Photos: Bass Pro, Cabela’s
Should Bass Pro retire the Cabela’s name?
One option Bass Pro is exploring in its mega-merger with rival Cabela’s is integrating both company names.
“On the exterior of the store, we would put up the Cabela’s name and really get after it,” Johnny Morris, Bass Pro’s CEO and founder, said at a meeting at Cabela’s headquarters in Sidney, NE about a week after the merger was announced on Oct. 3. Omaha World-Herald obtained a recording of his chat with a group of Cabela’s employees.
A Bass Pro spokesman afterward indicated that merging nameplates is one of many ideas being explored. The merger isn’t expected to close until 2017.
A follow-up article by the World-Herald discussed some of the other options Bass Pro could be exploring. One is operating Cabela’s as a separate business, although Mr. Morris told Cabela’s employees that the two chains would combine strengths. For instance, Cabela’s hunting and camping merchandise would integrated into Bass Pro’s stores while Bass Pro fishing and boating gear would be featured in Cabela’s existing stores.
Another could be in-store Cabela’s shops focusing on hunting, camping and Cabela’s-branded apparel.
In most cases, the buyer (Bass Pro) would retire the seller’s (Cabela’s) name. Integrating the nameplates could possibly serve as a transition to one name. The merged company could tap a number of efficiencies focusing on one banner, including combining marketing on a national level.
One challenge in this merger is that it is debatable in hunting circles whether Cabela’s or Bass Pro is the stronger nameplate. On hunting blogs, many Cabela’s fans are already vowing not to shop at either store anymore.
Perhaps the most controversial banner changeover was Macy’s move in 2006 to convert many of the regional nameplates acquired in its May Co. merger, including removing the legendary Marshall Field’s name for Macy’s. The loss still resonates. A Chicago Tribune article in late June on the impending retirement of Terry Lundgren, read, “Macy’s CEO who killed Marshall Field’s to step down next year.”
- Legendary Outdoor Brands Bass Pro Shops and Cabela’s to Combine – Bass Pro/Cabela’s
- Bass Pro says it will keep Cabela’s brand alive — but for how long? – Omaha World Herald
- Bass Pro CEO says he won’t make ‘false promises’ that all jobs are safe at Cabela’s Sidney headquarters – Omaha World Herald
- Bass Pro is Moving Forward with Buying Cabela’s – Outdoorhub
- Macy’s CEO who killed Marshall Field’s to step down next year – Chicago Tribune
Discussion Questions
DISCUSSION QUESTIONS: What factors should guide whether to retire or integrate nameplates as a part of retail mergers? What advice would you have for Bass Pro?
Poll
BrainTrust
Dave Wendland
Vice President, Strategic RelationsHamacher Resource Group
Mohamed Amer, PhD
Independent Board Member, Investor and Startup Advisor
This one is easy. Bass Pro should refrain from changing Cabela’s name until thorough focus groups among the typical outdoor/hunter constituency have been conducted to determine brand recognition and, therefore, value. On this one, there may be sufficient numbers of loyal Cabela’s customers who identify with that brand that would make it a mistake to subliminally disenfranchise them by changing names.
This happened in Canada when Best Buy acquired electronics rival Future Shop in 2001. In that case, both brands operated simultaneously until finally in 2015, the Future Shop banner was consolidated into Best Buy. The initial theory was that best Buy offered a non-commission, low sales pressure environment, whereas Future Shop was more a of sales/commission-focused environment. However, both banners carried substantially the same product lines and the inefficiencies were obvious — they operated large stores often in close proximity to each other, and they virtually duplicated their considerable weekly advertising spend.
Unless the banners are substantially differentiated, operating two banners in the same space can create inefficiencies and confusion in the market. Both Bass Pro and Cabela’s banners have value, but it would be in the best interest of the enterprise to consolidate into one or the other nameplate.
