and health as a business because —

SAFIAN: You’re not a nonprofit, right?

LAUGHTON: We’re not a nonprofit.

SAFIAN: You’re still supposed to grow and make money.

LAUGHTON: For sure. We have to make money, and the way we think about it is: The more profit we generate, the more we can put toward our purpose. So it’s really important, and kind of a great challenge, to make sure that we’re doing both, and they really feed on each other. I’d say the other unique thing is we really are oriented toward our members and their needs, and so we spend a lot of time on how we can create really great experiences and benefits for our members because, even if they’re not equity owners, they are part of the co-op and really important to what we do.

SAFIAN: And the co-op members, do they pay a membership fee, like my Costco membership?

LAUGHTON: It’s a little different. They pay a $30 fee for a lifetime membership, and so we’re constantly thinking about what we can help enable for our members so they feel like that was a great investment. That includes access to things like classes in our stores. It includes extra benefits, like we just launched a partnership with AllTrails, and it’s going to allow our members to have discounted access to that program.

SAFIAN: And when the business makes money, does it go back to the members?

LAUGHTON: Part of being a member is getting a 10% dividend on your purchases, so that goes back to our members every year, and it’s a major benefit.

SAFIAN: So they’re getting the proceeds of the success of the business.

LAUGHTON: That’s right. They’re not technically shareholders, but they do have such a vested interest. They hold us to a really high bar.

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Copy LinkHow the co-op model shapes every decision

SAFIAN: REI has values around community, sustainability and conservation.

LAUGHTON: Yes.

SAFIAN: Recently, we’ve seen cuts to national park staff and government proposals for selling public lands. You may not want to be political, but customers, employees and members may expect you to advocate for REI’s values. How do you think about that? Because that is a challenge for a lot of business leaders right now.

LAUGHTON: What I love about REI is we have such strong values and a clear mission, and we do use them to guide us. Sometimes that’s more overt things we’re doing, like giving money to certain organizations, but sometimes it’s more of the behind-the-scenes things we’re doing, like working with policymakers or through our cooperative action network. We actually get people to write letters to policymakers and to the government. We’re doing things like that constantly to support things like public lands that are so core to who we are and what we care about.

SAFIAN: A lot of business leaders right now are cautious about engaging on topics that might attract attention from the White House, let’s say.

LAUGHTON: I understand that, and we certainly have to navigate that, but at the end of the day, we are a mission-driven organization that is going to stand up for the things we really believe in, like protecting public lands and access to public lands. So we will continue to do that advocacy role.

SAFIAN: Early in your tenure, you chose to apologize for REI’s previous support of Doug Burgum for interior secretary.

LAUGHTON: Yeah.

SAFIAN: That must have been a tricky calculation, or was it not tricky?

LAUGHTON: It was tricky in the sense that I was new and hadn’t been part of the decision, and I was coming into it and having to understand what the situation was. But I would say it became clear that the right thing to do was to rescind our support for him because some of the things he supported were just at odds with who we are as a co-op. So I went out publicly and admitted that we had made the wrong call. I think, as much as people were still angry with us that we had even gotten involved in that, they appreciated the transparency and the vulnerability of saying, hey, we’re not going to get it right every time. One thing it taught us is that we need to listen to our members and avoid doing things that are at odds with our values.

SAFIAN: You talk about the outdoors as a place where people can come together, and this is at a time when we’re increasingly divided. So access to public spaces and public lands is sort of an antidote to that division?

LAUGHTON: Totally. It’s a totally nonpartisan way to come together, and community is so important to us at REI. We spend a lot of our effort on how we create the right bridges and the right access points for people into the outdoors to really help their mental health, their emotional health and their physical health. It really is a shared experience, and I think that’s why people love doing it in community, too, and having conversations with our green vests in our stores because they have shared a lot of those experiences. The emotion that comes with being outdoors is just really powerful.

SAFIAN: First public action as CEO: break ties with a Trump administration cabinet secretary. MB knows that, given REI’s co-op structure, she can’t follow the classic playbook. So how is she resetting REI’s retail priorities, and what’s the deal with union bargaining that sparked a boycott earlier this year? We’ll talk about that and more after the break. Stay with us.

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Before the break, REI’s Mary Beth Laughton talked about how the company’s unusual co-op structure provides a long-term advantage. Now she talks about the near-term challenges in today’s retail marketplace, what was behind a union-led boycott earlier this year, and how that squares with her priority on REI’s in-store green vest staffers. Plus, lessons she’s applying from her time at Sephora, Athleta and Nike. Let’s jump back in. I’m mindful that in our discussion so far, it could almost sound like REI is a public service organization.

LAUGHTON: Yeah.

SAFIAN: Or something like that, but you’re in the retail business.

LAUGHTON: Oh, we are in the retail business, yeah.

Copy LinkBringing human expertise into digital retail

SAFIAN: Tell me, what are you seeing in where the retail business is now? What’s hard about it? What’s changing about it? How are consumers right now?

