Cabela's 2010 Annual Report Download - page 15

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Retail Store Expansion Strategy. Enhancing our retail store efficiencies and taking the necessary steps to
improve our financial performance is a high priority in our strategic planning. We focus new-store growth where
we are strongest with new stores strategically sized to match their markets. We continually review our previously
announced stores to reconfirm our expectations based on what we have learned over the past year. We opened a
76,000 square foot retail store in Grand Junction, Colorado, in May 2010. This store features our next generation
format while the exterior reflects our traditional store model. We plan on opening two next generation stores in the
United States in 2011, one in Allen, Texas, and one in Springfield, Oregon. In addition, we plan to open one next
generation store in Canada in 2011 in Edmonton, Alberta. We also announced plans to open a next generation store
in 2012 in Wichita, Kansas, and another store in 2012 in Canada, though the location has not been named.
Store Locations and Ownership. We currently own 25 of our 31 retail stores. However, in connection with
some of the economic development packages received from state or local governments where our stores are located,
we have entered into agreements granting ownership of the taxidermy, diorama, or other portions of our stores to
these state and local governments. Refer to Item 2 – “Properties” for the locations of our stores.
Direct Business
Our Direct business uses catalogs and the Internet as marketing tools to generate sales orders via the Internet,
telephone, and mail. Our Direct business generated revenue of $1.0 billion in 2010, representing 41.4% of our total
revenue from our Retail and Direct businesses.
Catalog Distributions. We have been marketing our products through our print catalog distributions to our
customers and potential customers for over 49 years. We believe that our catalog distributions have been one of
the primary drivers of the growth of our brand and serve as an important marketing tool for our Retail business.
In 2010, we mailed more than 136 million catalogs to all 50 states and to more than 175 countries and territories.
Our master catalogs offer a broad range of products while our specialty and micro-season catalogs offer products
focused on one outdoor activity, such as fly fishing, archery, or waterfowl, or one product category, such as
women’s clothing.
Many of our customers read and browse our catalogs, but order products through our website. Based on our
customer surveys, we believe that our customers want to receive catalogs even though they purchase merchandise
and services through our website and retail stores. We use the catalogs to prompt customers to go to retail stores
and the Internet or to our call centers to place orders directly. Accordingly, we remain committed to marketing
our products through our catalogs, as we view our catalogs and the Internet as a unified selling and marketing
tool. Our goal is to continue to fine tune our catalogs, as well as the number of pages and product mix in each, in
order to improve the profitability of each title. We want to create steady, profitable growth in our direct channels,
while reducing marketing expenses and significantly increasing the percentage of market share we capture through
the Internet.
We recognize that the catalog business is mature and that mobile marketing and social networking are
going to have an increasingly important focus for us in the next couple of years. With the growing presence of
new technologies, we believe mobile marketing and social networking will build our brand, build our customer
databases, and enhance the management of contacts with our customers.
Direct Business Marketing. We market our products through our website and catalog circulation. Our
website is a cost-effective medium designed to offer a convenient, highly visual, user-friendly, and secure online
shopping option for new and existing customers. We continue to expand electronic marketing strategies and
customize Internet marketing campaigns to target and optimize specific markets. In October 2010, we launched
our new website which featured significant enhancements, including guided navigation to improve customers’
movement throughout the site, managed content to aid in customizing the individual shopping experience, better
promotional capability, and international commerce capabilities. In addition to the ability to order the same
products available in our catalogs, our website gives customers the ability to review product information, purchase
gift certificates, research general information on the outdoor lifestyle and outdoor activities, purchase rare and
highly specialized merchandise, and choose from other services we provide. The number of visitors to our website