January 24, 2007, 12:00 AM

The Internet is gaining as Fingerhut’s retail channel of choice

The web accounted for 26% of all sales in 2006 for Fingerhut Direct Marketing, up from 22% in 2005. The direct marketer`s plans for 2007 include purchasing a new product information management system to streamline access to all products via the web.

The web accounted for 26% of sales in 2006 for direct marketer Fingerhut Direct Marketing, up from 22% in 2005. The online sales target for 2007 is pushing 30%, says Brad Smith, vice president of e-commerce and digital marketing for Fingerhut, No. 149 in the Internet Retailer Top 500 Guide to Retail Web Sites.

Fingerhut reports web sales of $82 million for 2006. That’s a hefty 58% increase from 2005’s $52 million.

Smith attributes that growth to a web site redesign launched in September 2006 and improvements in promoting its branded credit card. “We’re benefiting from our overall sales growth rate of 40%, but web sales have exceeded that because of our major redesign of the front-end customer experience,” Smith says.

Results are encouraging. “Our sitewide conversion rate increased 22.8% since the redesign,” he adds.

Fingerhut relies heavily on its credit-based business, the source of most of its sales, Smith says. “The redesign helped ensure the shopper’s web experience is represented by our sales model.”

Fingerhut sells electronics, housewares, home textiles, jewelry and furniture via catalog and the Internet.

Based on past shopping behavior and status as a credit account holder, each customer now sees a customized landing page. “Our customers have a page that takes them directly to their shopping preference,” Smith says. Depending on the customer’s history, each will see different product pages and have a different check-out process, all managed by cookies.

For example, a “mature” customer with a higher credit limit might see more expensive products. “And if the customer already has a Fingerhut credit account we aren’t going to ask them to sign up again,” Smith adds.

Fingerhut’s successful 2006 shows the company has come a long way from its 2001 shut-down by Federated Department Stores, less than two years after its acquisition. New owners bought the name from Federated in 2002 and Fingerhut’s revival has been based on applying new technology to electronic marketing as well as warehousing and other operations functions that have streamlined product ordering and shipping.

The web site redesign was headed by Fingerhut’s existing information technology staff. Information system architecture was aided by Straight Line Theory Inc., and the visual design work assisted by Horizontal Integration, both Minneapolis-area companies.

Fingerhut’s plans for 2007 include purchasing a new product information management system to streamline access to all products via the web. Smith declined to disclose specific vendor names but said rollout is aimed for September.

Other lesser-unnamed--online functions will be added as the year progresses in the name of improving the shopper’s experience and channeling more sales to the web.

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