December 26, 2000, 9:55 AM

Kmart`s not signing the blues

With the barriers to bringing online retailing to the discount market stretched out like a row of 13 double-decker buses, Bluelight.com has become the Evel Knievel of online retailing. In less than a year it has built sturdy ramps to send it screaming over its obstacles-and it has shown no signs of letting off the gas.

To bring its blue-collar customer base online, Kmart’s Bluelight.com offered up free Internet service. The ISP service, through Spinway and Yahoo, has drawn more than 5 million subscribers, a mark Bluelight says makes it the fastest growing ISP in the U.S. The site also is offering a low-cost PC (from $500-$650) to attract more web users. Ernst & Young Analyst Pam Stubing says the site’s attempt to attract blue-collar shoppers is a great strategy and a sign of who will be shopping on the web in the near future.

The site is staying close to the mothership by placing in-store kiosks for customers to order items not on the shelf, and by allowing in-store returns for items ordered online. The web site has a store locator, where maps and contact information are displayed after the user enters a city or ZIP code.

Although it got off to a fast start, Bluelight did not rest on its laurels. During the past several months, the site has been expanding its product offering-listed at 300,000 this fall. This product expansion was part of a relaunch that also added specialty stores such as Martha Stewart Everyday, Route 66 and Jr-s.com. The site also carries Kmart’s weekly circular listing sale items.

In spite of its tremendous momentum, Bluelight is not ready for the Snake River Canyon. Gomez Advisors Inc. ranked the site 10th overall on its summer scorecard. The site ranked 10th in the various categories with the exception of a third ranking for ease of use and an eighth ranking for on-site resources. With the relaunch improvements, the ranking is likely to climb.

Bluelight.com

San Francisco, Calif.

Monthly visitors: 2.2 million

Sales: N/A

Went live: December 1999

Design by: In-house

OS: In-house &
Fort Point Partners

E-C Software: Sun, Oracle & ATG

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