Online shopping down along with in-store sales

Much of the talk of the slowdown in retail focuses on in-store traffic, particularly comparing how sales at one store compare this year vs. the same period last year. In past years, the optimistic have looked to online to pick up some of the slack, as slow brick-and-mortar sales can be due to high fuel prices, fear of crowds, and the hopes that better deals can be found on the web... and web sellers have proven savvy enough to take advantage of those trends.

Alas, the New York Times reports that the present outlook for e-commerce is not nearly so positive this holiday season. While e-commerce spending is still up -- and doing better than its offline counterpart -- growth rates are rapidly declining, and has been falling every month since April. By September, online sales were growing at a rate of just 5 percent vs. the prior year's time frame, the lowest growth level in recorded history.

The Times notes that the looming recession is different than the last downturn, which saw online sales rise considerably. Many online sellers took advantage of cheap online ads at the time (since offline sellers weren't buying them) to promote their wares, and it worked. But this recession is hitting consumers and confidence levels directly, and it appears no amount of advertising is going to convince them to buy.

That isn't stopping some awfully aggressive promotions from retailers looking to salvage what they can of 2008. Wal-Mart will be offering some amazing Black Friday-morning-only deals that include a $128 Blu-ray player, a $199 Xbox 360 with Guitar Hero III and a guitar controller, and a $798 50-inch plasma TV.

I don't care how bad the economy is, those deals are likely to inspire trampling incidents come November 28.