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Mortar & Brick Fights Back

Wal-Mart and Target Take Fight to Amazon for Holiday Sales

Macy's CEO says the Internet didn’t appear to be making a dent in the chain’s Thanksgiving weekend foot traffic. 

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. TargetCorp. 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. (Photos: Hunting for Black Friday deals on Thursday)

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 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 Thursday and part of Friday. And Wal-Mart’s prices on videogames were lower than Amazon’s every day this week except for Thursday.

The holiday shopping season will help determine if 2014 ends with a bang. At the same time, consumers remain cautious. Sara Germano joins the News Hub. Photo: Getty.
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 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 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. is currently unavailable. Check back soon.” The site was back online before 11:30 a.m. ET. The company declined further comment.

I had 40 emails this morning, and it was all Black Friday promotions. It was literally just overwhelming.
John Haber, CEO and founder of Spend Management Experts
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, 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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