Cabela's 2004 Annual Report Download - page 17

Download and view the complete annual report

Please find page 17 of the 2004 Cabela's annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 130

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130

Expand the reach of our brand and target market through complementary opportunities. We focus
on increasing consumer awareness of our company and maintaining and developing our outdoor lifestyle
image by using consistent branding in all of our distribution channels. We also will seek to continue to
eÅectively broaden the application of our brand through opportunistic acquisitions of complementary
businesses, as well as through the internal development of relevant businesses and product categories. We
will continue to leverage our brand recognition in selected areas through corporate relationships and
alliances. We intend to increase the penetration of our Cabela's Club VISA credit card among our
customer base through low cost target marketing and solicitations at our destination retail stores, which we
believe, based upon historical results, will reinforce our customer loyalty and retention and thereby increase
revenue and net income.
Direct Business
Our direct business uses catalogs and the Internet as marketing tools to generate sales orders via the
telephone, the Internet and the mail. Our direct business generated $970.6 million in revenue in Ñscal
2004, representing approximately 66% of our total revenue from our direct and retail businesses for Ñscal
2004. See Note 20 to our consolidated Ñnancial statements and our ""Management's Discussion and
Analysis of Financial Condition and Results of Operations'' for additional Ñnancial information regarding
our direct business.
We have been marketing our products through our print catalog distributions to our customers and
potential customers for over 40 years. We believe that our catalog distributions have been one of the
primary drivers of the growth of our goodwill and brand name recognition and serve as an important
marketing tool for our destination retail stores. In Ñscal 2004, we mailed more than 120 million catalogs
with 76 separate titles to all 50 states and to more than 120 countries. Our general catalogs range from
300 to 1,480 pages and our specialty catalogs range from 52 to 240 pages. Our catalog layouts are designed
to increase sales by presenting products in speciÑc categories and sections.
Our specialty catalogs oÅer products focused on one outdoor activity, such as Öy Ñshing, archery or
waterfowl. We carefully analyze our historical sales data and introduce targeted specialty catalogs featuring
product lines that have historically generated suÇcient customer interest. For example, as a result of the
demand for women's apparel and footwear in our general catalogs, we have designed new specialty catalogs
featuring a wide selection of merchandise in that category. We introduced six new specialty catalogs in
2004 that focused on outdoor-themed furniture and home accessories as well as women's clothing and
children's outdoor clothing.
We use the customer database generated by our direct business to ensure that customers receive
catalogs matching their merchandise preferences, identify new customers and cross-sell merchandise to
existing customers.
We also market our products through our website which has a number of features, including product
information and ordering capabilities and general information on the outdoor lifestyle. This cost-eÅective
medium is designed to oÅer a convenient, highly visual, user-friendly and secure online shopping option for
new and existing customers. Our website was in the top 1% of sites in the Hitwise Incorporated online
measurement sport & Ñtness category based on market share of visits.
Our website oÅers all of the merchandise included in our catalogs and contains more extensive
product descriptions and photographs, as well as additional sizes and colors of selected merchandise. In
addition to the ability to order the same products available in our catalogs (including the use of the
catalog product identiÑcation number for quick ordering), our website gives customers the ability to
purchase gift certiÑcates, research outdoor activities and choose from other services we provide. Our
website also oÅers discontinued merchandise through a Bargain Cave link which is advertised in our
catalogs.
Our website is our most cost-eÅective means of oÅering certain specialized or hard-to-Ñnd
merchandise that may not be available through our catalogs or destination retail stores. This allows us to
5