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NATIONWIDE DSN REPORT -- Several large discount chains are preparing for the future by developing shopping, as well as information-based points of presence, on the Internet. Among these are Wal-Mart, Target, Burlington Coat Factory, JCPenney, OfficeMax, Service Merchndise and Staples.

Wal-Mart recently unleashed its site on the World Wide Web (http://www.walmart.com). The pages include a store directory, historical and the current Wal-Mart stock prices, employment opportunities and a section devoted to Sam's Club, including its Buy-Line publication. Wal-Mart is taking an astute business approach to its site--using it as a marketing tactic and incorporating outside vendors to become part of it. For example, a recent visit to the site contained an advertisement for Windows 95, Microsoft's soon-to-be-introduced operating system (slated for Aug. 24). The page described Microsoft's new interface and even allows users to go directly to Microsoft's Web site (http://www.microsoft.com).

While Wal-Mart would not comment or disclose future plans for its Web site, the company is very excited about the role that Internet marketing will play for the Bentonville, Ark.-based discounter. One source called this effort a terrific "break from the norm."

Not to be outdone by Wal-Mart and its competitors, Target recently launched its own Web site under the URL, http://target.dhc.com. Apparently seeking to differentiate from the norm, Target has opted not to have its address include the popular WWW slug, which has become so familiar for Web sites. However, it should be noted that the address www.target.com has already been registered by another organization.

Target's Web server, which operates under the Macintosh environment and was developed by Apple Computer's Internet Server Solution, is still under construction. The site currently features a "special message" from singer Amy Grant, one of Target's spokespersons, and, due to its size (3.6 meg.), has a lot of graphics and contains an audio clip from Grant.

The Web initiative at Target is being spearheaded by the company's advertising department and is maintained by the Target Advertising Technology Team. This team comprises: Lee Crouse, advertising technologist; Elwin Loomis, advertising technology supervisor; and Matt Walsh, lead systems engineer. Each member of the team has set up his own Web page, with photo, as well as a separate E-mail address. The team encourages Web surfers to "drop a line" for new ideas about Target's site and even hyperlink their pages to sites they deem to be "cool."

As with other retailers, the Target site appears to be experimental, and, like Wal-Mart's site, is directed as a marketing initiative. With sites up and running from Wal-Mart and Target, the next logical question appears to be whether or not Kmart will seek a Web presence.

However, sources have indicated that Kmart has no plans to do so at this point, which can be attributed to the recent top management shakeup and the need to focus on Kmart's revitalization plan.

One of the earliest Web sites for a retail establishment was set up by Burlington Coat Factory (http://www.coat.com). "Right now, we are an information-only site," said Percy Young, manager of store systems for the New Jersey-based off-price apparel chain.

Launched in September 1994, the company's Web site offers a store locator, corporate data, a showcase of juvenile strollers from brands such as Aprica, Emmaljunga, Graco andd Perego through Burlington's Baby Depot, and a truly novel coupon offer through its Luxury Linens department.

The coupon, worth $5 off on the purchase of a Dream-Shape Mattress Pad or a Neck Mate Bed Pillow by Carpenter Co., prompted users to respond to several questions pertaining to shopping patterns for linens and their Internet connections. According to Young, the response to the coupon was quite successful. Burlington received several thousand responses to the offer, which ran for two months. Moreover, Young noted that during the time when the coupon was available, "we received 30,000 'hits' a week from about 3,000 people." The widely used ratio for determining hits (number of times a site is accessed) and the number of individuals is 10-to-1.

Burlington's site was fully developed in-house. "That may not be the best way to go, but the value has been in the learning experience," Young said. In fact, a key component of internal acceptance within Burlington Coat's offices was the installation of two Web servers: one solely for internal use and the other for its site. The internal Web server allows users to search internal documents, read the company newsletter, search an employee phone directory with photographs of each employee and the layout/floor plans of the entire headquarters, which is important for technical support applications.

According to Young, Burlington Coat will "continue to market products through the Internet that are easily recognizable and provide a good value," and continue to focus on Baby Depot and Luxury Linens. By the end of 1995, Burlington Coat expects to expand its Web site and even offer secure credit card transactions over the Internet. Before this happens, the major challenges include further development of the security issue of purchasing via the Internet, order fulfillment and staffing requirements. In the future, Young noted that Burlington Coat's site would have more coupon promotions and may incorporate advertising.

Navigating through the Web site at JCPenney (http://www.jcpenney.com) allows users to visit four distinct areas that are full of information and unique on-line marketing programs. The shopping section features the JCP Internet Store, which highlights JCPenney's private label brands, such as Arizona, Hunt Club and Worthington. This area also features a promotion from JCPenney's gift registry and featured products from JCP Home. While orders are not taken directly over the Internet, an 800 number is provided to order items.

An investor relations link provides a wealth of shareholder information, including information on JCPenney's investor relations contacts with phone numbers, an explanation of the company's dividend reinvestment program (DRIP) and dividend direct deposit plan, and historical stock data and stock splits. There is even a "hot link" that allows users to go from JCPenney's home page to the EDGAR database for SEC documents, such as 10Ks

A section called "JCPenney & You" provides a store directory, job postings, employee benefits, and philanthropic and public relations news on JCPenney, such as the company being the recent recipient of the Catalyst Award, an annual award that recognizes organizations which promote the advancement of women in business professions.

The "What's New" page features two unique promotions at two different JCPenney outlets. During the month of July, the JCP Styling Salon touted its semiannual perm sale offering customers a 20% discount. The promotion also offered a free gift: a starter kit for permed hair by Matrix Essentials (a $13.50 value). Internet users who want the gift can simply fill out an electronic form and electronically submit it to JCP Styling Salon. There are more than 900 JCP Styling Salons in the United States and Puerto Rico.

A separate promotion, from JCP Photographic Studios, promotes a sale on Sesame Street Portraits for children. The studio is offering an unlimited number of portrait combination sheets for $5 each. Customers can choose any two Sesame Street backgrounds and props and can instantly proof their children's portraits on a video screen. Those interested are asked to call (800) 59SMILE for the nearest JCP portrait studio.

While the majority of JCPenney's site is information-based, the salon and photography promotions represent new ways for JCPenney to attract customers, add to mailing lists and increase catalog sales.

Taking a different on-line approach, OfficeMax, the Shaker Heights, Ohio-based office supply superstore chain, has spearheaded cybersales by developing on-line points of presence through agreements with a number of on-line service providers.

The company's on-line foray began almost two years ago with InternetMCI and has since grown to include Prodigy, CompuServe, and most recently, America Online. OfficeMax has exclusive agreements with Prodigy and America Online as the sole office supply source.

According to Ryan Vero, manager of OfficeMax Online, "the company will continue to pursue other on-line services as other networks develop and grow and fit into the overall strategy." For example, with the initial launch on InternetMCI's MarketPlace, OfficeMax only offered a certain number of skus--about 10% of the 5,000 skus in its catalog, but changes will be happening on InternetMCI. Currently, approximately 1,000 products are offered by OfficeMax through AOL, CompuServe and Prodigy.