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Online shopping that had been expanding at over 15% every month just a few months back has taken a hammering from the current online crisis. And with the holiday season just around the corner, the situation is set to get worse and eventually bring a record loss to the business. NYT, yesterday reported of certain examples where online stores are desperately trying to get a boost at online sales with massive discounts and even free shipping. The problem is how much will they actually cut out? They cant risk slashing enough to literally zero their own profit margins. Following are a few excerpts from the report:

Free shipping is becoming a painful imperative for all e-commerce sites. Three-quarters of online shoppers said in a comScore survey that they would shop elsewhere if a site did not offer free shipping, and nearly all sites offered it for at least some purchases.

Plasticland, now an online boutique selling clothes, home décor and jewelry, started in 2002 as a single store in San Diego. The owners, lured by the global audience of the Web, moved it online in 2005. They were caught off guard this spring, when sales started to plummet. The company, now based in Plano, Tex., switched to lower-priced merchandise and began moving unsold goods onto its clearance pages a month earlier than usual. A necklace with a red apple pendant now sells there for $32.50, down from $65, and a serving platter for $37.80, down from $54.