Merchants can also gain an edge by sharpening customer support via technologies like click-to-call, in which shoppers can trigger a voice call with a vendor representative right from an e-store Web page, said Bill Zujewski, vice president of product marketing at e-commerce services provider ATG. "This can be of great use during the checkout process to prevent a shopper [who has a question] from abandoning their shopping cart," he said.

As consumers compare prices and hunt for deals, e-stores must adapt in real time to remain competitive, reworking offers, crafting e-mail promotions, tweaking marketing campaigns and coordinating with their partners and suppliers.

"Online retailers are having to be very reactive this holiday season, more than ever," said Fiona Dias, executive vice president of partner strategy and marketing at GSI Commerce, a provider of e-commerce services.

For example, PriceGrabber does a complete relaunch of its site five to six times per day -- a frequency it has increased over time -- to accommodate real-time, intraday changes from its merchant partners, LaPierre said.

Of course, being nimble and flexible is impossible if online merchants lack good data collection, reporting and analysis tools for granular tracking of everything from Web site usage and fluctuating inventory to historical sales data and search advertising and e-mail campaigns.

With good data analysis, merchants can protect their profit margins by segmenting incentives and promotions and offering them selectively and strategically to different types of customers, instead of across the board, Zujewski said.

For example, deep data analysis allowed eBay to further refine its marketing technology this holiday season, said Matt Ackley, eBay's vice president of advertising and Internet marketing. By crunching data, eBay launched a system to offer rebates, coupons and special offers to buyers it has identified as valuable, and fine-tuned its search advertising campaigns to improve traffic quality to its site, he said.

During the holiday season, Google increases its frequency of reports about popular product keywords and categories to its advertising customers in retail, said Google's retail director John McAteer.

E-stores must also have strong capabilities to recommend products, a feature that, when well implemented, can convert prospects into buyers. A recent survey from ChoiceStream, a provider of personalization and recommendation services, found that 71 percent of shoppers either rely on recommendations or consider them when choosing products.

Baynote, which makes recommendation technology, has seen a spike in interest in its products during this economic downturn, said Scott Brave, the company's CTO. "People want to get the best deals and retailers want to serve those customers effectively. So there has been a lot of emphasis to get things up and running in terms of recommendation engines," Brave said.