Kmart's BlueLight.com Pulls Traditional Retailer toward New Economy.

Byline: Joelle Tessler

Oct. 8--Fisherman's Wharf is just about the last place you would expect to find a dot-com.

But across the street from the Alcatraz ticket booth, in the same building as Rainforest Cafe and the San Francisco Wax Museum, BlueLight.com has set up its headquarters amid one of San Francisco's biggest tourist attractions. The walls shake every 30 minutes when the restaurant next door simulates a thunderstorm. But BlueLight.com feels right at home.

"We're close to our people," joked President and Chief Executive Mark Goldstein, referring to the masses of tourists one floor below. "Our customers are downstairs."

It is a fitting location for BlueLight, Kmart Corp.'s Internet business, which wants to introduce e-commerce to mainstream America. BlueLight is setting its sights on the people who are still finding their way around the Internet and are just getting comfortable with the idea of shopping on the Web. And as the online arm of a traditional retailer that has been marketing to the masses for more than 100 years, BlueLight has unique opportunities and challenges in bringing an Old Economy business into the New Economy.

While Web-only merchants like Amazon.com and eToys were the pioneers of e-commerce, it was only a matter of time before bricks-and-mortar retailers like Kmart, Wal-Mart, Sears and Nordstrom began to stake their claims on the Web. According to Chase H&Q analyst Bonnie Tonneson, a milestone came in June 1999, when Williams-Sonoma …