Why Cabela's Has Emerged as the Top Omni-Channel Retailer

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Why Cabela's Has Emerged as the Top Omni-Channel Retailer

By Adam Blair & Nicole Giannopoulos - 04/03/2012
Despite years of work by many retailers to become truly effective in omni-channel retailing, the general consensus is that no one has yet done it. In other words, no retailer is as good as Amazon is in digital retailing, as good as Walmart in brick-and-mortar retailing, and also has fully synchronized IT systems on the back end. Except for one retailer: Cabela's. Several years into a massive omni-channel tranformation, Cabela's continues to rack up big sales gains and simultaneously keep its foot pressed on the gas pedal by investing in a broad agenda of omni-channel IT projects.

In baseball, the classic advice to batters is to "hit 'em where they ain't." Cabela's has learned, and re-learned, how to hit 'em (customers) where they are, no matter where that is at any given point. The iconic outdoors and sporting goods retailer has been advancing on multiple fronts to make each of its channels (stores, online, catalogs/call centers, social and mobile) a more useful, more relevant part of its customers' shopping experiences. Perhaps more important, Cabela's has become one of the few companies that is operating as a true omni-channel retailer.

Cabela's recognizes that customers' non-linear purchase patterns means that they are using different touchpoints for different parts of the shopping process – so that what may look like a lost sales opportunity in one channel can actually be the prelude to a sale in another channel.

"Cabela's, the world's foremost outfitter, has identified customers who may look at a product online, even putting it in the shopping cart but then removing it several times before going into a store and making a purchase," notes Jeff Tanner Jr., PhD, associate dean of the Hankamer School of Business at Baylor University and a partner in BPT Partners. "Depending on the product, a shopper may place it in the cart as many as three times on average before purchasing."

A recent presentation to Wall Street analysts by Cabela's executives explained the many initiatives and IT tools Cabela's uses to make omni-channel retailing a reality:

Letting Customers Speak Via Social Media: The retailer implemented a Bazaarvoice program called Ask & Answer; over 27,000 questions have been submitted. While 15,000 have been answered by a Cabela's online outfitter, 12,000 have been answered by other customers – a process that further creates customer engagement.

In addition, Cabela's Facebook page has approximately 1.5 million "friends" and "Likes". Its audience of hunters and fishermen is extremely engaged, posting photos of trophy catches, sharing successes in the field, talking about opportunities, product recommendations and items they love. Cabela's is also more involved with YouTube than most multichannel retailers, providing how-to videos, specifically explaining some of the technology used in Cabela's products.

Multiplying Mobile Apps: Cabela's has three mobile apps. One translates Cabelas.com to the correct specifications for a smartphone; a second is a shopping app. The Recon Hut app includes GPS technology. "This will help you as you go out on a hunt to track where you've been," said Cabela's chief marketing officer Scott Williams. "You could drop pins based on where you sighted a deer, where you tracked it to, etc. We think it's an exciting opportunity that not any multichannel retailer would have, something that has that fun experiential piece along with a shopping app."

Optimizing Store Inventories and Pricing: The retailer reduced its SKU count by nearly 10% in 2011, according to chief merchandising officer Brian Linneman, in part by implementing JDA allocation and demand forecasting applications. "We made significant gains in improving inventory productivity through better preseason planning and end season management. This increase in precision helps us generate visibility into both sales [and] margin opportunities that perhaps today we might not be able to see.

"In addition, we're implementing a price optimization tool that will be deployed in late 2012," Linneman added. "This will give us leading industry tools for a better initial price setting, markdowns and promotional pricing of product. And lastly, we'll roll out a net SKU profitability project midyear that will give us a much better insight towards assortment profitability, leading to the rationalization and improvement of gross margins."

Making Endless Aisle Inventory Available in Smaller Stores: Cabela's is replacing its existing store kiosks with new, more reliable and easier-to-use models. The retailer's recently announced Outpost stores, which will feature smaller footprints and a more limited merchandise selection than Cabela's traditional stores, are expected to have higher levels of kiosk sales across the retailer's entire assortment.

Streamlining Digital Sales: The majority of Cabela's direct (non-store) business is from its Cabelas.com website; it's "well past 50%," according to CMO Williams. The retailer has done "a lot of hard work in what we call site planogramming. That's literally taking the site and breaking it down, category by category, usability, site navigation – literally the tabs and navigation at the top."

Cabela's is also using remarketing tools. If a customer that has visited the site but, for whatever reason, has not purchased something, at a subsequent site Cabela's can offer this customer a relevant banner ad. Cabela's also leverages a strong e-mail database to drive traffic for Cabelas.com as well as multichannel traffic.