Fingerhut realized that 15% of its sales came from Hispanic consumers. It tested a new marketing strategy focused on Hispanics in Puerto Rico, which was successful. As a result, Fingerhut plans to expand this "pull" strategy targeting Hispanics to the top 10 Hispanic markets in the U.S. The pull strategy involves building Fingerhut's own customer list through Spanish media advertising rather than direct mail solicitation, since most Hispanics are missing from available lists. Fingerhut faces the challenge of getting Hispanic shoppers accustomed to catalog buying and purchasing on credit.

1. Fingerhut initiates the 'pull' strategy to reach Hispanics
When catalog retailer Fingerhut Cos. realized that 15% of its $1.6 billion 1998 sales came from
Hispanic consumers, it responded by testing a new marketing strategy in Puerto Rico and plans
to expand that effort to the rest of the U.S. early next year.
Parent Federated Department Stores mandated the aggressive effort as part of its foray into the
consumer catalog market. The Direct Marketing Association's Economic Impact Study estimates
the consumer catalog business at $57 billion in 1998. Fingerhut mails more than 4 million
general-merchandise catalogs in the U.S. -- but it's expanded Hispanic outreach will be filled with
challenges.
PULL STRATEGY WORKS
Traditional "push" strategy -- soliciting new direct mail customers by stuffing their mailboxes --
won't work in the Hispanic community, since most of the 31 million-person group is missing from
available lists. Instead, Fingerhut is using a "pull" strategy, the standard fodder for advertising and
PR agencies, said Rafael Saldana, VP-general manager of Hispanic Business. Mr. Saldana is
charged with expanding Fingerhut's U.S. business to the Hispanic market and then into
Argentina, Chile, Colombia and Mexico.
"We will have to build our own list" by advertising through Spanish media, Mr. Saldana said, and
the company's Puerto Rican pilot has proved successful. After a three-week advertising test in
San Juan using TV, print, outdoor and radio, the company had to hire 100 additional operators to
handle the influx of calls. The results of the in-house advertising effort support Fingerhut's
decision to expand into the top 10 Hispanic U.S. urban markets next year.
Fingerhut's challenge is to enlist new consumers from a community of shoppers unaccustomed to
catalog buying.
"The fundamentals of a mail-order industry are not there in Latin America -- a reliable postal
service and easy credit," Mr. Saldana said. "We will have to get them excited about buying
through mail order on credit. A big part of our play is education."
NEW CALLING CENTER OPENS
To add to its 120 bilingual operators in its office in Tampa, Fla., Fingerhut is building a call center
in Tucson, Ariz., to handle the 20% to 30% growth in Hispanic customers this year.
Fingerhut's pull strategy will prove effective, predicts Ricardo Lopez, president of Hispanic
Research, given that Hispanics' story-telling communication methods make traditional
direct marketing ineffective.
"Marketers that know how to communicate to the Hispanic consumer know how to build trust. You
don't do this the traditional way by sending a formal letter," Mr. Lopez said.
Copyright © 1999 Crain Communications Inc.