By Sarah Nassauer, Suzanne Kapner and Khadeeja Safdar
Retailers dangled hefty discounts--on their websites Thursday
and in their stores early Friday--as they waged a high-stakes
battle with Amazon.com Inc. and other rivals to capture as much
spending as they could during the Black Friday shopping spree.
Millions of Americans left family Thanksgiving gatherings to
visit malls and shopping centers, often with smartphones in hand to
check prices, to scoop up flat-screen televisions, toys and other
gifts that retailers have been promoting for days.
Target Corp. CEO Brian Cornell said Thursday evening that he was
"very encouraged by the initial response," particularly to toys and
Apple Inc. products. He noted that hoverboards sold out early
online and highlighted the success of a $10 giant teddy bear.
"So far, the most encouraging trend we are seeing is that while
door-busters continue to be important," Mr. Cornell said, "once
guests are there, they are shopping multiple categories."
For brick-and-mortar retailers, the challenge is to draw more
shoppers into their stores on a chaotic day marred by long lines
and crowded parking lots. Last year, more people shopped online
than in stores during the Thanksgiving weekend, according to the
National Retail Federation.
Online shopping was on pace to reach $2 billion on Thanksgiving
Day, up 16% from a year ago, according to Adobe Systems Inc., which
tracked visits to e-commerce sites. But the revenue gains were
muted by hefty price cuts, especially on electronics, Adobe said.
Tablets, for example, were being discounted 25% on average
Thursday, compared with 12% a year earlier.
At a Wal-Mart Stores Inc. location in Washington, D.C., on
Thursday evening, many shoppers said they often make purchases
online but were motivated to head to the store for a specific deal
or just to pass the time between Thanksgiving events.
Jose Francisco was hoping to buy some electronics at Wal-Mart
that he said were a few dollars cheaper than at Best Buy. "I
planned ahead," said the 30-year-old who lives in Germantown, Md.,
as he scrolled his smartphone for online prices.
However, Amazon will still get a large chunk of his holiday
budget, he said, based on lower prices for videogames for his
nephew. "I have another list for that," said the photographer and
Uber driver.
Across the industry, retailers released advertisements of their
biggest deals three days sooner this year on average than last,
according to Market Track LLC, which analyzed emails, social media
and retail websites. And the volume of emails that retailers sent
to customers who opted to receive them increased 15% from Oct. 1
through Nov. 19, compared with the same period a year earlier,
Market Track found.
Consumer spending has been healthy this year, boosted by high
employment and rising wages. While there remain pockets of
weakness, especially among teen-apparel retailers and department
stores, many chains--including Home Depot Inc., TJX Cos. and Best
Buy Co.--reported healthy sales gains in the latest quarter. The
Commerce Department said U.S. retail sales through October logged
the strongest two-month stretch in the past two years.
In an effort to hold off advances from online rivals such as
Amazon, traditional retailers have been moving discounts earlier in
the month, linking their stores and websites more closely and
finding ways to capitalize on the rise in mobile shopping.
"Bricks-and-mortar stores are pulling out all the stops," said
Pete Madden, a director in the retail practice at consulting firm
AlixPartners. "They are making it clear they won't be beat on
price, service or products."
This year, shoppers are expected to spend $27 billion on the
Friday after Thanksgiving, according to consulting firm Customer
Growth Partners, making it the second-biggest U.S. shopping day of
the year--behind Super Saturday, which falls the weekend before
Christmas.
But Black Friday is no longer a one-day event; promotions are
increasingly spread throughout November, as traditional retailers
try to match more nimble online rivals.
Toys "R" Us Inc. made its Black Friday deals available to online
shoppers on Wednesday night, before stores opened at 5 p.m. on
Thanksgiving.
Kohl's Corp. for the first time made "door-buster" deals
normally reserved for in-store shoppers such as a $250 Samsung TV
and a $130 Fitbit wristband available online, starting at midnight
Thursday, before stores opened at 6 p.m. that day.
Amazon started its deals on Nov. 1. The web giant is offering
new discounts every day, sometimes as often as every five minutes,
through Dec. 22. In preparation for the holidays, Amazon expanded
its product offerings by 30%, the equivalent of 3.6 million new
products, according to 360pi, a retail pricing- and
assortment-tracking firm.
The risk is that early spending will pull dollars from later in
the season. That pattern has occurred over past Thanksgiving
weekends, as more stores opened on Thursday and siphoned sales from
Friday.
As a result, more retailers and malls stayed closed on
Thanksgiving this year, including Hhgregg Inc., Office Depot Inc.,
the Mall of America and many malls owned by CBL & Associates
Properties Inc.
The National Retail Federation forecasts total holiday shopping
will rise 3.6% to $655.8 billion from a year ago, with 137.4
million people shopping in stores and online during Thanksgiving
weekend alone.
In what some analysts have dubbed the "Trump Bump," they are
hopeful that President-elect Donald Trump will stimulate the
economy and lower taxes, which means "a large segment of the
population that was previously reluctant to spend," Citi analyst
Paul Lejuez wrote in a research note, "now feels better."
This year, 23% of Americans plan to shop in stores on Black
Friday, according to a survey conducted by Bankrate.com, a
financial-services company.
"This is my first Black Friday experience," said John Hanford,
as he scanned a pallet of toys at a Wal-Mart in Washington. The
62-year-old was lured to the store by a 5-foot plush teddy bear
sold for $20, a perfect gift for his 92-year-old mother. "This is
the biggest teddy she could possibly get."
He sneaked away to the store between Thanksgiving events,
dropping off his family at a second meal. "It's such a huge
gathering they won't even know I'm not there," he said.
Write to Sarah Nassauer at sarah.nassauer@wsj.com, Suzanne
Kapner at Suzanne.Kapner@wsj.com and Khadeeja Safdar at
khadeeja.safdar@wsj.com
(END) Dow Jones Newswires
November 25, 2016 06:14 ET (11:14 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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