• by Sarah Mahoney  @mahoney_sarah, April 9, 2008

While traditional retailers have plenty to boo-hoo about these days, the National Retail Federation is predicting that online shopping will hold up well throughout the year.

Based on its most recent survey of more than 125 retailers, U.S. consumers will spend $204 billion in 2008. And while that represents a slower increase than in past years, it's still a gain of some 17% from 2007. That total does not include travel spending.

"The fact that online sales will increase substantially this year demonstrates the resilience of the channel and is a testament to the value and convenience most customers find when shopping online," the trade group says in its release of the data.

Surging gas prices are almost certainly part of the reason. A poll released earlier this year by Nielsen found that 15% of shoppers say they are buying more products online as a way to spend less on gas.

But rising fuel cost impacts retailers, too, and the NRF poll finds that marketers are clamping down on shipping freebies. The survey, done in conjunction with Forrester Research, finds that while 85% of online retailers have used some kind of promotional shipping rate in the past, only 35% plan to do so in 2008. Instead, they are investing in different ways to build brand identity, including social computing (65%) and widgets (55%).

The survey also found that online retailers are still unsure of the best ways to lure new customers--particularly at a time when online "newbies" are few and far between. It found that online retailers spend about 53% of marketing budgets for online customer acquisition and 21% for customer retention.

Retailers surveyed continue to believe that search engine marketing is most effective, and say that's how they get about 35% of sales: 90% say they use pay-for-performance search placement, and 79% plan to increase spending this year. But the poll also found that many companies use offline techniques, such as catalogs and direct mail.