Cabela's 2012 Annual Report Download - page 16

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growing significantly. As a result, we continue to utilize best-in-class technology to improve our customers’ digital
shopping experience and build on the advances we have made to capitalize on the variety of ways customers are
shopping at Cabela’s today. We have seen early successes in our social marketing initiatives and now have over
2.2 million fans on Facebook. Our omni-channel marketing efforts are resulting in increased customer engagement
across multiple channels and a more consistent experience across all channels. Our goal is to create a digital
presence that mirrors our customers’ in-store shopping experience. Also in January 2013, we opened an office in
Westminster, Colorado, to attract high quality talent to improve our website, social media, and mobile applications.
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. Many of our
customers read and browse our catalogs, but 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. We also utilize our marketing knowledge base to determine optimal circulation strategies to control
our catalog costs while continuing to grow our merchandising business.
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 over the years and serve as an important marketing tool for our Retail
business. In 2012, we mailed more than 132 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.
Our direct marketing processes have been heavily driven via the catalog production cycle and most of our
current marketing efforts are event based and heavily focused towards print media. Changing to a more customer
centric focus will allow us to better exploit on-line engagement opportunities, embrace new marketing strategies,
and bring synergies to the Internet channel which inherently has quick-to-market attributes that we have not fully
capitalized on. 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.
Financial Services Business
Through our wholly-owned bank subsidiary, World’s Foremost Bank (“WFB,” “Financial Services segment,”
or “Cabela’s CLUB”), 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, including the redemption of points, approximated 29% for 2012. The primary purpose
of our Financial Services segment 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 one hundred thousand dollars or more. Our bank does not accept demand deposits or make non-credit card
loans. During 2012, we had an average of 1,537,209 active credit card accounts with an average balance of $2,014
compared to an average of 1,416,887 active credit card accounts with an average balance of $1,937 during 2011.