Customers of First Union Corp. can now buy clothes, electronics, books, and other consumer goods at its ShopFirst.com, a virtual mall with more than 200 retailers.

The $247 billion-asset banking company announced Wednesday that ShopFirst has attracted 5,500 customers since becoming available the first week of September, and that marketing will be beefed up.

First Union said its venture into Internet retailing stemmed from four focus groups it conducted last year. The site is an attempt to provide customers with services they say they want and to increase payment transactions.

Though customers can use a credit card from any bank, the company gives them incentives, such as discounts and rewards, to use its own products.

First Union gets revenue from commissions on sales that it directs to the online retailers or from clicks made by First Union customers on partner sites.

"It is convenient for customers to do their shopping when they know their immediate balances," said Sophia Schell, the product manager for ShopFirst.

Eventually online shoppers will be able to pay for merchandise directly from their First Union checking accounts. "We don't want to have any restrictions around payments," she said.

In 1995 First Union introduced a similar service, called CommunityCommerce, which is no longer in operation. It allowed customers to buy gourmet food items, plan vacations, or purchase tickets to baseball games. CommunityCommerce was built on a platform provided by Open Market Inc., which secured credit card transactions and provided customer service to shoppers.

The number of online shoppers more than doubled in 1999, to 39 million, according to Meridien Research. It predicts that online sales, which were $3 billion in 1998, will reach $130 billion by 2002.

Banks intend to be in a position to cash in on the trend. "By 2004 over one-third of online bank sites will have taken this path, and shopping will become a core service offering of more and more online bank sites," said Jennifer Schmidt, a research associate at Meridien.

Chase Manhattan Bank, Citibank, KeyBank, Bank of America, Wells Fargo & Co., and Internet-only bank PCBanker. com, among others, already have similar ventures.

A December 1999 report from Meridien said Chase Manhattan's ChaseShop had 30,000 merchants, Citibank's Citiplaza 35, CompuBank's eCommCenter 400, and KeyBank's Marketplace 31.

First Union wants to add more retailers to ShopFirst and will expand its marketing with direct mailings, branch promotions, and fulfillment kits for new online banking customers. It also plans to use ShopFirst rewards to help attract and retain customers, Ms. Schell said.

First Union, based in Charlotte, N.C., has entered into an equity relationship with Adhesion Technologies, which provides portal software that can be customized to manage relationships with retail shops, reward programs, and mall operations.

"This will be a wave of the future, because banks are facing a tremendous amount of pressure from sites, such as Yahoo, that also offer shopping services and are beginning to look like a bank," said Kim Westmoreland, senior vice president of Adhesion.

He said other, undisclosed financial services companies have committed to work with Adhesion.

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