Cabela's 2014 Annual Report Download - page 41

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31
Selling, distribution, and administrative expenses increased in 2014 compared to 2013 primarily due to
additional costs from increases in the number of new stores and costs in related support areas. We are focusing
on expense management throughout the Company and have implemented many expense reduction efforts that
benefited 2014 and that should continue to benefit operating income in upcoming periods. We plan to continue
our retail expansion, our omni-channel initiatives, and our Cabela’s branded product investments as we focus
on expense controls to levels consistent with how our business is performing. We will continue to manage our
operating costs accordingly through fiscal 2015.
Our vision is to be the best omni-channel retail company in the world by creating intense customer loyalty for
our outdoor brand. We are concentrating on these areas to achieve our vision:
x Intensify Customer Loyalty by deepening our customer relationships, aggressively serving current and
developing market segments, and increasing our innovation in Cabela’s products and services.
x Grow Profitably and Sustainably by adapting and sustaining our Cabela’s culture and continuously
seeking ways to improve profitability and increase revenue in all business segments.
x Enhance Technology Capability by implementing a strategic technology road map to streamline our
systems and accelerate customer-facing technologies.
x Simplify Our Business by aligning our goals to foster collaboration and streamlining cross-functional
processes.
x Improve Marketing Effectiveness by optimizing all marketing channels and expanding our digital and
e-commerce capabilities while continuing to strengthen the Cabela’s brand.
Improvements in these areas will help to increase our return on invested capital, an important measure of how
effectively we have used capital in our operations in generating cash flows, thereby creating value in our Company.
We offer our customers integrated opportunities to access and use our retail store, e-commerce websites
(Cabelas.com and Cabelas.ca), and catalog channels. Our in-store pick-up program allows customers to order
products through our websites, store kiosks, and catalogs and have them delivered to the retail store of their choice
without incurring shipping costs, thereby helping to increase foot traffic in our stores. Conversely, increasing
our number of retail stores introduces customers to our websites and catalog channels. We are capitalizing on
our omni-channel model by building on the strengths of each channel, primarily through improvements in our
merchandise planning system. This system, along with our replenishment system, allows us to identify the
correct product mix in each of our retail stores, maintain the proper inventory levels to satisfy customer demand
in both our Retail and Direct business channels, and improve our distribution efficiencies. In 2014, we continued
to enhance our omni-channel efforts through greater use of digital marketing and to make improvements to our
mobile platform. In addition, we rolled out omni-channel fulfillment, whereby we have added our retail stores to
our distribution network so customers who order through our call centers or website are no longer solely dependent
upon the stock we have in our distribution centers.
We continue to work with vendors to negotiate the best prices on products and to manage inventory levels,
as well as to ensure vendors deliver all products as expected. We are focusing on product assortments for our core
customer base through our detailed pre-season planning efforts, in-season monitoring of sales, and management
of inventory. We have improved and continue to enhance our retail store merchandising processes, information
technology systems, and distribution and logistics capabilities. We have also improved our visual merchandising
within the stores and coordinated merchandise at our stores by adding more regional product assortments. Our
outfitters also benefited through the launch of our new retail product information application which is available
via hand held devices. This provides quick and convenient access to product information, allowing outfitters to be
more efficient and engaging with customers. In addition, to enhance customer service at our retail stores, we have
continued our management training and mentoring programs for our retail store managers.