Rumours about the economy being poised on the brink of a rebound have been inching back and forth for the past few months, but it’s looking increasingly as though one sector is ready to reap in new sales: online retail.

That’s good news for online, but somewhat surprising considering the state of the general retail market. Just today many retail stocks fell sharply after news of sales declines in September. What’s standing between online and offline retailers? A small dose of innovation.

As many traditional retailers cut back on inventory levels and
holiday staffing in efforts to avoid the massive discounts needed last holiday season, online retail is bringing in more sales.

According to Forrester’s State of Online Retail 2009Profitability, Economy and Multichannel,” 42% of the online retailers surveyed
say they increased their conversion rates during the first half of 2009, compared to the
same period of 2008, to an average of 3.4%. And beyond that, half of online retailers say sales should be better than for 2009, following an average
growth rate of 18% in 2008 web sales over 2007. The National Retail Federation found that 80% of online retailers predict growth this quarter.

Those numbers are even more optimistic considering the state of general retail leading up to the quintessential holiday shopping season, where there is a predicted 1% drop in retail sales this holiday season.

My colleague Patricio Robles has already written that this holiday season will be littered with coupons. And it looks like the web is especially well poised to take advantage of cost-conscious shoppers. 

U.S. shoppers on average rate e-commerce shopping more highly than at
traditional retailers, according to the University of Michigan American
Consumer Satisfaction Index. And online retailers are increasingly conscious of new ways to improve their business.

According to eMarketer, 57% of web retailers have a Facebook page or advertise there. 41% are on YouTube, 28.6% on MySpace and 20.4% on Twitter. In all, almost three-quarters of the merchants in the company’s Internet
Retailer Top 500 Guide have a presence on at least one of the major
social networks or social shopping sites.

That’s not saying there’s a direct correlation between a social media presence and sales, but if offline retailers were spending more time getting where their customers are — and listening to what they want and care about — they might also be increasing sales this season instead of cutting back on inventory.

Image: eMarketer