MEC WITHOUT THE MOUNTAIN

Mountain Equipment Co-op became a massive Canadian success story by appealing to hard-core adventurers. Now it's dumping the 'mountain' to get suburban soccer moms and joggers. Is the co-op being co-opted?

Careening down a steep, narrow, rocky trail amid the towering trees of North Vancouver's Mount Fromme is not my idea of relaxing. But my guide, Jesse Macdonald, is convinced it will be fun. Terrifying and a bit nauseating, sure, but fun? The most hazardous thing I've encountered on a bike before this moment is rush-hour traffic.

"C 'mon, don't worry about it," he says with an encouraging smile. "There's no rush. Every few feet you make it is a win." His friendly patter -- like action sports banter delivered by the world's friendliest kindergarten teacher -- gradually coaxes me down the mountain trail with only a few mishaps; by the time we coast to the bottom, my gritted teeth resemble a smile.

Macdonald, a fixture in Vancouver's robust community of mountain bikers, is also a product manager with outdoorsy Vancouver-based retailer Mountain Equipment Co-op. Though plunging headlong down mountains is how he likes to spend his weekends, he's also in charge of MEC's less extreme lifestyle categories, like running, cycling, yoga and fitness. Why would this hard-core mountain biker want to spend the afternoon hand-holding a wobbly urbanite like me down a mountain? In part, because he loves it and wants to spread the gospel. But it's also because he -- along with the rest of the company -- is engaged in a massive, years-long transformation to try to appeal to more to people like me: people who have never climbed a mountain or hurtled down one on a bike. MEC loves its intrepid adventurers, and it wants to keep them happy, for sure. But it also increasingly welcomes joggers, yoga enthusiasts, urban cyclists, fitness buffs and casual campers. Now it's making its most audacious move: taking the mountain right out of its name.

On June 18, MEC's CEO David Labistour wrote a blog post on the company's website to unveil the organization's new brand identity and strategy to its more than four million members. Entitled "Looking Toward MEC's Future," he outlined how the co-op was evolving to include more urban activities and, more visibly, changing its iconic logo. The bulk of the responding 472 comments weren't exactly a standing ovation.

"Oh MEC! Best publicity stunt ever! Can't wait for the announcement that this is all a big joke any day now…"

"The 'Co-op' is losing grasp of its roots and trying to be everything to everyone."

"Man, that new logo sucks."

The wood beams and exposed brick that line the inside of MEC's Vancouver headquarters make it feel like someone decided to convert one of the co-op's meticulously groomed stores into a workspace. But instead of a climbing wall and kayaks, it's lined with cubicles for almost 300 employees. Sitting in his office, the 58-year-old CEO and native South African is dressed in a crisp white shirt, faded jeans and a pair of black Chuck Taylors, and looks about as lean and fit as you'd expect a former competitive windsurfer to be. He smiles broadly and dismisses the blog furor with a shrug. "When I first came to Canada, people spoke incredibly glowingly about a Vancouver retailer called Woodwards," says Labistour. "They talked about how awesome Woodwards was, but you know what? Woodwards went out of business. Things change. Very often you need to let go of something before you can take hold of something new."

That something new for MEC goes deeper than the new logo being raised over its 17 stores across Canada this fall. Over the years, MEC shelves have subtly reflected a changing consumer base, with products reaching outside its traditional backcountry and wilderness core -- from messenger bags to bicycles to yoga mats -- but this is the first time the organization is loudly and proudly wrapping itself in that broader identity, embracing the urban jogger as much as the ice climber.

The new logo is actually the final stage of a five-year existential struggle within MEC, with Labistour and a handful of other executives orchestrating a cultural shift at this iconic Canadian brand from something perceived as elitist and exclusive to what they hope will be the ultimate outdoor lifestyle organization.

But why? Why would a 40-year-old co-op retailer that has so successfully served outdoor enthusiasts and die-hard adventurers need to change? Why not let the Sport Cheks and Lululemons of the world cater to urban joggers and yogis?

If you think the blog comments were harsh, it's nothing compared to the cries, criticisms and worse that Labistour had to weather from another group of stakeholders who definitely didn't like the sound of MEC's proposed overhaul: his own employees.

"We have members who are runners or cyclists who have no interest whatsoever in ever going to Everest, and that's OK," chief product officer Jeff Crook told his team during an early meeting about MEC's new direction. That didn't go over too well. "Bullshit!" came the response from one employee. "If they don't want to climb Everest one day, we don't want them as a customer," said another. MEC's strength since its beginning was attracting employees who were enthusiastic for extreme outdoor activities; as Crook quickly found out, not all of them liked the idea of making the tent bigger. "That kind of elitist attitude definitely existed here," says Crook, who joined MEC in 1993.

Mountain Equipment Co-op began in 1970 on Washington's Mount Baker. Thanks to terrible weather, four Canadian climbers were stuck in their tent at the base of a glacier and came up with an idea to bring all the best parts of Seattle's popular REI outdoor co-op to Canada, so climbers and outdoor enthusiasts wouldn't have to cross the border to get their goods.

What started with six members and $65 of operating capital has since grown to 1,785 employees and more than $300 million in annual revenue. But even with such a massive gulf between the co-op's past and present, the idea of real change was a tough sell.

