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New Rules for the Holiday Shopping Season

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Despite what you may have heard, holiday shopping traditions are not set in stone. Back in 1939, Franklin D. Roosevelt, attempting to extend the shopping season, issued a Presidential Proclamation moving Thanksgiving to the second-to-last Thursday of November.

Today, new trends in economics, demographics, and technology are once again reshaping how -- and when -- Americans do their holiday shopping. Small businesses are taking advantage of these trends to stand out in an increasingly crowded and competitive marketplace.

Black Friday, the day after Thanksgiving given the name because it's estimated that many retailers finally begin making annual profits on that day, remains the elephant in the room. It's an entrenched tradition that dominates the holiday sales cycle by getting shoppers out of their houses at the crack of dawn to snag limited-time bargains.

It's not going away. A report by the National Retail Federation (NRF), the world's largest retail trade association, says that 1 in 3 shoppers were at the stores by 5:00 a.m. on Black Friday last year. And overall, the NRF expects an even merrier holiday season this year. NRF projects holiday sales to increase 2.3 percent from 2009, racking up total holiday sales of $447.1 billion.

But with the arrival in recent years of Cyber Monday -- the day after the long weekend when folks are back at work and ostensibly shopping online from their computers -- Black Friday is no longer the only game in town. More to the point, the impact of those two days is already shifting, as retailers try innovative new approaches.

For one thing, Thanksgiving Day is becoming the new choice for early-bird shoppers, both in person and online. For several years now, online retailers have begun offering their Black Friday/Cyber Monday deals on Turkey Day itself so that shoppers can avoid the crowds and lines of Black Friday.

Cyber Monday is also becoming less relevant. After all, in the modern era of smartphones and wireless connections, the days when shoppers need to rely on work computers and faster office Internet connections to make online purchases are long gone. Ellen Davis, vice president of NRF, says online shopping is gaining ground without cannibalizing the sales of Black Friday. But it's not all happening on one day. In fact, during last year's online holiday shopping season, Cyber Monday wasn't even the busiest day online. December 15th (dubbed Green Tuesday!) was the first time online sales have ever topped $900 million in a single day, according to Internet marketing research firm comScore. Cyber Monday ranked second with $887 million, up 5 percent from 2008. Black Friday didn't even crack the top 10 in online sales, which makes sense if all the shoppers were standing in line.

Now the get-started-early trend is expanding to brick-and-mortar retailers. This year, many large retailers are tweaking the calendar just as our 32nd president did. Toys"R"Us has announced that it's opening stores at 10:00 p.m. on Thanksgiving and staying open through Friday. Sears Holdings, which operates Sears and Kmart stores, is opening up on Thanksgiving for the first time in its history. And Wal-Mart, the great discounter of the land, plans to have most of its stores open on midnight of Thanksgiving.

So how can small businesses compete?

For some, it's all about making a personal connection. Frank Reider is the owner of GOL! The Taste of Brazil, a Brazilian steakhouse in Delray Beach, Florida, as well as the author of Wines of Passion: The Best of South America. Reider says he will use his wine expertise to help hand pick wines for his restaurant guests. "The personal touch that I have with people -- they ask for me when they come in -- I think they know it's not a chain," says Reider.

Others try for a more innovative approach. The Brownstone, a New York City-based retailer of contemporary women's clothing and accessories, is fighting back by reimagining the meaning of Black Friday with a black tie event. Store founder Princess Jenkins says the gala will start at 6:00 p.m. and serve champagne, as well as treats donated by other local small businesses. Attendees will get discounts for in-store shopping while at the event, plus a goody bag full of coupons from other local retailers.

"As a small business owner, it's difficult to compete with the big boxes on Black Friday. We won't open at 10 o'clock in the evening and go 10 to 14 hours to the next day, we won't be able to offer deep discounts," admits Jenkins. "So what could we do that will get people to come out on a Friday evening? Maybe they want to do a little partying, something social, but we have to give them a reason to come."

Ellen Davis agrees that quality and value offer big opportunities for smaller companies: "Unlike last year, this holiday season does not revolve entirely around the lowest prices," says Davis. "People might be willing to pay a little more for a gadget with extra bells and whistles. There are opportunities this year for retailers to emphasize quality, convenience, and service -- along with price -- to entice shoppers into buying."

Finally, this year there's one more special shopping day small businesses may want to consider. The Brownstone's Jenkins is also prepping for Small Business Saturday, a new program by American Express that aims to support local small businesses. She's including a special in-store Small Business Saturday discount flier in her goody bag. Says Jenkins, "It's great because we have two full days of promotion, which will take us right through that holiday weekend."

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