MINNETONKA, MN. – After a successful test drop of 80,000 catalogs and multi-mailers in the UK last fall, Fingerhut is dropping another test mailing of 80,000 this month and plans to roll out 1 to 2 million books later this year.
“We're very happy with the test (see DMI Sept.8 1997, p. 7)” Pete Michielutti, Fingerhut's COO, said. “We learned what worked and what didn't and our response rate was higher than we expected.”
This month's mailing, he added, “will pull back on multi-mailers and do more catalogs” since response from the book was stronger.
“We took our general merchandise catalog and compared it from a product standpoint with what was available in the UK and then took out some products that we felt wouldn't work in Great Britain.”
The catalog was geared to the domestic and houseware side of the Fingerhut product mix, “rather than anything that has plugs on it. As we start mailing more we'll start sourcing products with UK voltage on them.”
Fingerhut hired Sterling Marketing, a British DM firm, to help launch its UK drive with market research, sourcing of lists, finding other services like call centers, and vetting the creative.
“We did most of our creatives here in Minnesota and used Sterling to make sure that we complied with British laws and that we referred to things properly.” That, he added, including anglicizing some of the US copy.
“Pricing was competitive with UK prices and interest rates. What we do very well is offer credit and our credit terms are even a bit lower than the British norm.” The catalog lists prices in pounds sterling.
Sterling helped Fingerhut with lists, tapping the rapidly growing Experian concern. That company recently changed its name from CCN. It is active in the US as well as in Great Britain.
Michielutti said it was too early to tell how well the lists would do in the future “but based on the response rate we're pretty happy with them. They met our expectations.”
Orders are taken by operators at Salestrack, a British call center and some other customer services are also being outsourced but for now Fingerhut will fulfill from its warehouse in St. Cloud.
“We are trying to do most everything from here in order to keep our cost structure low but as we build up scale and can justify having an infrastructure in the UK we will do that.”
For now Fingerhut is using USPS' Global Package Link which has “worked very well for us. They deliver on time and we are satisfied with it.” However, the company will “look at them and at other alternatives. Some carriers are looking to expand globally and we will look at them.”
Fingerhut plans to expand into other foreign markets as well. “We plan to launch a small test in Argentina in the next 30 days or so. And we may look at Germany from a test standpoint later this year.”