Kmart, Yahoo Deal a Databaser's Dream?
"I'm really looking for a good database marketing person right now," said Fran Maier, vice president of marketing for BlueLight.com, the e-commerce site through which the free ISP service will be offered.
Kmart will distribute CD-ROMs for the service in its approximately 2,160 stores. Yahoo, whose executives refused to comment for this article, will provide content and personalization features.
For the last 18 months, Troy, MI-based Kmart reportedly has been building a database of the buying behavior of the estimated 30 million consumers - half of whom aren't yet online - who shop at its stores weekly.
"Not only can we tell when you buy toothpaste, we know what brand and what size you purchased," said Kmart chairman Floyd Hall, according to The New York Times. "That can tell us a lot about your family and the types of products you'll be interested in purchasing in the future."
Indeed, this deal is the fourth major announcement since the beginning of summer in which an Internet concern is attempting to use data gathered offline for online marketing.
In October, marketing services company Cogit.com announced an exclusive deal with The Polk Co. to use the data giant's offline information - demographic and lifestyle information on some 111 million households - to help e-commerce sites deliver more targeted offers to visitors.
In August, Internet ad network 24/7 Media Inc., said it was involved in Naviant Technology Solutions' $46.5 million acquisition of database concern IQ2.net from Intelliquest and that it planned to use the information to target banner ads.
In June, Internet ad network DoubleClick Inc. announced it planned a $1 billion purchase of Abacus Direct Corp., manager of the largest database of consumer catalog buying habits in the United States.
Kmart claims it has collected data on buying behavior of some 85 million households, though at press time it was unclear how.
By offering free Internet access, the company will be able to collect more information as people sign up for the service.
Kmart would then get permission to use that information to offer personalized products and services while respecting people's privacy, said BlueLight.com's Maier.
"I think what we're going to be able to do is marry e-mail addresses to other data, and by that be able to target and personalize, and make the purchase offer and experience more relevant to people," she said. "And whether or not it's on a individual basis or a group basis, this has been the promise of the Internet for a long while."
For Santa Clara, CA-based Yahoo, the deal represents an opportunity to tap a huge mass market as it migrates to the Internet. Exactly how this translates into marketing tactics, though, hasn't been determined.
"Are we implementing anything yet? No," said Maier. "I'm not saying that right now we have all the answers, but we certainly have a good departure point."