Cabela's 2013 Annual Report Download - page 18

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8
Cabela’s Branded Products. In addition to national brands, we offer our exclusive Cabela’s branded
merchandise. Sales of our branded merchandise are included in the above table that shows the percentage of
merchandise revenue contributed by major product categories for our Retail and Direct segments and in total.
We have a significant penetration of Cabela’s branded merchandise in casual apparel and footwear as well as
in selected hard goods categories such as camping, fishing, and optics. Where possible, we seek to protect our
Cabela’s branded products by applying for trademark or patent protection for these products. Our Cabela’s branded
products typically generate higher gross profit margins compared to our other branded products. In 2013, our
Cabela’s branded merchandise accounted for approximately 25% of our merchandise revenue. By having an
appropriate mix of Cabela’s branded and other branded merchandise, we strive to meet the expectations and needs
of our customers and expand the recognition of the Cabela’s brand.
Marketing
We seek to increase the amount each customer spends on our merchandise through enhanced customer
targeting, expanded use of digital marketing channels in mobile marketing and social networking and other
technology-based approaches, continued focus on specialty catalogs, and the development and marketing of
new products. In February 2013, we launched our Cabela’s brand platform “It’s In Your Nature,” which creates
a connection between us and our customers by focusing on our common appreciation for the outdoors. We have
taken advantage of web-based technologies such as targeted promotional e-mails, online shopping engines,
and Internet affiliate programs to renew efforts in local markets and to increase sales. We also have improved
our customer relationship management system, which we expect will allow us to better manage our customer
relationships and more effectively tailor our marketing programs. We will continue to use our expanding Retail
business to capture additional customer purchase history and information.
In addition to the use of our website and our catalogs, we use a combination of promotional events, traditional
advertising, and media programs as marketing tools. We engage in certain promotional activities by sponsoring
sportsmen and women advocacy groups and wildlife conservation organizations, as well as regional and local
events and organizations. We also provide sponsorship of fishing tournaments and other related habitat and wildlife
conservation activities.
We have historically received extensive local publicity from the unique Cabela’s shopping experience when
we open a store. As we enter into metropolitan markets, where the opening of a Cabela’s store may not be major
news, we will supplement any publicity with additional advertising to increase consumer awareness of new
store openings.
Competition
We compete in a number of large and highly competitive markets, including the outdoor recreation and
casual apparel and footwear markets. The outdoor recreation market is comprised of several categories, including
hunting, fishing, camping, and wildlife watching, and we believe it crosses over a wide range of geographic and
demographic segments. We compete directly or indirectly with other broad-line merchants, large-format sporting
goods stores and chains, mass merchandisers, warehouse clubs, discount and department stores, small specialty
retailers, and catalog and Internet-based retailers.
We believe that we compete effectively with our competitors on the basis of our wide and distinctive
merchandise selection, our strong credit card loyalty rewards program for our customers, the superior customer
service we offer our customers, and the quality associated with the Cabela’s brand, as well as our commitment to
understanding and providing merchandise that is relevant to our targeted customer base. We cater to the outdoor
enthusiast and the casual customer, and believe we have an appealing and inspiring store environment. We also
believe that our omni-channel model enhances our ability to compete by allowing our customers to choose the
most convenient medium to interact and transact with us. This model also allows us to reach a broader audience in
existing and new markets and to continue to build on our internationally recognized Cabela’s brand.