It's Beginning to Look a Lot Like an e-Christmas

Holiday shoppers had better get their clicking fingers in shape.

Forrester Research is forecasting an 8% uptick in online holiday sales to $44.7 billion this year. That's a welcome acceleration from last year's 5% cyberspace gains, when online and offline shoppers were naturally cautious, given the crummy economy.

If 8% growth doesn't sound impressive, keep in mind that the National Retail Federation is targeting a bleak 1% decline in overall holiday sales.

For investors, the time to shop for retail stocks is before consumers head out to the mall. By the time chains begin discussing their same-store sales figures for November -- come early December -- the winners will have already separated themselves from the losers.

The disparity between online and offline projections makes Web-based retailing the way to go, but they're certainly not all built the same. Let's consider the varying degrees of success and failure at some of the leading online merchants during the 2008 holiday season.

You don't see any 5% growth there. Amazon's net sales surged by 18% to $6.7 billion during last year's fourth quarter, but high-end jeweler Blue Nile and closeout specialist Overstock posted double-digit declines. The websites of traditional retailers probably clocked in somewhere in the middle.

Amazon is the market leader, and it's no stodgy slouch. It can still outrun its presumably nimbler rivals, as its reputation and Prime member-loyalty program have seen it grow its lead over the competition.

The interesting dynamic behind Forrester's call is that one would assume that 2009 will be more of the same. Amazon will land well ahead of the 8% target, with many of its competitors falling well short of the mark. Try selling that information to analysts. Let's go over Wall Street's top-line expectations for the current quarter.

Source: Yahoo! Finance.

Yes, they're all pegged to grow faster than the online market itself. Even the less seasonal e-tailer Drugstrore.com (NASDAQ:DSCM) is staring at 15% growth during the quarter, according to its analysts.

Can they all win? Can it be the online initiatives of bricks-and-mortar chains that bring up the rear this year? This is all possible, but it's probably a sign that either Forrester is being too conservative or -- more likely -- that analysts are too optimistic.

This doesn't mean investors should steer clear of this sector. It's hard not to like Amazon, despite its seemingly lofty valuation. It's also easy to warm up to GSI Commerce (NASDAQ:GSIC), the online shopping enabler for many offline retailers. 

We all know where the shoppers will be this holiday season. Instead of "shop until you drop," it may be time to go with a "click until you're sick" mantra.