Byline: Valerie Seckler

CHICAGO — Seeking to spark sales,, the six-month-old e-commerce site controlled by Kmart, is developing a proprietary brand called BlueLight that will target a younger consumer than the traditional Kmart customer and comprise a range of categories, including apparel.
“The apparel items will focus mostly on basics and will be sold at Kmart stores as well as online at BlueLight,” Mark H. Goldstein, chief executive officer of BlueLight, told WWD in an interview ahead of his opening keynote address at Jupiter Communications’ Online Shopping Forum. “We are aiming at a younger, more techie-oriented customer.”
Kmart’s core customer is a family woman, 25 to 45 years old, with an annual household income of $25,000 to $40,000.
Goldstein did not elaborate further on a timetable or other plans for the new label, during the Internet shopping conference, which concluded here Friday. But he did say BlueLight is set to roll out a full assortment of its merchandise by June 13.
Also slated to be turned on by BlueLight during the spring-summer selling season are:
A loyalty program, anchored by an affinity card that customers will use to accumulate points for various shopping rewards, both online and at Kmart stores.
Linking with the Web sites of those vendors that care to do so.
Launching more than 2,000 interactive kiosks at Kmart stores, through which shoppers will access and shop the Web site.
The addition of products that aren’t carried at Kmart, from above-ground swimming pools that simply occupy too much floor space to be merchandised at the stores, to higher-priced consumer electronics than are offered on Kmart’s shelves.
“We will launch [online] banner ads and lots of signs at Kmart stores as we roll out the BlueLight store over the next few weeks,” Goldstein noted.
BlueLight, which is 60 percent owned by Kmart, opened its virtual doors on Dec. 13, 1999, with a limited assortment of merchandise,and more than $75 million in financing from Softbank Venture Capital, Martha Stewart Living Omnimedia and Yahoo. The entity is based in San Francisco.
The plan to launch the BlueLight proprietary brand and affinity program signals the site’s intent to fully integrate its operation with Kmart’s. Shoppers will find many of the same items online and off, even as the site merchandises some brands and products that Kmart won’t carry at the stores.
It also indicates BlueLight is taking a page from Kmart’s book, as the discounter’s revitalization over the past few years was fueled, in part, by the addition of two other proprietary brands: Martha Stewart home goods and Sesame Street apparel and toys.
So far, lots of lip service has been paid to the benefits multichannel retailers can reap by integrating e-commerce with their other modes of distribution, but few merchants have made the leap. As noted, a recent Jupiter Communications study found that only 21 percent of multichannel retailers in the U.S. have begun tracking their customers across those channels.
“We want to be everyday America’s on-ramp to the Internet,” Goldstein said during his keynote. “The key to our concept is to integrate our operations online and offline, so that BlueLight is everywhere.” Thus, he said, the Web site’s primary target is the Kmart customer, “the 96 million people with annual household incomes of up to $50,000.”
“BlueLight is now approaching two million users,” Goldstein said of the site, which is also a free Internet service provider. “We are currently the fourth-fastest growing free ISP, and our goal is to be the second-fastest growing by yearend; our goal is to have 30 million users in our database this year.”
One of the engines driving BlueLight to fully integrate with Kmart is it’s much cheaper for the site to acquire customers — one of the steepest expenses of e-commerce — via the retail chain’s database than through partner Yahoo. “It costs us about 37 cents to acquire a customer if we find them through Kmart; via Yahoo, it’s about $20 per customer,” Goldstein said.
“Kmart expects $38 billion in sales in 2000, and 87 percent of America lives within six miles of a Kmart store, so we asked ourselves how we can leverage these assets to attract more eyeballs to the site,” he added.
Also in the offing for BlueLight, Goldstein hinted, could be an acquisition of a pure-play dot-com.
When asked about the impact of sinking Internet stock valuations on BlueLight, the ceo said, “It creates lots of opportunities to acquire pure-plays. I know that Target and Wal-Mart also are both looking at that, now.”