Judging from the grim holiday retail outlook, the Grinch seems to be getting his way this year. The latest bad news is that Internet-retail-sales growth has hit a seven-year low, climbing only 1 percent in October compared to the year-ago period, according to market-research firm ComScore.

But it's not all bad. At least Internet retailers are doing better than their bricks-and-mortar counterparts. A new survey by The Conference Board and the research firm TNS shows that planned online holiday spending will be up 9 percent from last year, to $42.5 billion—compared to a meager 1.5 percent growth rate in storefront spending. According to that survey, 36 percent of people polled said they planned to spend $100 to $499 online this holiday season (up from 35 percent last year). The sub-$100 category is also growing, with 32 percent saying they would spend that amount online this year versus 29 percent last year. The Conference Board survey found that books, clothes, movies and toys are at the top of e-shopping lists.

The reason: people are looking to the Web for bargains. "We are seeing a consumer who is very frugal," says Lynn Franco, director of consumer research at the Conference Board, in New York. To help transform online browsers into customers, dotcom retailers are circulating coupons and heaping on the promotions to make sales happen, says Scott Silverman, executive director of the Shop.org, the online shopping affiliate of the National Retail Federation in Washington, D.C. According to Silverman, companies know that "you can shop around from retailer to retailer very easily at any time of the day." The retailers know that if they don't offer deep discounts or promotions they may get clicked over.

So what kind of deals can you expect? Virtual coupons and exclusive deals abound. Target.com has launched its "Deals of the Day" feature for online-only specials, similar to the new "Today's Extra Value" button on Kohls.com. eBay will soon launch its "one-dollar door-busters," a limited number of popular items —from toys to electronics —that will sell at the fixed price of only one buck. E-shoppers also avoid long lines, traffic, and in some cases sales tax (depending on the retailer's jurisdiction.) While bricks-and-mortar stores are discounting too, plenty of promotions are "online-only" this year. You can find some of these deals already. But expect the deepest discounts to start the Monday after Thanksgiving, a.k.a. Cyber Monday. Another added benefit: expect to pay less for shipping this season. Eighty percent of online retailers will offer some type of free shipping promotion, according to the National Retail Federation.

Big-box stores hope to capture shoppers who won't buy on the Web —those who are skittish about online fraud and others who like the act of shopping. To offset the cost of getting there, the King of Prussia Mall in Montgomery County, Pa. (the largest mall on the East coast), will offer gas cards to shoppers who buy three or more gift cards this season. Some stores are working with the Web to get shoppers back in stores by promoting their in-store specials online or by e-mailing coupons to be used in-store. Invading shoppers' inboxes has worked well for e-tailers like Amazon. Not surprisingly, big-box stores like Wal-Mart and Best Buy haven't ignored their success. "During tough economic times, customers gravitate towards value and turn to retailers that help them save money," says Wal-mart.com spokesman, Ravi Jariwala. Stephanie Tilenius, general manager of eBay North America, says they are offering plenty of promotions on many items already discounted on the site, including game consoles, digital cameras, and luxury goods. "The exciting thing here is the real emphasis on great value for consumers," she says.

© 2008