Cabela's 2011 Annual Report Download - page 15

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5
Due to the success of our next-generation store format, and in particular the success of the smaller
Springfield, Oregon, retail store, we have developed a new “Outpost” store format. These Outpost stores will
be approximately 40,000 square feet and have an innovative “core-flex” merchandise strategy (selected core
assortment of products and flexible seasonal merchandise). Our Outpost stores will allow us to effectively serve
smaller markets with a large concentration of Cabela’s customers and are in addition to our next-generation format.
The first Outpost store is expected to open in the fall of 2012 in Union Gap, Washington.
Retail Store Expansion Strategy. Enhancing our retail store efficiencies and taking the necessary steps to
improve our financial performance are high priorities 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. During 2011,
we opened three next-generation stores - two in the United States (Allen, Texas, and Springfield, Oregon) and one
in Edmonton, Alberta, Canada. We have announced plans to open five next-generation stores in 2012: Wichita,
Kansas; Tulalip, Washington; Rogers, Arkansas; Charleston, West Virginia; and Saskatoon, Saskatchewan,
Canada; and an Outpost store in Union Gap, Washington, increasing our retail square footage approximately 10%.
Looking to 2013, we expect to increase retail square footage 11% to 13% with the opening of next-generation and
Outpost stores.
Store Locations and Ownership. We currently own 26 of our 34 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 2011, representing 38.2% of our total
revenue from our Retail and Direct businesses.
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. We are changing to a more customer
centered focus which will allow us to take advantage of social networking opportunities and embrace new
marketing strategies that we have not fully capitalized on. During 2011, we expanded our mobile and social
marketing initiatives by launching new mobile technology enhancements that include a fully-integrated mobile site
that displays our entire inventory assortment, which will improve the customers’ portable shopping experience. In
addition, we have launched a Facebook shopping outlet to support our growing customer fan base, which is now
over 1.4 million fans. We have seen early successes in our mobile and social marketing, and we will continue to
utilize best-in-class technology to improve our customers’ digital shopping experience and build on the advances
we have already made in digital marketing to capitalize on the ways our customers shop.
Catalog Distributions. We have been marketing our products through our print catalog distributions to our
customers and potential customers for over 50 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 2011, we mailed more than 130 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