Retailers to battle in cyberspace
By The Associated Press
Last Update: 12:34 PM ET Nov 2, 2000
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NEW YORK (AP) -- When it comes to e-commerce, traditional discounters are no longer waiting in the wings.
After several failed makeover attempts, Wal-Mart Stores Inc. (WMT: news, msgs) , the world's largest retailer, is making a big play to be as much of a powerhouse online as it is offline, reopening its newly renovated site Tuesday.
__ A projected 51 percent of all American households are expected to be online this year, up from last year's 45 percent.
Jupiter Communications
Meanwhile, Target Corp. (TGT: news, msgs) unveiled its own redesigned site last Friday, boasting better graphics and an improved search engine. And Kmart Corp. (KM: news, msgs) this week officially flashed its Bluelight.com site, after quietly launching it in June.
With an increasing number of mainstream consumers becoming Web savvy -- a projected 51 percent of all American households are expected to be online this year, up from last year's 45 percent, according to New York-based Jupiter Communications -- these discount behemoths aim to seize a larger share of the e-commerce pie.
Their big push for online shoppers comes as e-tailing veterans like Amazon.com Inc. (AMZN: news, msgs) and EToys Inc. (ETYS: news, msgs) have been pounded by investors, while a slew of other online operations have shut their doors.
Slow online traffic
But these traditional discounters have much catching up to do. Despite its stock trading 68 percent off its 52-week-high, Amazon.com has dominated customer traffic on the Web, attracting 14.3 million people to its site just in September, according to Jupiter's Media Metrix.
The other three discounters are far down on the list. That same month, Kmart's Bluelight.com measured 2 million customers, while Target.com attracted 1.5 million and Walmart.com drew 1.4 million.
But Wal-Mart, Kmart and Target officials say they aren't worried, counting on their household brand appeal to win over customers online.
Take, for example, Karen Bakos, a 38-year-old Manhattan resident, who is a loyal Amazon shopper, but is open to shopping online at Kmart and the like because of its reputation for affordable pricing.
"If the sites are easy to use, then I would definitely use them," she said. "I just had a baby, and it's hard to get out. I would buy toys and clothing."
__ "I was able to shop for something as obscure as an air mattress. There were three to choose from. It was efficient."
Sharon Allen,online shopper
Sharon Allen, 32, also from Manhattan, never shops online, but used Bluelight.com to do her research to buy an air mattress, which she then purchased at a nearby Kmart. That opportunity is something that Amazon and its other pure e-tailers cannot offer.
"I was able to shop for something as obscure as an air mattress," she said. "There were three to choose from. It was efficient."
Unified business
These discounters make it clear that they see their online and offline businesses as unified, using the stores to advertise the sites through circulars and signage. All three boast that customers can even return unwanted merchandise to their local store, a service that not many e-tailers offer. The Troy, Mich.-based Kmart is in the midst of rolling out Web kiosks in 1,600 out of its 2,000 stores by Thanksgiving, according to Mark Goldstein, chief executive officer of Bluelight.com.
To help expand Internet access to more of their customers, all three are distributing Internet software in their stores. In fact, Bluelight.com has so far signed up nearly 5 million subscribers to its free Internet service, Goldstein said. The company is even offering $450 PCs under its Bluelight label.
Still, each discounter is trying to carve out its own niche. For example, the Minneapolis-based Target says it doesn't want to be caught dead in promotional wars, so it isn't carrying books or CDs.
Instead, Target is limiting its online offerings to 15,000, with a focus on trendy and profitable items like Phillips toasters and Michael Graves house wares, according to Jerry Storch, president, financial services and new businesses.
Kmart is a hybrid of both, mixing such basic products as baby strollers with image-brand items like Martha Stewart sheets. Bluelight.com is now selling 300,000 items, up from 50,000 in June, Goldstein said.
__ "We want to revolutionize e-commerce on the Web."
Jim Breyer,Accel Partners
Then there's the Bentonville, Ark.-based Wal-Mart, whose 4-year-old e-commerce venture has been rather rocky.
"We want to revolutionize e-commerce on the Web," said Jim Breyer, managing director at Palo Alto, Calif.-based Accel Partners, which joined with Wal-Mart Stores in January to form Walmart.com, moving its offices to Menlo Park, Calif.
The latest makeover is being spearheaded by Jeanne Jackson, chief executive officer of Walmart.com, who came on board in March.
"It's just a refreshening. We are trying to clean it up," said Jackson. She added that the closing of the site was necessary to shift to speedier technology.
The makeover includes revamping the search engine to make it easier to find any one of 500,000 items, adding sharper graphics, and scrapping a lot of the "impulse" products that are under $5, like 99-cent Bic pens and Windex.
Instead, Wal-Mart has expanded such categories as toys, electronic gadgets, and other gift items.
But Breyer cautioned that Walmart.com's dramatic change in fortunes isn't going to happen overnight. "We are looking at this as a five-to-ten-year process," he said
