BlueLight signs Global Sports to extended e-commerce pact - Brief Article

DSN Retailing Today, Sept 3, 2001 by Molly Prior

NEW YORK -- Now that BlueLight.com is attached at the hip to its mature parent company Kmart, it's shedding the technology that helped rear the e-tailer through its infancy. BlueLight has terminated its relationship with SubmitOrder, a fulfillment systems provider, in favor of an extended relationship with e-commerce developer and operator Global Sports.

The SubmitOrder partnership, begun in March 2000, worked well during BlueLight's infancy, said Dave Karraker of Kmart. But after Kmart acquired outstanding BlueLight shares in July, the corporation sought out a third party with technology geared to generate store traffic.

"Since acquiring the remaining shares of BlueLight.com, we have been reviewing all aspects of the operation, looking for new ways to increase efficiencies and better serve the customer" stated Chuck Conaway, Kmart's chairman and ceo.

At the start of the SubmitOrder relationship, Mark Goldstein, then chief executive at BlueLight, chose SubmitOrder to avoid having to shell out hundreds of millions of dollars building and staffing multiple warehouses. "My analogy is, when you're moving to a new city that you don't know well, do you rent or buy?" Goldstein told The Washington Post last December. "We decided to rent."

That flexibility has allowed the e-tail division to select a new third-party technology provider as it shifts its focus from selling on line to funneling traffic to physical stores. "Global Sports offers a more complete package," said Karraker.

Working with BlueLight's homegrown technology, Global Sports is able to create customized promotions and e-mail marketing campaigns intended to drive traffic back to the store, an even bigger focus for Kmart this year.

Through technology such as on-line coupons, Kmart will be able to more accurately track store traffic influenced by BlueLight. SubmitOrder also allowed for e-mail marketing, but Global Sports technology can personalize Kmart's communication with customers even further, said Karraker. BlueLight currently e-mails its customers once a week.

This new deal extends a previous e-commerce agreement between the two companies begun in March 2000, in which BlueLight's sporting goods category essentially acted as a storefront for Global Sports inventory. The new deal, said Kmart, is a natural progression beyond that.

Global Sports will handle fulfillment in all categories in which Kmart owns the inventory. However, Global Sports will not be responsible for vendor-direct inventory-- inventory sent directly from the vendor to the consumer for quality control purposes-- such as Omaha steaks, flowers and jewelry. The technology company will also manage the customer service component of the site.

For Global Sports, the Kmart alliance marks an expansion of its business to include developing and operating e-commerce businesses beyond the sporting goods merchandise category.

Global Sports is well known in the industry for operating big name sporting goods sites, including, but not limited to Dick's Sporting Goods and The Sports Authority. BlueLight's transition to the company's fulfillment, technology and customer service is expected to be completed by the end of the third quarter.