My two cents. Operating as two separate banners could present a risk for Bass Pro Shops and put stress on advertising, message development and the maintenance of separate value propositions. However, loyalists (especially hunters who strongly favor Cabela’s) will not be too fond of a complete renaming.
So what is my recommended path forward? Bass Pro Shops will have to be the lead banner with a store-within-a-store concept that communicates a “Cabela’s Inside” stance. Hopefully this will satisfy the loyalists while attracting new shoppers to the original Bass Pro Shops locations.
Either way, mergers of this sort take patience, finesse and perseverance on the part of management, staff and customer bases.
I think it’s arguable that Macy’s made the right call over the long haul as the only traditional department store with a national footprint. It was important to create brand equity for the “Macy’s” name instead of trying to support a bunch of nameplates with regional appeal. (Bon Ton Stores, on the other hand, decided that “localized” brand identity was a better tactic.)
In the case of Bass and Cabela’s, I think both brands are worth maintaining. These are superstores usually drawing from large trade areas and not necessarily in direct competition with each other — and both companies with loyal customer bases. There is no point in shutting down the Cabela’s brand in the short-term when there will be plenty of other merger-related challenges to deal with first.
Bass Pro has to carefully evaluate all its naming options. The process should be business- and not ego-driven. Bass Pro has the right to pick whatever name format it wants, but then will either enjoy the benefits or suffer the consequences depending on its choice. The process it uses to communicate the “why” will also be important to the very loyal Cabela’s customer base.
Here in Chicago we have seen several iconic names disappear after acquisitions. The article mentions Marshall Fields, another was Dominick’s supermarkets. Neither shopping experience was ever the same.
Obviously one of the advantages of most mergers is the internal efficiencies that come with the integration of organizations. Redundancies can be eliminated and economies of scale on operations achieved. However, unless there is a compelling reason to change the name on the door, don’t do it. In this particular case, it appears as if each brand has legions of dedicated consumers that would not perceive any benefit to a combined name. A combined name does not necessarily translate into a sum greater than its parts. However, it does dilute the individual brand name that gave rise to the differential advantage of each.
Keep it simple. The strength of the brands in the mind of consumers should be the major criteria in the decision.
My advice is to not repeat the Macy’s changeover model applied to the regional brands it had acquired. Benefits of M&A in retail (and generally for consumer-facing industries) should be on more efficient back-office processes, sourcing, buying and improved assortments/services.
There is a lot of goodwill in place for each of the brands here: Cabela’s and Bass Pro Shop. You don’t want to dilute that value by eliminating a nameplate unless one has significantly more mindshare with the consumers in the markets in question. In today’s story that is not the case and ignoring this point may plague the deal’s financial expectations for years to come.
This question is complicated. Bass Pro isn’t the best name on its own merit — because it is a narrowing name that, at some point, will make it harder to adapt and maneuver. Cabela’s has the breadth in the name to be more things. Yet part of the market and all of the trade channel knows that Bass Pro made it but Cabela’s didn’t.
A firm decision will take considerably more market information than I have. But my instinct is they should be combined in some way. Perhaps a transition period where Cabela’s becomes “Cabela’s, a Bass Pro company.” And over time, perhaps the Cabela’s name could be brought inside Bass Pro to label their hunting and camping sections.
But here’s the truth to remember: Names and consumers don’t change quickly. After more than a decade I still tell people I need to go to “Kinko’s” then drive to the FedEx Office store.
So there is no reason to rush the choice — although ego often wants to. It’s a critical decision. Experimentation and research can offer tremendous insight to guide decisions. Best of all, regardless of when name changes might happen, Bass Pro can get all the merger benefit in infrastructure.
I say check egos at the door and make it Cabela’s Outpost. It’s the best of both worlds and is inclusive so that it does not alienate any customer. So what that Cabela’s is the one being bought? Customers first!
My advice is very simple: Clarity.
Build preference and value in ONE brand. Do you want to see an example of a terrible acquisition and merger that missed the idea of single-minded purpose? Sears/Kmart.
