June 22, 2001
Case Study

How Kmart's BlueLight.com Integrates Online and Offline Marketing

SUMMARY: Here's a surprise -- Kmart (NYSE: KM) probably has more influence over the way that people shop online than Amazon does. In addition to 3,500 Internet kiosks linked to its BlueLight.com estore in 1,100 brick and mortar Kmarts across America, Kmart also operates 5th largest ISP in America, providing 6.9 million users with Internet access.

In fact, Kmart's BlueLight.com is one of the first online shopping experiences millions of middle class Americans have (especially moms.) These shoppers' experiences with the site's navigation, shopping cart design, opt-in email services and customer satisfaction shape their expectations for e-retailers as a whole.

So, any marketing tactics that BlueLight.com tests may affect your marketing too. Click here for more details....
"I was at a conference a couple of weeks ago," BlueLight.com's Online Marketing Director Brendan Foley told us, "and people from the interactive divisions at Unilever, and Pepsi were asking me, 'How do you really bring offline and online together? How do you build a completely integrated campaign?'"

How indeed? And then how do you turn that great branding into cash sales online?

You name the media, chances are BlueLight.com's message is on it. Offline it's on radio, TV, billboards, subway posters, bus shelters, magazine space ads and of course newspapers. Online, it's on superstitial, pop-up and banner campaigns in broadly popular sites across the Web including AmericanGreetings.com and Family.com. Foley says, "I have a friend in New York city who says I'm all over the place!"

However, Foley notes the key to success rests not so much in a multiplicity of media buys as it does in a very strict singularity of creative. In other words, all the ads no matter what the media, have the same words, the same colors, the same unified message. Foley says, "You want the persistent messages to be clear and identical. They see the subway sign with it, then they see the superstitial with it, then they hear the radio ad with it.... it builds over time. It penetrates their awareness and drives traffic to the store or online. The positioning is always great value, great brands at a really great price." This type of creative discipline sounds easy on the surface, but for most large companies -- especially those with multiple divisions and multiple agencies -- it can be an agonizing challenge.

BlueLight.com bridges the online and offline worlds in two more, clever, ways:

1. Kiosks -- Kmart stores already had T1 lines in place in order to exchange data with headquarters. So, early this spring, BlueLight.com relaunched its in-store kiosk program, tying the 3,500 kiosks directly to the live Web site, rather than a more static intranet or CD ROM. Store staffs were trained to direct shoppers, who couldn't find what they wanted in the store, to look for it online in the kiosks instead.

2. Sunday paper inserts -- Each week Kmart places colorful sales inserts into an average of 72 million Sunday papers. Naturally these flyers clearly reference the BlueLight.com URL. Plus, in order to build more synergy, BlueLight.com emails millions of its opt-in Rewards members a matching special deals message every Sunday.

Foley says, "They'll see the insert, and then maybe Sunday night they'll jump online and get the ad again in their in-box."

Once traffic reaches BlueLight.com, the site's development team does their utmost to turn those visitors into buyers. BlueLight.com's staff includes not just one but two UI (Usability Interface) experts who work full-time on making sure navigation and design are clear, easy and compelling for the average visitor. This April, BlueLight.com launched the latest of its three major site redesigns since the site began in December 1999. Improvements the IU experts and marketers added to increase online sales and customer satisfaction included:

- An expanded selection of very well known brand names (including Martha Stewart), which are featured prominently by logo, and easily searchable by name.

- More detailed information about every product on the site.

- A "persistent" shopping cart boxed area that appears on the right of every product description page -- much like Amazon's.

- More navigation options, so no matter how people prefer to shop (by special deals, by brand, by department) they can do so easily.

In order to convince more site visitors to become buyers, on March 1st 2001, BlueLight.com also relaunched its previously ad-based free ISP service with a different offer. Now, anyone can get 12 monthly hours of ISP access free, but if you want more than that you'll have to pay $9.95 for 100 hours a month. However, if you buy a single item at BlueLight.com, you can get up to six 100-hour months of free ISP service.

After the site relaunch in April, BlueLight.com jumped up to the #2 spot on Media Metrix's ranking of mass merchandising eretailers. VP Corporate Communications Dave Karraker says triumphantly, "It was the first month we beat JC Penny ever!" These April rankings were as follows:

1. Sears.com - 2.9 million visitors
2. BlueLight.com - 2.8 million visitors
3. JCPenny.com - 2.5 million visitors
4. Walmart.com - 2.2 million visitors
5. Target.com - 2 million visitors

A stunning 20% of total BlueLight.com traffic came from the live, in-store kiosks. Karraker explains, "When something is out of stock we use them to avoid a rain check or to save the sale."

Foley couldn't reveal exact numbers for the success of his Sunday email program, but did say, "It's a key driver of our site." We did learn, however, that by changing the free ISP program to a reward for online purchase program, BlueLight.com's sales to ISP customers jumped by 56%! Karraker says, "Now our ISP customers are in the top 10% of people in the store most, and they have the largest shopping baskets. They are spending the most money. It's been incredibly successful."

In fact, BlueLight.com may have found about the only way you can make money with a free ISP service!

Kmart's BlueLight.com

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