Direct sales, primarily fulfilled purchases made at REI.com, account for a healthy percentage of our revenue but also contribute to our climate impact. For several years, the company has offered complimentary shipping for store pick-up for orders made through REI.com, the REI catalog or our 800 number.

RESULTS

In 2010, our growth in our direct sales channel was 22.9 percent. While the volume of customer orders increased, we experienced a reduction in emissions of 2.9 percent or 6,260 tons of CO2 for this area of our business.

This improvement is attributed to the introduction of free ground shipping to members, which reduced customer requests of air freight and our improved communication of delivery times on REI.com during the check out stage of an online order. We also focused on balancing our inventory between our West Coast and East Coast distribution centers, reducing the need for long cross-country shipments.

LOOKING AHEAD

REI's approach is to ensure that customers and members have access to the products they want when they want them, while minimizing the transportation impacts. For example, we now offer online customers visibility to store inventory so they may learn if their desired product is available locally and would not require shipping. We will continue to invest in logistics infrastructure and technology that will meet customer needs and increase the efficiency of transportation.

Our continued involvement in the Outdoor Industry's Eco Working Group will also help us address and implement efforts to minimize unnecessary packaging that we're currently shipping. These actions will reduce the weight of a shipped packaged and resulting CO2 impact.

We continue to work with our third-party carriers to understand the exact greenhouse gas impacts of the packages we ship, which will allow us to continue to optimize our logistics network.