Good news for Internet marketers in a craft niche. As the recession deepens, craft sales are booming.

Craft stores, from giant chains such as Michaels Stores to small scrapbook suppliers, are reporting higher sales this holiday season than they did in 2007. At the same time, online marketplaces for handmade goods, such as Etsy, are experiencing record listings and transactions.

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A survey conducted by J.P. Morgan has found that nearly 30 percent of U.S. online shoppers plan on spending less over this year’s holiday season compared to last year.

But it’s not all bad news - 32 percent for online shoppers plan to spend more over the holiday period. Which means that, if online shoppers do what they say they will do, online sales during the holiday season are likely to be flat.

J.P. Morgan’s survey also found that 50 percent of online shoppers planned to shop at Amazon, while 35 percent planned to shop at Walmart.com, 32 percent at eBay, and 27 percent at Target.com.

Another key finding is that the single most important factor driving online shoppers is price, followed by selection, and familiarity with the store.

Source: Erick Schonfeld, “Survey Suggests Nearly 30 Percent Of Online Holiday Shoppers Plan On Spending Less This Year”, TechCrunch, November 29, 2008

Despite originally planning to release version 2 of its Kindle ebook reader in October (in time for the holiday season), Amazon now plans to launch Kindle 2 in the first quarter of 2009.

According to TechCrunch, that may be too late. Michael Arrington reports that a number of new ebook readers are about to be released, some of which may pose significant competition to Amazon.

Source: Michael Arrington, “Amazon Kindle 2 Slated For Early Q1″, November 25, 2008

As quoted in Clickz, research firm Javelin Strategy & Research predicts that nearly 20 percent of all online purchases during the holiday season will be paid for using alternative payment methods.

In its report, “2008 Online Retail Payments Forecast”, the research firm quoted such alternatives as prepaid or gift cards, eBay’s PayPal, and eBillMe, an online banking service, as being major winners over the holiday period.

Evidently, the ‘credit crunch’ will see online shoppers to cut down on their use of bank-issued credit cards, while increasing their use of store-branded credit cards and alternative payment methods.

Of the $42.8 billion expected to be spent online during the holiday season, Javelin estimates that or $7.8 billion or 18 percent will be paid using alternative payment methods. By 2012, this is expected to increase to one-third of all online transactions.

Source: Enid Burns, “Consumers Want to Pay Now for Online Purchases, Not Later”, The ClickZ Network, November 11, 2008

Circuit City, one of the nation’s largest electronics retailers, which filed for bankruptcy protection on Monday after months of declining sales. Skip to next paragraph Related Times Topics: Circuit City Stores Inc.

The company said bankruptcy reorganization would help it win back vendors worried about being paid, and that a $1.1. billion line of credit would keep goods flowing to Circuit City stores through the crucial holiday season. But outside experts said the prospects of long-term survival for a chain in Circuit City’s position were bleak.

The company’s problems go back a decade, and it had long been faulted by Wall Street analysts for poor strategic decisions.

Circuit City is still the nation’s second-largest dedicated consumer electronics retailer after Best Buy, with more than 700 stores.

Interestingly, visitors to both the Circuit City and Best Buy websites have been tracking in tandem over the past few months, with Best Buy clearly pulling in more visitors. But both pale in comparison with the visitors to Amazon.com.

Source: Stephanie Rosenbloom, “Circuit City Seeks Bankruptcy Protection”, New York Times, November 10, 2008

eMarketer predicts that online holiday season sales will reach $32 billion in 2008, around 10 percent higher than in 2007.

According to eMarketer the growth in online holiday sales will be somewhat due to more people seeking to save money by shopping online. Jeffrey Grau, senior analyst at eMarketer and author of the new report, Online Holiday Shopping 2008 Preview says:

“More than ever, in order to save money on holiday gifts, consumers will turn to the Internet to get gift ideas, find bargains and locate retailers that stock desired products.”

Source: eMarketer, “Will the Grinch Steal This Year’s Online Holiday Shopping Season?”, eMarketer, October 30, 2008