As stated over at CSE Strategies, as predicted Shopping.com is raising the CPC rates for most of their categories in anticipation for Q4–however they are also unprecedentedly lowering their rates for certain categories for Q4.

Generally most merchants/online retailers don’t mind the increase since the shopping season offsets the cost increase with a generous increase in revenue as well, so you can imagine the delight of many merchants with the announcement with the combination of potentially lower costs and higher revenues.

As speculated by CSE Strategies, the state of the economy and low consumer confidence may have a lot to do with this decision, as Shopping.com may be predicting a slower shopping season than normal, and don’t want to force its merchants to pay the price–literally.

How big of a difference is this willing to make?

Probably nothing too significant, as just 14% of SDC’s categories have been reduced, but for those who sell primarily in those categories and who were anticipating a cost increase it should definitely be welcome news given everything else that’s gone on.

What will be particularly interesting is to see how other engines react to this news, whether it be the major ones or the 2nd tier ones, hopefully others will follow suit making Shopping.com a trend-setter, rather than a dissenter.

There’s a couple of good things coming out of the Northwestern retailer.

With grim news all around for retailers, the expectations on Wall Street were an earnings decline for Amazon during the past quarter, but they were able to buck the trend and report highly favorable numbers, not long after reporting their best numbers ever.

As a result Amazon closed up 17.6% on Friday, proving that online retail, at least in this case, is still going strong as people hunt for as many bargains as they can.

In other news, a long awaited feature from Amazon has finally arrived, dealing with their Amazon Product Ads line.

While known primarily for a one stop retail shop, as well as being a marketplace in which users buy from 3rd party merchants directly on Amazon’s site, their Product Ads line is the lesser known, PPC/CPC program, in which the process is more similar to the way comparison shopping works.

More information can be found on Amazon’s site, but essentially the ads are displayed on the side, and once a user clicks through, they are taken to the merchant’s site (as they would on a shopping engine) and in turn the merchant pays Amazon a fee for it.

Up until now then the only way a merchant can submit a feed is through their own browser, which was much less practical for any merchant with a sizable amount of products that required constant updating–but now Amazon has released an FTP feature which practically all major CSE’s currently have, and do.

FTP (File Transfer Protocol) Support for Product Ads uploads, our most-requested feature, is now live! You may now use FTP to send us your Product Ads data files. With FTP, you can schedule uploads so that your ads are always up to date.

Currently Product Ads is lesser known in the markets, and can probably be described as a combination of  PPC advertising, such as Google Adwords, since they’re contextual based–as well as comparison shopping, since people searching on Amazon are looking to purchase items anyway.

This presents a great opportunity for merchants looking to expand their campaigns, if for no other reason than Amazon’s shear traffic numbers.

Well it’s a happy holiday for at least one online retailer out there, as Amazon is reporting that it’s 2008 shopping season is it’s greatest ever, in spite (or perhaps because) of the state of the economy.

With the wallets of consumers being a bit tighter this year, and with the tech saviness of the average shopper increasing, more and more are going online to find bargains that they would otherwise not find in retail stores.

It will be interesting to see how other channels of retail, both online and off have fared during this season. We’ve already seen a major spike in traffic for the top retail sites–and if all goes as expected, this may be the definitive point where we truly see online shopping become a true alternative to brick and mortar shopping.

Even if the economy booms again, people may just rather enjoy shopping with their mice and having all the inventory of the world at their hands, rather than heading out to crowded malls, dealing with hectic traffic, only to see items on their shopping list be out of stock.

The next few years will certainly be some to keep your eye on.

Our good friends over at the eTail dTail blog have presented an interesting look at how some of the top sites stack up compared to this period last year.

The chart combines traffic data from: Amazon.com, BestBuy.com, JCPenney.com, Kohls.com, Macys.com, Overstock.com, Sears.com, Target.com, and Walmart.com.

Leading up until Cyber Monday the year over year differences were rather minimal, but since then traffic has spiked by a consistent 25% each day.

Even if we were to align the dates up so that Cyber Monday and Black Friday match on the chart, it’s easy to see that more and more shoppers are turning to the internet for their holiday shopping.

If history is any indication then, we should be in the period right now where traffic begins to wane as the shipping cut-off for most retailers have already passed, but it should pick up as people find gift cards under their trees and head online–perhaps to a comparison shopping engine

While the end of the world may easily be near, depending on who you want to believe, the most recent results are slightly positive for the time being.

According to the latest Comscore finding this past Cyber Monday was the second highest online spending day since the beginning of time, with $846 million spent.

