With consumer confidence slumping, online retailers will need to maintain laser focus on revenues and margins in the last two months of 2008. According to Scott Silverman, Executive Director of Shop.org, the outlook is not all bad and might even be “good” relative to the performance of bricks and mortar retailing. Forrester Research has predicted that online sales in November and December will increase 12%, significantly slower than in previous years, but still way better than the 2.2% growth that NRF forecasts for overall retail.

We were interested to see Scott come down on the side of free shipping in this article, arguing that “the rough economy is pushing people to shop online looking for savings. If the savings are cancelled out by shipping costs, customers will be disappointed. Maybe they’ll go to a store, which isn’t bad if you have stores, but maybe they’ll decide not to buy at all.”

At Monetate we’re not for or against free shipping. What we are for is “intelligent shipping.” This means not offering free shipping on every item to every location but instead extending shipping offers that make sense according to your actual shipping costs and individual product margins. Monetate makes it very easy for marketers and merchandisers to personalize shipping offers according to visitor location. So, for example, if someone lands on your site from a part of the country to which you can ship cheap, you can offer them free shipping right away while avoiding the costly free shipping to someone whose location means a hefty delivery charge.

You can still offer reduced shipping to more costly destinations or tie shipping offers to cart size or product category. And just to be clear, with Monetate you can make these offers to shoppers who haven’t shopped with you yet. Monetate can usually determine customer location even for first-time visitors and that means you can make intelligent shipping offers that don’t sacrifice more of your margin than you can afford to spend. The result? Strong sales while maintaining healthy margins