No need to say another word.
Looking at all of the opportunities, and risks, of merging brands, consolidating the names into a single brand offers relatively low value to shoppers. What is more critical is to have a strategic plan around the buying and merchandising of products, and to avoid cannibalism at all costs. Once one brand starts to eat its young (i.e., Brand A pilfers the best selling products from Brand B), the downward spiral starts. Bass Pro and Cabela’s should instead focus on a strategic merchandise and marketing strategy, then position the brands to add the most value for customers.
This is an issue easily resolved over time. Bass Pro has a great name among fisherman but not that much equity with hunters. The inverse is true of Cabela’s. While there’s no doubt an argument can be made for economies of scale in advertising, the savings might come at a huge cost in terms of brand equity. I’d keep both banners active and then phase one or the other out over time. The first goal ought to be to make sure each brand retains its equity and customer base. Integrating those bases and enjoying the anticipated benefits ought to come only after they are protected.
Knowing them both well, the Cabela’s image needs to be maintained due to the upper-market areas that they address in fly fishing and in collectible firearms. Certain lower volume Cabela’s stores could be shifted to Bass Pro with an internally-named Cabela’s department — Like Cabela’s Fly Fishing (merge Bass Pro products into this store-within-a-store and Cabela’s Apparel and Cabela’s Firearms …).
This is not my area but if it’s not broke, don’t fix it. Many of my Hmong and Thai war vet friends from the Vietnam era who have relocated to upper-Wisconsin and Minnesota rave about Cabela’s. Bass Pro has never been mentioned.
I happen to live in Nebraska where Cabela’s was founded. There are deep historic roots with loyal Cabela’s customers throughout the western U.S. A name change should be not be taken lightly. As many have suggested, there is a need for real consumer research.
While there are arguments for evolving to one brand, there are also some real success stories of mergers operating under multiple brands. GameStop Corp. operates under the GameStop brand as well as EB Games and Micromania.
Retail category consolidation over the past 20 years provides plenty of examples. All of the national big boxes were built via acquisition. Some worked and some didn’t.
Macy’s hasn’t worked because of assortment. Many of the acquired chains offered broad and deep assortments from luxury to bargain. Macy’s, due to its sibling Bloomies, only offers the middle and bargain tiers of selected categories. The shopping experience was severely challenged. This is especially true in Chicago.
Alternatively, The Home Depot was a much better experience than Builder’s Square/Hechinger. THD had the superior selling model and thrived.
So Bass Pro needs to ensure it fully understand the market relationship with Cabela’s selling model aka the five Ps (product, price, place, people and promo) before changing the identity. More importantly is to sort out the corporate culture of the acquisition, identify the pressure points and adjust accordingly as it recasts the “newco.” Lousy morale results in ineffective store support and that can crater the brand experience.
As so many have said over the past 20 years, “retail ain’t for sissies!”
Why did Bass Pro buy Cabela’s? To expand their customer base in additional areas? If so then different groups of consumers are loyal to each name. Eliminating one of the names runs the risk of losing one or the other groups. Using one name and just integrating Cabela’s products in the store does not help retain consumers of Cabela’s. for the short-term the stores need to be Bass Pro-Cabela’s. Over time “Cabela’s” could be dropped if consumers from both groups start shortening the name to Bass Pro.
Many things will come into play when these decisions are being made. Yes, Bass Pro will have the “muscle” because they are the merging leader. I agree that in most cases the stronger name in the industry and on the street is usually the survivor. But that does not necessarily mean the Bass Pro name will or should be the survivor. I have no skin in this game so it does not make a difference to me. I am not a hunter or fisherman.
Several years back Nextel and Sprint merged with Sprint’s name being the survivor. But it took months of meetings to make the decision. Once it is made and announced there is no going back. I do not think operating under both names would be the most prudent thing. There would be too many duplications in areas like advertising and accounting that should be combined to offer the efficiencies needed.
