Sunday, June 18, 2000
Kmart setting pace for online shopping
By Charles E. Ramirez
Detroit News
TROY, Mich. — Kmart Corp.'s sales and profits continue to lag behind arch-rivals Wal-Mart and Target.
But there's one place where the Troy-based discount chain looks like it's on the cutting edge — the World Wide Web.
BlueLight.com — Kmart Corp.'s San Francisco-based online subsidiary — increasingly appears to be the model of online shopping for the future: get backing from a company with deep resources and staying power, expand services while increasing popularity.
“We know there is tremendous potential in terms of customer acceptance and customer preference through e-commerce,” said Floyd Hall, Kmart's former chairman and CEO. “From the beginning, our goal has been to pursue a "Best of the Best' strategy by developing a site that truly reflects a vision of what Internet shopping will be in the century ahead.”
The appointment of Charles Conaway as his successor bodes well for BlueLight.com. He developed CVS' Internet strategy and was in charge of the drug store chain's e-commerce business.
BlueLight.com, which was launched in December at www.bluelight.com, offers consumers free Internet access. By March, the company signed up 1 million subscribers for the service. It said this week it had doubled that number, and it is hoping to add further to its subscriber base by distributing 8 million copies of BlueLight's Internet access software at Kmart's 2,171 stores.
This summer, the e-retailer will roll out an online store, which it expects to stock with 100,000 items — about three times the amount of goods available at a Kmart bricks-and-mortar store — by fall.
The company hopes to make an initial public offering this year, too.
Some industry experts aren't as optimistic about BlueLight's potential as Kmart is, though. “BlueLight really hasn't gotten started yet,” said Jeffrey Edelman, a retail analyst for PaineWebber Group Inc. in New York. “We'll have to wait and see where it goes.”
Pam Stubin, a retail analyst with Ernst & Young in New York, said Kmart isn't really doing anything new with BlueLight.com.
“Every retailer has a Web site, and they need one to stay in the game,” she said.
“Kmart may be in the lead in the sense that its site is relatively glitch-free, but the competition is working to improve their Web sites, too. What it's really going to come down to is how well retailers can execute their online game plans.”
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