By Suzanne Kapner, Laura Stevens and Sara Germano
After losing ground in past years to online competitors over
Thanksgiving weekend, brick-and-mortar retailers are striking back
by becoming more aggressive in pricing and selling goods on the
Web.
The strategy appears to be driving traffic to their sites.
Wal-Mart Stores Inc. said Friday that Thanksgiving was its
second-biggest day ever for online sales. Target Corp. said
Thanksgiving was its biggest online day ever, with sales up 40%
from a year earlier. Meanwhile, Best Buy Co.'s website crashed
repeatedly Friday after what the electronics chain said was an
unexpected surge in mobile traffic.
The gains show traditional retailers are doing a better job of
drawing the attention of consumers who plan to do more than 40% of
their holiday shopping on the Internet, according to the National
Retail Federation. At the same time, the deep, early online
discounts are giving those shoppers less reason to visit store
locations where they might make other purchases.
It is a tricky balancing act for brick-and-mortar retailers, who
have a lot to lose either way.
"I would rather have customers in the store," said Terry
Lundgren, chief executive of Macy's Inc. "They will always find
something in the store that they didn't intend to buy, and,
hopefully, those impulse items will carry the day."
The crowds at stores on Thursday and Friday showed that millions
of shoppers are still willing to brave the cold and the long lines
in search of deals. Their numbers could be eroding, though. Esohe
Asemota plans to do most of her shopping online this year, but
showed up at the Atlantic Station outdoor shopping center in
Atlanta with her sister before 6 a.m. Friday to line up at H&M,
which was giving out scratch-off discount cards.
"I just wanted to see if anything was different in the store,"
the 27-year-old medical assistant said. "Sometimes you get things
at the door that you wouldn't get online, an extra percentage off
or free $25 gift cards." The night before, she and her sister had
gone to Macy's, Wal-Mart and Target, and bought items such as a
sweater, a coat and some Blu-ray DVDs. But the sisters said the
in-store deals have been disappointing. "It just doesn't seem worth
it," Ms. Asemota said. "It didn't seem like they had anything worth
getting out of bed for, and you can probably just get it online, or
even at a later date at not much of a price difference."
Her 19-year-old sister, Abie Asemota, added: "This is our last
year."
Retailers have been putting more of their Black Friday deals
online and offering them earlier in the week. Target offered some
of its deals in stores and online on Wednesday and said that by 9
a.m. online sales had already exceeded the total from the same day
last year.
Figures from payment-services company First Data Corp. show that
sales volumes soared between 5 p.m. and 7 p.m. on Thanksgiving
compared with a year earlier, then eased off in the remaining hours
of the day, an indication the early discounting pulled sales
forward.
At the Crossgates Mall in upstate New York, Macy's was offering
a Bella High Power Juice Extractor for $59.99 at the register. The
juicer was going for the same price online. At J.C. Penney,
customers could find deep discounts on housewares such as bedding,
including a king-size Royal Velvet Vanessa four-piece comforter set
that was priced at $194.99 both in store and online.
Competition from Amazon.com Inc. and other online retailers is
forcing brick-and-mortar chains to get more aggressive with deals.
The online prices for big-box retailers including Wal-Mart, Target,
Home Depot Inc., Lowe's Cos. and Sears Holdings Corp. are tracking
much more closely to Amazon's prices than they were a year ago,
according to data compiled by price-tracking firm 360pi. In many
cases, the prices on a wide range of goods moved in lock step with
Amazon and other sellers.
"Retailers are getting better at monitoring and optimizing their
online prices," said Joleen Wroten, a business-intelligence analyst
for 360pi.
For instance, according to 360pi, Wal-Mart's prices on small
appliances were lower than Amazon's on most of Thursday and on
Friday. And Wal-Mart's prices on videogames were lower than
Amazon's every day this week except for Thursday and part of
Friday.
Dan Toporek, a Wal-Mart spokesman, said the retailer had created
pricing tools that it used last year but is applying them more
widely this season. "More than four out of five times, we are
coming in with the same or lower prices than our online
competition," he said.
An Amazon spokesman said the company "scours prices--both
offline and online--in order to make sure we meet or beat the
lowest prices out there." The Internet giant still had the lowest
prices before shipping most of the time on more than 160,000 items
tracked by 360pi.
Target upped its game online by offering free shipping on all
purchases through Dec. 20. "We've been very focused on ensuring we
have great prices online all the time, just like Target stores,"
said Jason Goldberger, senior vice president of target.com and
mobile.
Best Buy also has been working to boost its web operations. The
company has spruced up the look of its site, attracted more
customer reviews, added a clearance section and improved Best Buy's
search-engine rankings.
But the company fumbled when mobile traffic surged and forced a
roughly 90 minute outage at BestBuy.com Friday morning and another
that evening. Instead of seeing deals on TVs and other electronic
gear, visitors to the site saw the message: "We're sorry.
BestBuy.com is currently unavailable. Check back soon." The site
was back online before 11:30 a.m. ET. The company declined further
comment.
Retailers "have got to get the growth from the e-commerce side,
because the brick and mortar, we don't think we're going to see the
growth there for the retailers to hit their targets," said John
Haber, CEO and founder of supply-chain consultant Spend Management
Experts, who works with major retailers. "I had 40 emails this
morning, and it was all Black Friday promotions. It was literally
just overwhelming."
Some shoppers had no choice but to visit stores Friday if they
wanted popular items that were out of stock on the Web.
The Wall Street Journal's Christmas Sale Tracker found that a
doll set from the Disney movie "Frozen" was sold out online at
Wal-Mart, where it was priced at $24.97, and at Toys "R" Us Inc.,
where it had been selling for $29.99. Messages on the retailers'
websites encouraged shoppers to visit their stores. Amazon,
meanwhile, was selling the doll set for $41.90, including
shipping.
Macy's CEO, Mr. Lundgren, said the Internet didn't appear to be
making a dent in the chain's Black Friday foot traffic. Shoppers,
he said, want to see certain products and like the social side of
the trip.
Shelly Singh, a 39-year-old stay at home mother, went to Macy's
flagship store in Manhattan on Friday for a coffee maker and walked
out with towels and pajamas for her children. "Those were
unexpected purchases," Ms. Singh said.
Still, even shoppers who say they are devoted to the ritual of
hitting the stores Thanksgiving weekend are buying more online this
year.
Shantel Williams, a 37-year-old contractor specialist for New
York City, said Black Friday is a tradition. But this year she
spent Thursday shopping online at jcpenney.com, where she bought
two jackets, a hat, a scarf, two cable-knit turtleneck sweaters,
some tops and a pair of boots.
She also showed up at the J.C. Penney in Manhattan at 6 a.m.
Friday morning but didn't buy anything. "I came to accompany a
co-worker and to pay a bill," she said.
Drew FitzGerald, Shelly Banjo and Paul Ziobro contributed to
this article.
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