Holiday Web War Heats Up

Singer Mary J. Blige, at an Oct. 19, 2005 concert in New York City, has her name tattooed around her upper arm. GETTY IMAGES/Evan Agostini

When it comes to e-commerce, traditional discounters are no longer waiting idly in the wings.

After several false starts, Wal-Mart Stores Inc., the world's largest retailer, is making a play to be as much a powerhouse online as it is offline, reopening its renovated Web site Tuesday.

Meanwhile, Target Corp. unveiled its own redesigned site last Friday, boasting better graphics and an improved search engine. And Kmart Corp. this week officially flashed its Bluelight.com site, after quietly launching it in June.

With more consumers becoming Web savvy — 51 percent of American households are expected to be online this year, up from 45 percent last year, according to New York-based Jupiter Communications — the discount behemoths aim to seize a larger share of the e-commerce pie.

But the discounters have much catching up to do.

Despite its stock taking a recent hit, e-tailing veteran Amazon.com has dominated traffic on the Web, attracting 14.3 million people to its site in September alone, according to Jupiter's Media Metrix.

That same month, Kmart's Bluelight.com had just 2 million customers, while Target.com attracted 1.5 million and Walmart.com 1.4 million.

But Wal-Mart, Kmart and Target say they're counting on their brand appeal to win customers online.

Take, for example, Karen Bakos, a 38-year-old New York resident, who is a loyal Amazon shopper, but is open to shopping online because of the discounters' reputation for low prices.

"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."

All three discounters are trying to closely link their online and offline businesses, using their stores to advertise the sites through circulars and signs.

Yet each discounter is also trying to carve out its own niche.

For example, the Minneapolis-based Target is limiting its online offerings to 15,000, with a focus on trendy and profitable items like Phillips toasters and Michael Graves housewares.

Kmart mixes such basic products as baby strollers with image-brand items like Martha Stewart sheets, while Bluelight.com is selling 300,000 items, up from 50,000 in June.

Then there's the Bentonville, Arkansas-based Wal-Mart, whose 4-year foray into e-commerce has been rather rocky.

Its latest Web makeover is being spearheaded by Jeanne Jackson, chief executive officer of walmart.com.

"It's just a refreshening," she said, adding that the site's closing 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 expanding such categories as toys, electronic gadgets and other gift items.


By ANNE D'INNOCENZIO
  • CBSNews.com staff CBSNews.com staff

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