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Direct Response Marketing

Field Reports

1 Jul, 2006 By: Thomas Haire, Nicole Urso Response


 

Target Becomes Only Retailer on Top-10 Credit Card Issuer List

 

MINNEAPOLIS – Target Stores Inc. recently became one of the nation's top 10 credit card issuers, joining Chase, MBNA and American Express, according to Advertising Age, becoming the only retailer on that list (Nordstrom is closest at No. 27). The report says that the company's Target National Bank division has 16 million customers for either its Target Visa or Target store cards.

Target's strategy to build a strong credit card operation runs in direct opposition to plans at most retailers. Companies such as Sears and Federated Department Stores have moved to sell their credit card businesses in recent years, according to the Advertising Age story. Some analysts believe Target is using its credit card business to track its customers and create stronger marketing plans to those customers.

The company is also making big profits on the cards, charging up to 23.74-percent interest on balances from its customers. Those balances currently total about $5.6 billion.

Target offers customers an immediate 10-percent discount the day they sign up for a card, plus special opportunities on prescriptions and philanthropic programs that benefit card users' schools.

After seeing Target's success, both Wal-Mart and Home Depot are seeking to form their own banks. Regulators have rebuffed Wal-Mart thus far, but Home Depot recently purchased EnerBank, based in Utah, which could put it on its way to joining Target in the top 10.

 

Harrington's History Portends a Bright Future

 

With more than 20 years in the direct response TV business, Kevin Harrington, CEO of St. Petersburg, Fla.-based Reliant Media Intl., has seen billions of dollars in sales — and almost as many "next big products" come and go. From Ginsu knives to the recent hit show for Dual Drill, Harrington and his brother Tim (president of Reliant) have seen it all. Recently, Response caught up with Kevin Harrington to talk about his many years in DRTV and find out what's new in his corner of the DR universe.


 

Q. Can you talk about the recent consolidation of operations you went through in St. Petersburg?

A. My brother and I moved to St. Petersburg in the mid-1990s for a venture with Home Shopping Network (HSN) called Home Shopping Network Direct. We have loved the St. Petersburg area ever since. Even after that adventure ended, we decided to stay here for a couple reasons. Number one, we loved the area. Secondly, having HSN here, dealing with tens of thousands of vendors on an annual basis, made this a hotbed for products and product development. We have opened a new office across the street from HSN in a building with Tony Little. It's a 35,000 square-foot building, with 20,000 square feet of office space and 15,000 square feet of warehouse space, which gives us the ability to really focus on our hardcore business — product development and the creative processes. That is, finding the products and producing the shows. Also, there is still a tremendous flow of products coming into the St. Petersburg area on a daily basis.

Q. What effect has the reemergence of the Reliant brand, coming out of the joint venture with Thane earlier this decade, had on your business?

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