LAUGHTON: What I’m seeing in the retail space is consumers these days are loving both channels, right? They still are coming into our stores. They love the human interaction, and we’ve got to keep making that service really special and differentiated, especially in a digital world where people are on their phones a lot and shopping online. We have 200 stores in the US. On the digital side, I feel like we’re really finding ways to make that experience not just transactional. I think consumers really want the digital experience to feel more akin to the store experience and be emotional and personal. Actually bringing our green vests’ recommendations onto our site and making that feel really seamless is something we’re focused on, too.

SAFIAN: If REI’s advantage is its human expertise, which you keep going back to with the green vests, in the digital world, and particularly as AI starts to maybe change how we shop via AI agents, does that change that emphasis or just change the way it shows up?

LAUGHTON: I think it does. It is something we want to make sure we are bringing to our customer wherever they’re shopping with us. Our green vests now do videos of the products. We’re really showcasing the product, talking about why they love it authentically, and we’re showing those on the product pages on our website. We really see great engagement with that, and I think our customer really loves it. For REI, this is a natural differentiator for us in a very digital world, and with the AI shopping agents you mentioned, that is something we can really bring that’s different.

SAFIAN: Is promoting your brand or reaching customers different now digitally? Search works differently. You have to deal with chatbots. Are agents buying things on REI’s site, or do you have your own agents helping customers buy things?

LAUGHTON: The way we think about it is we want REI to be top of mind wherever customers are. So if they are on one of the chatbots, we want to be discoverable there, right? We want REI to show up and be in the consideration set, and so we are spending a lot of time on how we make sure that happens so that we’re still in that conversation.

SAFIAN: Yeah, a lot of people are asking that question: How do I make sure that happens?

LAUGHTON: Yeah.

SAFIAN: Because it’s hard to do.

LAUGHTON: It’s hard to do, and a lot of it is how you make sure your expertise and data are set up in the right way to be captured and elevated in those experiences. We want people to see us as part of that conversation, even if they’re not on REI.com. But at the same time, we also are doing a lot to make sure we’re top of mind for customers, and to have them want to come to REI.com or into one of our stores or on our app directly, versus always having to be in the chatbot world. So we’re trying to make sure we have optionality across both and just be wherever customers want to be.

SAFIAN: Yeah, I keep thinking with the AI bots, it’s so tricky, because if you have too many of those bots hitting your site all the time —

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LAUGHTON: Yeah.

SAFIAN: It’s a cost, and it slows things down. And yet at the same time, if you don’t let them come, they won’t be able to surface you in the things they’re showing.

LAUGHTON: No, that’s right. It is a new world, and we’ve got to embrace it and not just keep fighting against it. I think of AI as a transformative thing that’s happening. It’s not like a technology rollout that’s going to stop and start. It’s really going to affect everything we do in the coming years, and we’ve been talking internally about how we need to find ways to embrace it. Our competition is using it. Our consumers are using it. We’ve got to be part of that. Of course, being REI, we’ve got to do it in a really responsible way and make sure we’re thinking through the potential risks of it and being cautious in some ways. But I don’t think we have a choice but to really be part of this movement. It seems akin to the dot-com boom back in the late ’90s and early 2000s, when people were worried about how that was really going to take hold and dominate everything. I think the brands that really embraced it and got ahead of it ended up being more successful, and I feel like we’re in a similar time right now.

SAFIAN: And if that costs you something in the near term, that’s just the cost of doing business these days.

LAUGHTON: It is. We’ll do what we can to help ourselves there, but I think there is an element of that. It’s a cost of doing business these days, and if we put our head in the sand, we’re just going to be left behind.

SAFIAN: It also ends up, for a lot of folks, raising new questions about the cost of human talent. I know.

LAUGHTON: Yeah.

Copy LinkBalancing union tensions with member expectations

SAFIAN: Earlier this year, there was a boycott of some of your goods by 70,000 REI Co-op members at the request of union members.

LAUGHTON: Yeah.

SAFIAN: Can you explain what that’s about and where that came from, and maybe where it’s going?

LAUGHTON: Yeah. We’re in bargaining with our unions and have been, and it’s a difficult and emotional situation. We certainly are continuing to bargain in good faith. I can’t speak to what’s happening at the table. That’s what’s happening there. But what I will say is that we continue to show up and listen, and will continue to do that. These types of things, like the boycott, are unfortunate because in that case, they were trying to boycott our sale, which actually helps put dollars in our employees’ pockets, right? When we do better as a business, we give higher bonuses. So it was kind of counterintuitive, and it’s just unfortunate, but I know there’s a lot of emotion involved with it.

SAFIAN: Do you feel like because you’re a co-op, your members hold REI to a different standard than they would a different kind of company?

LAUGHTON: I do think so. An important part of my job is helping listen to those members and really understand what they’re saying. We can’t always give members everything they want, right? Because we do have to run a business. We do need to be healthy. We need to be profitable. And sometimes that means making some difficult choices to enable the co-op to live for another 88 years.

