Hot Holiday Deals Hit Big Retailers

BENTONVILLE, Ark. (TheStreet) — Amid old stories of illuminated flying reindeer, Frankenstenish snowmen and 300-pound home invaders who squeeze through chimneys, the one about the holiday shopping season once beginning the day after Thanksgiving may be the least believable.

As parents tell children about a simpler time when drunken angels saved Jimmy Stewart from suicide and stores didn't stock candy canes until November, the reality is that retailers will need a bag of tricks bigger than Santa's to keep consumers occupied this year. Wal-Mart Stores (WMT) (Stock Quote: WMT) says 55% of shoppers surveyed start budgeting for holidays in August, and the National Retail Federation says 40% of Americans had planned to start their holiday shopping before Halloween.

(WMT) Black Friday-style sales began for retailers like Amazon (AMZN) (Stock Quote: AMZN), Sears Holdings (SHLD) (Stock Quote: SHLD) and Target (TGT) (Stock Quote: TGT) weeks ago. With 30% of shoppers surveyed by NPD Group saying they planned to spend less this year than last year, some retailers' seasons and discounts began as early as July. The NRF predicts holiday spending to drop 1% this year, after increasing 4.4% last year.

"The retail marketers say, they're getting away from the word 'sale,'" says NRF spokesman Mark Gatti. "It's a hole everyone jumped into."

(WMT) (AMZN) (SHLD) (TGT) That hole opened in October, when Wal-Mart announced it would sell 100 of its toys for $10 a pop and flatten prices on some electronics. Sears deepened the crevasse when it decided to host Black Friday sales every Friday from Oct. 30 onward, which led Wal-Mart to kick off weekly cuts last weekend by inviting shoppers to gorge themselves on cheap Thanksgiving foodstuffs and TVs, and help themselves to $10 pre-orders of top DVDs on its Web site. Amazon and Target jumped in by waging a three-way book battle with Wal-Mart that dropped many popular titles to $10 or less. While Barnes & Noble (BKS) (Stock Quote: BKS) and Borders (BGP) (Stock Quote: BGP) resisted the urge to make similar cuts, Borders' plan to eliminate 200 smaller outlets and 1,500 jobs in January is an ominous coincidence.

(WMT) (AMZN) (SHLD) (TGT) (BKS) (BGP) "This leaves bookstores in a very competitive environment," Gatti says. "You've either got to provide a specialty service or use knowledge of the product to keep customers coming into your store."

(WMT) (AMZN) (SHLD) (TGT) (BKS) (BGP) Basically, retailers need to go old-school, which is exactly what Kmart and Toys "R" Us did when they revived their layaway programs last month. With Americans' lines of credit shortened by the current crisis, the payment plan that began during the Great Depression and faded in the '80s and '90s is coming back strong. At eLayaway, whose 200 online partners include Best Buy ( BBY) (Stock Quote: BBY) and Home Depot ( HD) , holiday sales began in July. The company hasn't pitched its service to retailers in months.

"The calls come to us now, and the merchants come to us in desperate shape," says Sergio Pinon, founder and chief marketing officer for eLayaway. "Unfortunately, some merchants are a little late to the game on this."

(WMT) (AMZN) (SHLD) (TGT) (BKS) (BGP) ( BBY) ( HD) For consumers, late isn't an option this year. Pinon says some customers used his site earlier this year to order $400 to $600 gift cards for November delivery, in time to take advantage of the free shipping 80% of online retailers plan to offer, according to the NRF.

Among large retailers that haven't embraced layaway, many have managed their inventories more tightly this year after being caught off guard by last year's economic downturn. As a result, shapes, sizes and colors of certain products will be much more limited than in 2008.

(WMT) (AMZN) (SHLD) (TGT) (BKS) (BGP) ( BBY) ( HD) While Wal-Mart still has big Black Friday plans and vows to extend many of its early offers through Dec. 25, executives hope the prolonged holiday won't lead to a desolate December.

(WMT) (AMZN) (SHLD) (TGT) (BKS) (BGP) ( BBY) ( HD) "We work very hard to ensure inventory as much as we can," says Melissa O'Brien, a Wal-Mart spokeswoman. "Are we trying to get shoppers to buy now because there won't be inventory later? No."

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