Asked why an independent co-op is even trying to compete with traditional sports and lifestyle retailers, Labistour says MEC made that decision long before his time. "If MEC had decided to stop at one or two stores and run like a little independent co-op that focused on just a few activities, it could have," says Labistour. "But as soon as the organization got to a certain size, it became subject to market forces."

The CEO argues that if the co-op wants any real progress in achieving its goals of encouraging Canadians to lead active lifestyles, working with industry on more sustainable manufacturing processes and investing in community programs, it needs influence. "You have to be successful to do the things you want to do," says Labistour. "You can't separate the two."

It took three years to sell MEC's new strategy internally, but Crook and Labistour had a secret weapon: data, and lots of it. As a co-op, MEC customers must buy a membership to shop there, including filling out an application form and handing over their membership card when they shop. With more than four million members, MEC had a lot of data, more than most retailers can boast: who was buying what products, from which stores, how often, where they live, household demographics and more. It was the kind of data that can stand in the face of any blog comment, anecdotal opinion or focus group. Despite the foot-dragging they could see among some employees who didn't like their proposed changes, the executive team could clearly see a pattern forming among their customers. In 2008, store sales were declining, and MEC lost 5% of its female customers. Meanwhile, international retailers and new domestic competitors like SAIL were opening across the country, coupled with the rise of e-commerce options like Backcountry.com and Amazon. "The writing was on the wall," says Labistour. "We had to move."

So far, a broader product offering has been very good for MEC's business. While 2012 marked the initial product expansion into more urban activities like yoga, running and road cycling, MEC also had record sales in whitewater paddling, backcountry ski and climbing equipment. Between 2011 and 2012, overall revenues grew by 11.8%.

Christie Hickman, vice-president of market research for the U.S.-based Outdoor Industry Association, says her organization just this year began a multi-year research project on the shift occurring in the marketplace, in part inspired by watching MEC. "We're thrilled to see the direction MEC is going because, frankly, it's where I think a lot of the market in general needs to go," says Hickman.

Though MEC's largest changes by far are happening on store shelves, the co-op's new logo -- completely mountain-free -- has been the most polarizing transformation. One glance at MEC's Facebook page and it's clear that even members who are fine with broadening the co-op's appeal are puzzled by the logo change. The company decided it needed to update its look to reflect its own cultural shift and tapped Toronto's Concrete Design to come up with options. The firm went through thousands of iterations before whittling the candidates down to three. Of those, two prominently featured some sort of mountain graphic. They picked the third.

"I don't think they ever thought that we'd choose this one," says MEC chief marketing officer Anne Donohoe. "But in order to shake up perceptions and reach new audiences, something needed to shift. Keeping the mountains wasn't going to help us achieve our broader goals."

The outcry over the logo and MEC's overall direction hasn't gone unnoticed within the company, but Labistour and his team are confident that they can diffuse any doubt among shoppers the same way they did internally: communication and numbers. The company painstakingly explained the motivations behind each of its moves, showing the data, then working to implement the change into operations.

Now, it's time to do that with members. In September, MEC launched a new marketing campaign under the tag line, "We are all outsiders," which celebrates yoga alongside rock climbing, backcountry skiing and dog-walking.

When Labistour first joined MEC, the co-op offered employees a whitewater paddling course, and only four people signed up. Last year, the same course had to be capped at 40 people because there was no more room. "I asked people why they signed up this time as opposed to before," says Labistour. "They said back in the day they thought it was only for the hard-core people. But now the culture of the organization is more encouraging and inclusive, which means they don't feel stupid trying something new."

Critics of both the logo and MEC's big-tent approach tend to wax nostalgic about the co-op's past and founding goals. But Tom Herbst, who served as CEO of MEC from 1974 to 1976 and again from 1978 to 1992, says the "mountain" in the name wasn't even there to begin with. "The original name it applied for was Outdoor Equipment Co-op," says Herbst. "It was intended to be a broad sort of thing, but was actually rejected by the B.C. Registry for being too broad!"

Herbst also dispels any notion that Labistour and the current leadership have committed heresy with the new strategy. In fact, it looks a lot more like the original plan than you might think. "We always expected it to be big, even 40 years ago," says Herbst. "In those days, outdoors stores were uncharted territory, but today it's pretty sensible for MEC to be where it is."

"There are people who define themselves by their exclusivity, and we're going to probably lose those people," says Labistour. But he sees a bigger opportunity in throwing open MEC's doors to anyone who wants to get outside -- whether to bike down a mountain or walk the dog. "Those are the people I want."

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NOT FOR MOUNTAIN CLIMBERS

To appeal to urbanites as well as back-country adventurers, MEC is adding clothes that skew toward high fashion rather than high altitudes

PRANA TALLY TOP

This prestige fitness label is a new addition to MEC stores

MEC GEORGETTE TOTE

A fashionable bag with built-in straps to hold a yoga mat

MEC FRANKLIN JACKET

Warmth against the cold, but with quilted lining for a "vintage vibe"

MEC IGNITE ZIP-T

Mountain-tech specs, but designed for running city streets

MEC CROSSTOWN JACKET

Reflective patches for cycling tuck away for fashion's sake

MEC OFF THE GRID SHIRT

Asymmetrical pockets and contrast stitching is form, not function

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