We’re 88 years old this year. So part of it is listening, and part of it is just being transparent around what we are able to do and what we aren’t able to do, and having that conversation with members because I do think they understandably ask a lot of us. They feel really invested in the co-op, which is such a great thing overall.

SAFIAN: But it isn’t always easy.

LAUGHTON: It is not always easy.

SAFIAN: It’s not always easy.

LAUGHTON: No, for sure.

SAFIAN: The retail landscape has been dominated over the last couple of decades by the idea of how do we make shopping frictionless, make it easier and easier and easier. And yet sometimes, I don’t know, the human element — I guess I wonder whether, in some ways, REI is trying to keep some of that friction in, that there’s value in some of that friction.

LAUGHTON: I don’t know if I’d characterize it as friction that we’re trying to keep in, because we actually spend a lot of time and effort on how do we remove friction for our customer. At the end of the day, they want it to be easy. They want it to be intuitive. But to the human point, I do think that, to most of our customers, it is such a benefit because it feels different than a lot of retail these days. So it is something we continue to focus on. There are some things that AI just can’t do, right? One of them is the lived experience of our green vest. They have actually climbed a mountain or gone on a hike. AI hasn’t done that, and that’s something that’s really, really special that we want to hold on to and feel like will really help us going forward.

Copy LinkLeadership lessons from Sephora Athleta and Nike

SAFIAN: I mentioned early on that you were a leader at Nike before you came over. You’d been the CEO of Athleta. You were a senior leader at Sephora. Are there different lessons from each of those experiences that you draw on?

LAUGHTON: I do feel like I’ve taken away so much from each place I’ve been. I was at Sephora during the 2012 to 2020-ish range, and that was during the height of YouTube taking off and the makeup category exploding. I was running the digital business at the time, and when I came in, it was like a $250 million business, and we grew it to over a billion during the time I was there. We were really ahead of the curve from an innovation standpoint. We got ahead of the mobile curve and really started shifting resources from desktop over to mobile a lot sooner than some of our competitors and some other brands. I think I learned a lot about how important it is to kind of see around the corner of where the customer is going and not necessarily have to be leading edge on everything. You can be a fast follower, but you have to be in the game enough so that you’re not left behind. I think that’s helping me even today, as we were talking about with this whole AI transformation.

SAFIAN: You don’t have to be a first mover, but you’ve got to get in the game when you see it moving.

LAUGHTON: You’ve got to get in the game, and you’ve got to move quickly on certain things and not just drag your heels on everything because you’ll be left behind. Then Athleta — I would say the biggest thing there is I really loved how mission-driven Athleta was. It’s a B Corp and really clear in its mission and values, and I learned how to be a leader who can both drive high growth. We drove a ton of growth during the time I was there. It was during COVID. But also stay true to your mission and values, and that it’s not a trade-off, one or the other. They really can coexist, and I’ve taken a lot away from that that’s really applied, obviously, at REI.

SAFIAN: I talked to a CEO at one point who said your missions and values, you only really know them when you sacrifice making money in order to stay true to them.

LAUGHTON: Yeah.

SAFIAN: Otherwise, it’s just a preference. It’s not really a value. Were there choices like that that you found you had to make at Athleta?

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LAUGHTON: There definitely were. One is that we put a big effort around inclusive sizing in our stores and through our digital channels. As a business, we really embraced that because inclusivity was a core value. Even though that increased our product costs,

SAFIAN: We didn’t change the price to the customer, and that was a conscious choice that we made.

LAUGHTON: I think overall, what I’ve learned is that if you stick to your values as a company and a brand, people really do appreciate that, and that pays off in dividends in other ways through their loyalty and their engagement with the brand.

SAFIAN: It’s harder to track, maybe on a traditional P&L or KPI basis, but that doesn’t mean it doesn’t pay off in the long run.

LAUGHTON: That’s right. I think it helps preserve the brand and what makes it special for the long run, which is so important.

SAFIAN: And then you went over to Nike.

LAUGHTON: Yeah.

SAFIAN: Which is a very different kind of place.

LAUGHTON: Yes, very different. I had actually spent almost 10 years at Nike at the beginning of my career. What I really took away from both times I was at Nike is that you’re preserving what makes the brand special, and I think Nike has learned some lessons about what happens when that slips.

SAFIAN: So you’ve got that Nike experience, plus Athleta and Sephora. Now you’re sort of bringing them all together. What’s at stake right now for REI?

LAUGHTON: The biggest thing at stake, I think, is making sure we can be around for another 88 years. How do we create a long-term, sustainable co-op that is healthy, continues to leverage our strength and heritage around serving members, and doesn’t lose sight of our mission and values? It is a tricky equation, but I think what’s so amazing about REI is the passion of the people, whether it’s our employees or our members. That gives me faith that we will get to that really healthy place again financially and do so much good for the world as well.

SAFIAN: Well, this was great. Thanks so much for doing it.

LAUGHTON: Thanks, Bob.