The store drives customers to the Web site, which then drives customers back to the store. By integrating their Web presence with their physical presence, retailers use the strengths of one form of retailing to reinforce the other. However, we think that remaining one company and not providing any barriers between the retail and on-line entity is going to serve the customer better. To some business people, it might sound a bit anticapitalist to shun the public markets at a time when there is so much money to be had. Even odder, REI gives a portion of its profits back to its customers.
Membership confers actual ownership of the company.
The owners elect the board and are entitled to a patronage dividend at the end of every year, a rebate based on a percentage of how much they've spent. The decision not to take the Internet business public may or may not turn out to be the right one. But REI's employees still get paid, the executives are still compensated, and management still has control over how much it wants to invest on expansion and future business development. In any case, REI's unusual cooperative structure not only fostered a strong focus on the customer, it also made it easier to get the whole company working toward real-world integration. Everyone was on board from the beginning.