READ: Federated Department Stores and Eltrax
Federated Department Stores, operator of such industry stalwarts as Macy's and Bloomingdale's, instantly became a major player in the electronic commerce arena earlier this year when it purchased Fingerhut, a direct-marketing company based in Minnetonka, Minn.
With the deal, Federated gained not only an operation to handle the distribution of products purchased over its own Web properties, but also a piece of the booming Internet logistics business and equity stakes in a half-dozen Web retailers.
"We're a little biased, but we think Federated made a brilliant move," says John Buck, president of Fingerhut Business Services. Since announcing its foray into the Internet space in September 1997, Fingerhut has won contracts to perform fulfillment for 22 companies. They include a number of Internet start-ups such as eToys, PC Flowers & Gifts and MountainZone.com, but also a blue-chip list of traditional retailers.
Order a product from Wal-Mart.com, Levis.com or PierOne.com, and that product will pass through one of Fingerhut's three massive distribution centers.
Fingerhut President Will Lansing says Federated's real stroke of genius lay not so much in acquiring the company for its logistics capabilities, but in its customer sales know-how. With 20 years in the direct-mail catalog business, Fingerhut has built up extensive profiles on more than 30 million customers.
Its 9-terabyte data warehouse in Minnetonka contains up to 3,500 attributes per customer.
"We know if you're a pet owner, left- or right-handed, what hobbies you're into - we know a lot about people and how to market to them," Lansing says.
It's exactly these kinds of advantages that will widen the gap between traditional retailers and start-ups in the years ahead, Forrester Research analyst Charlene Li says. In fact, she says, the picture for mom-and-pop operations on the Internet is "dismal."
"Offline, small and medium-sized retailers have a 50 percent share of retail revenues," she says. "In contrast, they are barely capturing 9 percent of Web sales today. The picture is only going to get worse as the 'Wal-Marting' of America continues."
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From: Will 'Dot Coms' Face Revenge Of Dinosaurs?
By Mel Duvall, Inter@ctive Week, September 6, 1999 9:21 AM ET
zdnet.com
May 17, 1999 - ELTRAX ANNOUNCES MAJOR SERVICE AGREEMENT WITH FEDERATED DEPARTMENT STORES.
eltrax.com |
