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Date Posted: 19:05:13 04/14/02 Sun
Author: Denesie
Subject: to starr from deneise

Blue-Light, an Internet site 60% owned by Kmart Corp., is increasing the number of Kmart products it offers on-line to about 65,000 from 1,250. It also plans to boost the number to100, 000 and hopes to feature millions of items from the discounter. Kmart expects a strong revenue flow to help its e-commerce business break even, and achieve profits by the end of 2001. Blue-Light aims to draw Kmart customers with free Internet access. (Business Week, 2001)
Kmart and other discounters are hoping that the convenience of the Internet along with low prices will expand their customer base to higher-income households. Blue-Light says subscribers so far have used the site mainly for e-mail, chat rooms, and shopping from other retailers on Yahoo! Inc. The most common visitors to the site were married women in their mid to late 30s. Kmart finds that pricing is even more important on-line than off. Kmart launched its first e-commerce site two years ago, but in many ways it is starting form scratch with Blue-Light.
K-mart invested $55 million dollars into Blue-Light.com. Blue-Light currently has 7 million Internet customers, and the company hopes that the numbers will increase. The website now features 240,000 items, which is 175,000 more than the expected 65, 000. Instead of keeping the free Internet access as when Blue-Light first started the store has to now charge it�s customers for their time spent on the Internet because of the financial problems that they face. K-mart even with their current financial situation, they still expect profits to rise up to $100,000 million by the year 2005. (Information Week, 2001)
Currently the Online sales are surpassing those of the in store sales. In-store sales are now only 34% of K-mart sales. The website also features far more items than In-store. The items available in store are 70,000 compared to on-line, which is 240,000 items. K-mart expects that the online sales will continue to out number the in store sales with the closing of more than 280 of its stores. However there will be an increase in in-stores sales with the liquidation of the closing stores, which is expected to pull in $500 million for K-mart.
K-mart also tries to increase sales by fusing online and in-store access. Kiosk content is expected to attract traffic for the retail outlet and Web site as well as carry out other services. EDR Corp. has grown by helping businesses communicate internally and with their customers through the seamless integration of electronic media technologies. They help to install computer kiosks in a portion of Kmart stores. Kiosks are regarded as the low rent customer service desk for Web sites of companies.
Kiosks are interactive purchasing area, which allows customers to order products and services on a touch-screen computer terminal. Kiosks are a part of the Kmart solution center. This system makes the purchasing process much more convenient and easy for the customer. Kiosks help consumers find products in another store in the same chain; they also give retailers a backup in case products aren't on the shelves but can be shipped from a distribution center. In addition to listing the physical and virtual inventory, kiosks may also contain side-by-side comparisons of product types and pricing information from competing retailers. Kiosks also have been outfitted with gift registries, replenishment lists, affiliated services, and frequently asked questions--anything to automate customer-service functions in an era when the cost per transaction for a live person to service a customer can get very expensive. Five months after Kmart installed 3,500 kiosks throughout the US, it reported that 20% of BlueLight.com shoppers came from inside Kmart outlets. Customers who shop both on line and in stores spend 22% more than those who only buy from outlets, which suggests that kiosks also make good business sense for retailers. Online sales, including those from kiosks, typically have higher margins than sales from other channels. Kiosks give retailers more insights into their customers' shopping habits and desires. And they help customers learn more about a dishwasher, a table saw, or a bassinet, essentially qualifying themselves for the purchase before setting foot in the appropriate department or store. (Chicago Tribune, 2000)
Kmart planned spending about $2 billion in over two years on technology and infrastructure improvements. It hoped to cut the time customers spend in checkout lines by 20%, improve customer relations and inventory management and reach Black and Hispanic consumers in Urban areas. (New York Times, 2000)
Unfortunately, with the current financial situation that Kmart faces the plans to install more kiosks in more stores will not be possible, however they plan to try to keep as many kiosks as possible in the remaining stores. The integration of the Internet and in store access has truly made a difference in Kmart�s profits and the company hopes that this increase in profits will continue.
Even though Kmart faces bankruptcy it was reported in the market share reporter as having the second largest retail market share among the companies in the retail industry. As reported Kmart has a market share of 15.6 percent, with Wal-Mart leading with 47.8 percent and Target third at 11.5, while all other retailers cover just 25.1 percent of the market. When Kmart does close all the stores scheduled to close its market share is expected to decrease.(Lasich, 2001)

Reference:
Lasich, Robert. S. Market Share Reporter: 2002. Farmington Hills, MI : Gale Group, 2001, (33)
Coleman, Calmetta (2000, June 26) Bluelight.com Boost Product Line as Kmart Pushes to Break Even. The Wall Street Journal; Chicago Tribune, p. 4

Rueters,( 2000, August 11). Kmart Plans to Spend $2 Billion On Store Improvements. New York Times (National Ed.)

Neuborne, Ellen (2001, June 4) The Box That Rocks. Business week

Sweeny, Terry (2001, March 12) Kiosks Spur Spending in Stores. Information Week

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