Lots of great comments here, but one I am shocked is missing so far and another common theme I will take some small exception with. With all the talk of the Macy’s/Field’s integration model, I’m surprised there has been no mention of the most successful integration model in retailing — Kroger. Kroger buys strength and then looks to integrate as much synergy as possible into maintaining that strength, not destroying it. Part of that is avoiding geographic overlap with their acquisitions but that can also apply to avoiding brand appeal overlap. A lot of this business is catalog/online these days, so overlapping shoppers is inevitable. But until the recent spate of store expansion by both there was little geographic overlap in their brick-and-mortar footprints. It was Cabela’s to the West and Bass Pro the the (South) East with the assorted Gander Mountain and Academy Sports thrown in between.
As a lifelong customer of both brands, I simply don’t see the differentiation between hunting and fishing that others have mentioned. My best fly rods are from Cabela’s (not counting the Orvis rods of course!). And I have bought hunting gear of all manner, including firearms, from Bass Pro.
So, my bottom line would be to manage the two brands in brick-and-mortar — initially. Begin the merger of the brands online — focusing Cabela’s on hunting/camping and Bass Pro on fishing if that seems right is fine. But do it gradually. Maintain the separate store geographic footprints and clean up the small overlaps recently created. Only combine store nameplates when and if the online combination becomes accepted — maybe in as long as 10 years.
I think it’s clear that Bass Pro Shops should continue to run its acquired Cabela’s stores under their own banner for the time being. I just took a look at the store maps on both their websites and there are more non-overlapping areas than not.
While they get on with the considerable behind-the-scenes work of integrating their systems and strategy, Bass Pro should carefully study its overall branding proposition. Is a banner associated with fishing appealing to hunters and campers? Is its Outdoor World banner a better umbrella than either Bass Pro or Cabela’s when contemplating a national brand push?
And — thinking back to what I think was a missed opportunity for Macy’s when it absorbed Marshall Field’s — how well would Bass Pro and Cabela’s serve as own-label brands for the products it sells?
I say they should look hard at their private label strategy and build a refreshed national brand image around Outdoor World. That’s a three-year plan, if they do it right.
Long term, I don’t see the benefit of maintaining multiple retail store brand names. That said, Johnny may disagree given that he’s been maintaining many other retail store brands including Outdoor World, Worldwide Sportsman, Stick Marsh Outpost, etc.
Despite the confusion all these names might have created, Bass Pro’s clear dominance as a category killer has enabled enthusiasts to basically ignore the sign on the building and call it “Bass Pro” (regardless of what the sign says).
Still, I don’t think all these names are helpful because they essentially splinter and complicate Bass Pro’s investment in branding, signage, and all sorts of other things. I’d recommend transitioning to a single retail brand name that transfers existing goodwill from the other names. This could be done in a 2-step process:
1a) Immediately put a Bass Pro Shop inside each Cabela’s.
1b) Immediately put a Cabela’s shop inside each Bass Pro Shop, Outdoor World, etc. (similar to their Orvis shops).
2) As stores are refreshed, standardize on a single retail store brand name (I don’t think it matters too much which one they pick, but I tend to prefer Cabela’s since it’s a shorter name and doesn’t pigeon hole the retail concept as much as a fishing store).
It is clear that the Cabela’s name has equity among certain segments of their customer base. In order to avoid hemorrhaging customers, Bass Pro should maintain the Cabela’s name for the time being and research the best way to integrate the two names over time. Cabela’s does have a hunting franchise that would be valuable to Bass Pro and the company should be careful not to damage the franchise they just finished paying for.
As an avid outdoorsperson, extensively using both Bass Pro and Cabela’s products over the years, it would dilute and confuse consumers to not use the two names together. I don’t care if one specializes in one type of product more than the other, I don’t want to have to stop and think which one has what I need; I just want to think of them (together) as the “go to” sporting goods and accessories vendor.