It wasn’t quite enough to bring the period up from November 1st to December 1st into positive growth territory, but did overcome the pre-Thanksigiving numbers which saw a decrease of 4% year over year for the period to a decline of just 2%.

What does the future bode for online retailers then?

Comscore forecasts that online spending will be exactly what it was a year ago, at $29.2 billion for the November and December months, an average of $14.6 billion per month–compared to an average of $10.2 billion a month from January to October.

Not exactly the greatest news if you’re an online retailer, but far from the end of the world, as we know it.

November has come and gone and we’re in the final stretch of Q4 toward Christmas which historically has seen major increases in sales, both online and offline.

Will the trend continue this year in making it a season to remember, or will the ghosts of Christmas future haunt online retailers?

Well, it depends on who you ask.

Looking at the glass half empty, the first part of November looks quite gloom, per the New York Times :

During the first 23 days of November, according to a report to be released later on Tuesday by the research firm comScore, consumers spent $8.19 billion online, a 4 percent drop from the same period last year. That marks the first annual decline since e-commerce took off.

Post November 23 though, things seem much more auspicious now per USA Today:

…online visits to Web tracker Akamai Technologies’ approximately 280 retail customer sites topped last Cyber Monday’s peak of 4.6 million visitors per minute. By 3 p.m. Akamai’s global retail customers — which include Best Buy and Victoria’s Secret — were experiencing 6.7 million online visitors per minute — the most Akamai has seen since it started collecting the data in 2005.

Whether or not the spike in traffic has resulted in a proportional increase in sales remains to be seen, but certainly it’s a good trend to be a part of.

Further reports show that despite a slow overall November, sales on Thanksgiving Day and Black Friday have actually increased year over year:

Internet research firm ComScore said on Sunday that online spending was up only 2 percent on Thanksgiving Day and Friday combined, compared with a year ago.

PayPal, the online payment service owned by San Jose-based eBay Inc. (Nasdaq: EBAY), said Black Friday transactions were up nearly 34 percent compared with 2007.

Another research firm, ShopperTrak RCT tracks total retail sales at more than 50,000 stores, said sales were up 3 percent to $10.6 billion on Black Friday compared to a year ago.

So there may be hope after all as we exit a poor November and enter into the final month of 2008, with the spirit of the season coming around, consumers may just not be able to help themselves from spending money.

The JP Morgan Internet Team has released a survey that suggests things may not be as gloomy as some might have you expect.

And while others may focus more on the gloom of things, we like to take a more glass half-full approach to the holiday season.

The results of the study are as follows:

Among those who shop online, the following percentage of shoppers are going to spend:

Discounting any other variables would indicate that this X-mas season is going to be roughly the same for online shoppers as compared to last year

Of course, it’s impossible to tell by how much the surveyors will either increase or decrease in spend, but given the potential negative growth in overall spend in Q4, one can assume that the overall decrease may offset any potential spending increase in spend among shoppers.

Still, one has to be hopeful that a slightly greater amount of people will be choosing to spend more money online this year.

Which, given the state of the economy, may stem a great part due to people getting tired of the malls and the dangers that come with them, and would rather shop with a click of their mouse instead.

Comscore has released e-commerce growth numbers for the start of Q4 October, which shows that growth has slowed to an anorexic 1% during the past month compared to last October.

Source: TechFlash.com

While this may seem to some to be a doom, gloom, jump off the bridge type of scenario, the silver lining here is that there was still growth year over year during the past month.

In other words, the online retail market is outperforming itself today compared to one year ago. If we were to survey online merchants and asked them how they thought online retail had done last month, many would think it would have been down from last year.

Historically of course, the Q4 shopping season is usually much more profitable for most retailers, with certain merchants getting 200-300%+ more sales compared to other, slower times of the year.

So for last month’s October to have been higher than they have in the history of e-commerce is a sign that consumers have simply not given up purchasing things online.

On the other side of the coin of course, such stagnant growth is certainly not an ideal scenario for merchants selling online, as they would like to see growth in overall consumer spend relative to the growth in online retailers.

The 1% growth is most likely due to more retailers flooding the online world giving conusmers more options, rather than consumers spending more money on any individual site–so at such minute growth one can conclude that more often than not, individual retailers are actually losing revenue since the pie has suddenly been divided into more pieces, while remaining the same size.

It will be very interesting to see how the rest of the quarter/year plays out, for if the trend continues we may see actually see a decline in the November/December months.

Still, a slight drop in sales during the winter season will still likely result in the most profitable quarter of the year for most retailers by a fair margin.