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U.S. online retail sales this holiday season will reach $44 billion, a 12 percent increase over last year and the slowest growth rate to date, according to Forrester Research.

Consumers are pessimistic about the state of the economy but they still have a significant interest in the ability of the Internet to save them money. Forty-eight percent of consumers, compared with 41 percent in 2007, said they can find the best values and deals online.

Additionally, 36 percent of consumers said they would be more likely to shop online due to high gas prices, compared with 22 percent who said the same last year. Forrester anticipates that the majority of online holiday sales will be driven by shoppers who have previously made purchases online, instead of first time online buyers.

"While eCommerce has traditionally been resistant to negative offline trends, growing concerns about the stability of the economy are finally affecting consumers' online shopping decisions," said Forrester Research Principal Analyst Sucharita Mulpuru.

"This is going to be a very competitive online shopping season, so retailers should take immediate steps to bolster their customer retention strategies in order to ensure repeat purchases."

More than two-thirds of consumers said that they are planning to spend more or about the same online as they did last year. Primary holiday product categories such as clothing will remain the most popular choices for online buyers, along with books, DVDs/videos, music, gift certificates, and toys. Online shoppers also indicated they will be looking for free shipping offers more often this year than last.

"A main attraction of the online shopping environment is the breadth of information that it offers," said Patti Freeman Evans, Forrester Research Vice President and Research Director.

"Retailers should expand their use of online marketing tactics on search engines and comparison-shopping sites since shoppers are likely to be researching the Web more thoroughly when deciding on this year's holiday gifts."