Mountain Equipment Co-op (MEC) was founded on a simple concept: find a way to give university students outdoor gear at good prices. No retail outlet existed 38 years ago that offered that possibility, but rather than setting up MEC as a normal business, the organization’s six founding members set up their company as a co-op, ensuring MEC’s original focus would never be lost.
Today, MEC designs and manufactures roughly 50% of the products it distributes. According to CEO David Labistour, this wasn’t the case when the Canadian-based organization began to practice business, but the added capabilities build on and strengthen MEC’s original focus.
“When we began, we primarily purchased outside brands.
The internal product development process came about as a way to give our members what they wanted at a lower price,” he said. “In the last 10 to 12 years, it’s become a key part of what we do.”
The structure of the co-op’s design team is as simple as its founding concept. There is no sales team, and there is no buffer between product development and product management. Product managers look at the sales and assortment of products in one of MEC’s 12 locations and identify customer demand based on findings.
“Based on the sales, lifecycle, and assortment needs of a product, our product management team decides what needs to be developed or refreshed. The team then works directly with the designers,” said Labistour. “We get information directly from our core members, and that feeds directly into product development.”
MEC also offers product reviews on its Web site, and any of its 3 million members can leave feedback. Each of the reviews are taken into consideration and put directly into product development. “Rather than being driven by marketing agendas, we are literally driven by customer demand,” said Labistour.
Although keeping a handle on what 3 million members want from their outdoor gear might seem a daunting task, MEC has had 38 years to perfect its process due to its cooperative business structure. By law, co-ops must keep track of the purchases its customers or members make, and at the end of the year, any surplus funds must be returned to members based on the amount of their purchases that same year.
MEC follows suit, returning any surplus to its members’ share accounts. It’s a legal requirement, but Labistour views it as a 38-year-old CRM. “We know our customers, what they’re purchasing, and where they’re purchasing,” he said.
“We know that 20% of our customers purchase roughly 50% of our products, and we know who is more active and who is less active,” he continued. “Having that information helps us guide our production development.”
Ties that bind
Labistour transitioned into the role of CEO in 2008 after serving as the head of MEC’s purchasing, design, and merchandising team. His only goal as he took the lead position was to maintain the authenticity of the co-op as a product-driven organization.
A big piece of keeping the co-op’s authenticity in place is in maintaining its strong and somewhat unique culture, which has two commonalities in its stores and its corporate office. First, all employees have a passion for outdoor recreation and MEC products. Second, all employees have a commitment to social and environmental concerns.
“We have a diverse population of employees, and we’re a fairly young organization,” said Labistour. “The ties that bind are a passion for outdoor recreation and for social and environmental issues.”
MEC uses this information to its advantage when staffing its head office and its stores. In its head office, the co-op doesn’t employ professional buyers or inventory managers. Instead, it employs people with a passion for outdoor recreation and then trains them in systems, retail processes, and purchasing practices.
“The end result is we have chemists, lawyers, virologists, and people with no tertiary education buying outdoors products,” Labistour said. “The reason they’re doing the job is their passion for outdoor activity and products.”
On the flipside, when looking to staff its stores, MEC looks for service-oriented people who want to help others and offers a training program to give those employees who are novice outdoor types the opportunity to expand their knowledge and experience. “Before our store employees get on the floor, they go through two weeks of knowledge training on how to fit our products to our members’ needs,” he said.
Rather than training employees to sell, MEC trains its staff to find out the needs of the co-op’s members and then find a product that fits the need. The longer employees work at a store, the more in-depth their training becomes. Although the approach for head-office staff and retail-level staff is different, at the end of the day, all employees will be well rounded in all aspects of MEC’s culture.
“A little more than 75% of the people in our head office come from our stores,” said Labistour. “People develop a passion for our products, and they work their way through the company. It further illustrates that our employees love their jobs.”
It has been reported that in 20 years Canada’s mortality rate will be higher than its fertility rate, which means MEC’s market will physically shrink. In addition, younger generations are less active, and the advent of communication technologies means people are going outdoors less for their recreational activity.
“We’re aware of the fact that we need to be flexible, robust, and innovative to ensure we stay ahead of the curve,” said Labistour. “At the same time, we don’t want to lose the authenticity of our product and culture.”
To achieve both goals, MEC has increased its focus on understanding its environmental impact, reducing its carbon footprint, and being even more careful about where it places its stores and the impact it will have in those communities. Essentially, MEC is focusing on finding ways to do more with less.
“We have to have an efficient supply chain, be very competitive and professional, and put stores in the communities where our membership exists, but we make it a point to build some of the greenest buildings in Canada,” Labistour said.
Coupled with conservation in its supply chain, its ethical sourcing practices with its manufacturers, its awareness of its product footprint, and its sustainability building practices, MEC is staying true to its original goal.