With a tanking economy and growing national anxiety, retailers are expecting a lean holiday season. Things aren't looking cheery for online retailers either, and many are reducing their marketing budgets and spending on promotions.

According to a Shop.org survey, 30 percent of online retailers said they were reducing budgets, and 16 percent planned on reducing promotional spending. One reason for the cutbacks is the rise of expenses, including free shipping, which is one of the ways online retailers lure consumers out of physical stores.

Online retailers usually experience a 20 percent surge in sales for the holiday season, but Forrester Research predicts sales will only grow by about 12 percent this year.

"While ecommerce has traditionally been resilient to negative offline trends, an unprecedented financial crisis has reined in the optimism," Sucharita Mulpuru, a principal analyst at Forrester, told Advertising Age.

But cutting costs for online may result in some lost business -- not to bricks-and-mortar stores, but to online competitors, as more consumers plan on doing their shopping online this year.

Twenty-one percent of consumers plan to buy most of their gifts online this year, up from 19 percent last year, while nearly a quarter -- 24 percent -- of the total dollars spent during the holidays will be spent online, compared with 22 percent last year.