Cabela's 2011 Annual Report Download - page 16

6
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.
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 websites
increased 4.5% in 2011 compared to 2010. Our website was the most visited sporting goods website in 2011
according to Hitwise, Incorporated, an online measurement company.
We use our customer database to ensure that customers receive catalogs matching their merchandise
preferences, to identify new customers, and to cross-sell merchandise to existing customers. We focus on a
disciplined approach in determining the number of pages and circulation of our catalogs in order to maximize
productivity and profits as postage and printing costs continue to increase. We also utilize our marketing
knowledge base to determine optimal circulation strategies to control our catalog costs while continuing to grow
our merchandising business.
Financial Services Business
Through our wholly-owned bank subsidiary, World’s Foremost Bank (“WFB”), we issue and manage the
Cabela’s CLUB Visa credit card, a rewards based credit card program. We believe the Cabela’s CLUB Visa credit
card loyalty rewards program is an effective vehicle for strengthening our relationships with our customers,
enhancing our brand name, and increasing our merchandise revenue. Our rewards program is a simple loyalty
program that allows customers to earn points whenever and wherever they use their Cabela’s CLUB Visa credit
card and then redeem earned points for products and services at our retail stores or through our Direct business.
Our rewards program is integrated into our store point-of-sale system. Our customers are informed of their
number of accumulated points when making purchases at our stores or ordering through our Direct business. The
percentage of our merchandise sold to customers using the Cabela’s CLUB Visa credit card approximated 29% for
2011. The primary purpose of our Financial Services business is to provide customers with a rewards program that
will enhance revenue, profitability, and customer loyalty in our Retail and Direct businesses.
Our bank subsidiary is a Federal Deposit Insurance Corporation (“FDIC”) insured, special purpose, Nebraska
state-chartered bank. Our bank’s charter limits us to issuing consumer credit cards and certificates of deposit of
$100,000 or more. Our bank does not accept demand deposits or make non-credit card loans. During 2011, we had
an average of 1,416,887 active credit card accounts with an average balance of $1,937 compared to an average of
1,317,890 active credit card accounts with an average balance of $1,875 during 2010.
Financial Services Marketing. We have a low cost, efficient, and tailored credit card marketing program
that leverages the Cabela’s brand name. We market the Cabela’s CLUB Visa credit card through a number of
channels, including retail stores, inbound telemarketing, catalogs, and the Internet. Our customers can apply for the
Cabela’s CLUB Visa credit card at our retail stores and website through our instant credit process and, if approved,
receive reward points available for use on merchandise purchases the same day. When a customer’s application
is approved through the retail store instant credit process, the customer’s new credit card is produced and given
to the customer immediately thereafter. Maintaining the growth of our credit card program, while continuing to
underwrite high-quality customers and actively manage our credit card delinquencies and charge-offs, is key to the