RAPAPORT...  Online retail sales fell 2 percent to $29.6 billion in the third quarter, according to comScore Inc. The contraction represented the first time since electronic retail sales began to be measured that year-to-year growth remained in negative territory for two consecutive quarters. One year ago, e-commerce retail rose 6 percent, followed by a 3 percent decline in the fourth quarter of 2008. First-quarter 2009 sales were flat, while the second quarter registered a decline of 1 percent.

“The third quarter showed negative marginal growth for the second consecutive quarter – the first time on record we’ve witnessed sustained dips in U.S. e-commerce spending, small though the declines may be,” said comScore chairman Gian Fulgoni. “The good news is that these declines may finally be in our rearview mirror, as we anticipate marginally positive growth for the fourth quarter. With retailers gearing up for the online holiday shopping bonanza and a fourth quarter that will include easier comparisons against year ago, we are hopeful that this Christmas season will be merrier than the last.”

Fulgonia also noted that free shipping has become an increasingly essential promotion for the e-commerce marketer. “With more than 40 percent of all e-commerce transactions now including free shipping, it’s clear that consumers respond favorably to this incentive and in many cases, have come to expect it from retailers," Fulgoni explained. "The retailers who do not offer free shipping deals this holiday season may find themselves at a significant disadvantage versus those who do.”

The retail sales measured by comScore exclude auctions, automobiles and large corporate purchases.

LH