By Richa Naidu and Nandita Bose
CHICAGO/NEW YORK (Reuters) - U.S. stores offered deep discounts, entertainment and free gifts to lure bargain hunters on Black Friday, the traditional start of the holiday retail season, but some shoppers said they were just browsing the merchandise, reserving their cash for internet purchases.
Still, a sharp rise in online sales brightened the overall outlook for those traditional retailers that have expanded beyond brick-and-mortar outlets, sending their shares higher in day-after-Thanksgiving trading. Stores also had carefully managed inventory, seeking to ward off any post-holiday liquidation that would weigh on profits.
There was little evidence of the delirious shopper frenzy customary of Black Fridays from past years, even as some stores appeared to be getting creative with gimmicks besides heavy discounts to draw in customers.
No actual data for Friday's brick-and-mortar business was immediately available.
Despite anecdotal signs of muted in-store sales - fewer cars in mall parking lots, shoppers leaving stores without purchases in hand - consumers are still expected to spend more overall this holiday season than last, analysts and industry executives said.
Black Friday online sales totaled at least $3.54 billion by 8 p.m. EST (0100 Saturday GMT), up 15.6 percent from a year ago, according to Adobe Analytics, which measures transactions at the largest 100 U.S. web retailers. On Thanksgiving Day, U.S. shoppers spent more than $2.87 billion online.
Adobe projected internet sales would still reach a record $5 billion by the end of the night, with online retailers forecast to rake in an additional $6.6 billion on Cyber Monday.
Indeed, some chains struggled to keep up, with brief online outages experienced by Lowe's, H&M and the Gap, among others, according to website performance monitors.
Macy's Inc customers in several states, including Texas, Arizona and Illinois, took to social media to complain about the retailer's credit card processing system. The company acknowledged that processing was taking longer than usual in its stores and said it was working on the problem.
The hiccups dragged Macy's shares 0.6 percent lower in extended trading. They had ended the regular session up 2.1 percent, boosted by comments from Chief Executive Jeff Gennette, who told CNBC that Macy's was better off this year than last, had robust online demand and was in a good place for holiday promotions.
Macy's and J.C. Penney Co Inc did a better job of ordering and controlling inventory this time, according to Burt Flickinger, managing director of Strategic Resources Group, a consultancy with seven researchers out in the field.
"The turnout this morning has been relatively slow, but it is still the best we have seen in three years," Flickinger said, citing improving consumer confidence, a strong job market and healthy housing prices.
Fair weather across much of the nation also was factor, said National Retail Federation President Matthew Shay.
Some shoppers were enticed by the promise of spectacle, while others felt the pull of nostalgia.
"It's like a hangout, it's an experience," said Jonathan Lin, 17. "All my friends are back from college and we got together."
"There’s something nostalgic about being at the stores this early,” Jennifer Stasiak said at Chicago’s popular Oakbrook Center.
Not everyone found the Black Friday magic irresistible.
“I avoid the store, too many crowds,” said Elana Silverstein, 32, a school counselor enjoying a warm, sunny day at a Los Angeles park. Instead, Silverstein said, she bought several personal items on sale Thursday night through the online marketplace Groupon.
Major retailers generally traded higher on Wall Street. J.C. Penney climbed 0.6 percent and Wal-Mart Stores Inc (NYSE:WMT) edged upward. Amazon.com Inc (NASDAQ:AMZN) closed up 2.6 percent at a record high.
Target Corp (NYSE:TGT) did not fare as well, with analysts noting that it closed its stores for several hours overnight while many rivals kept their doors open. Its shares fell 2.8 percent.
NOT WHAT IT USED TO BE
The period between the U.S. Thanksgiving holiday and Christmas can make or a break a retailer, accounting for as much as 40 percent of annual revenue and leading many businesses to go the extra mile to stoke shoppers' interest.
Godiva gave out free chocolates, while Sephora offered face masks and perfumes. Dancers entertained Bergdorf Goodman shoppers, according to the New York Post.
Many chains, including Wal-Mart, Target, Macy's and J.C. Penney, opened stores on Thursday evening and most were offering extended deals online. Some started offering in-store deals earlier this week.
Macy's said some 16,000 shoppers were lined up outside its flagship Herald Square (NYSE:SQ) store in Manhattan when doors opened at 5 p.m. on Thursday for its Black Friday eve sale.
The deepest discounts included more than $200 off some Best Buy TVs; all bras across Victoria's Secret Pink stores priced at $25; half-priced video games at Target; and $50 off PlayStation 4 Pro gaming consoles at Wal-Mart.
Here and there were signs of the pandemonium for which Black Friday was long known.
A confrontation between two men in the parking lot of Willowbrook Mall in Houston left one shot and the other stabbed, though the origins of the clash and whether it was shopping-related was not immediately known, police said.
A false report of gunfire prompted shoppers to flee the Westland Mall in Hialeah, Florida. Stores reopened less than an hour later, a mall security supervisor told Reuters by phone.
Near Birmingham, Alabama, police broke up a fight on Thursday night between two women who may have been arguing over a sale item at the Riverchase Galleria, mall officials said.
The growing online shopping trend, led by Amazon, has forced the toy chain Toys R Us and apparel retailers True Religion, the Limited, Rue 21 and Payless Shoe Source to file for bankruptcy this year.
Still, traditional retailers earn the bulk of their revenue from in-store buys. Shoppers in brick-and-mortar stores can also be easier to tempt with impulse or add-on purchases than online browsers.
Garden State Plaza in Paramus, New Jersey, was crowded but not chaotic. Shoppers came for deals with nothing specific in mind. Many enjoyed the experience of trying on clothes rather than shopping online.
A Macy's employee there said it was less busy on Friday because the store had been open, and packed, on Thursday.
"They’re all online," said Sarah Jones, 42, an employee at Roosevelt Field Mall on Long Island. "I’ve worked in retail my whole life, trust me."