Cabela's 2008 Annual Report Download - page 38

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Leverage Our Multi-Channel Model – Our in-store pick-up program allows customers to order products
through our catalogs and Internet site, and have them delivered to the retail store of their choice without incurring
shipping costs, increasing foot traffic in our stores. Conversely, our retail stores introduce customers to our Internet
and catalog channels. We are capitalizing on our multi-channel model by building on the strengths of each channel,
primarily through improvements in our merchandise planning and replenishment systems. These systems allow us
to identify the correct product mix in each of our retail stores, and also help maintain the proper inventory levels to
satisfy customer demand in both our Retail and Direct business channels.
Next Generation Stores – To enhance our returns on capital we developed a next generation store format
incorporating the following objectives:
• a store development model adaptable to more markets, faster to start-up, and more efficient to operate to
reduce our investment and increase sales per square foot; and
• to provide shopper-friendly layouts with regionalized product mixes, concept shops, and new product
displays/fixtures featuring an improved look.
We incorporated these next generation store concepts into our new Rapid City, South Dakota, store which
opened in 2008. Our retail store in Billings, Montana, scheduled to open in the second quarter of 2009 will also
encompass our next generation store format.
Direct Business Expansion – We are working on the following key growth objectives to expand our catalog
and Internet channels:
• natural growth by offering industry-leading selection, service, value, and quality;
• acquisition, retention, and reactivation of customers through our multi-channel platform;
• category expansion to capitalize on the general outdoor enthusiast;
• develop and execute strategies to broaden our exposure to different growing networks, e-commerce
platforms, and international e-commerce growth;
• an enhanced focus on the Canadian market by building on our Canada acquisition; and
• targeted marketing designed to increase sales of certain on-line market sectors.
Although the number of Direct customers who purchased merchandise from us in the last twelve months
decreased by 4.0% compared to 2007, our total Direct customer base expanded during 2008 compared to 2007,
positioning ourselves for future revenue growth when the economy improves.
Growth of Our Credit Card Business – We continue working toward increasing our Financial Services
revenue by attracting new cardholders through lower cost marketing efforts with our Retail and Direct businesses.
By continuing our conservative underwriting and account management standards and practices, we are controlling
costs in our Financial Services segment through active management of our credit card delinquencies and charge-offs
which directly impacts our securitization income.
Uncertainty in Worldwide Credit Markets and Macroeconomic Environment – We expect a challenging
business environment in 2009 that may impact our access to credit which we rely on to finance our merchandising and
Financial Services businesses. We will continue to monitor our debt covenant compliance provisions and our access
to the credit markets. Our Financial Services business will continue to monitor developments in the securitization
and certificates of deposit markets to ensure adequate access to liquidity.