Online retailers are increasingly becoming the shopping destination of choice, and an all-out price war could help retail exchange traded funds (ETFs) this holiday season.

Malls and department stores are empty, and to compete for customers’ attention, retailers are now offering up great sales and deals before the Christmas season has officially begun. Online, however, there is an even bigger war going on, as retail sites are price-cutting and offering free shipping to boot, report Claire Cain Miller and Brad Stone for The New York Times.

Traffic on certain sites have hit a wall, so to speak, with sales down almost 25% at some stores. Some have been in business for more than 25 years and have never seen a drop-off as steep as this one. Sales of music, movies, books, computer software, flowers and gifts have been hit the hardest, with double-digit declines, research firm comScore said.

Not everyone is joining in, though. Some retailers and sites are not offering up discounts because of pricing control or the need to make a profit. But other companies feel that even if you sell the product for less than what the wholesale was, at least you sold it. On New York’s fabled Fifth Avenue, retailers are desperately trying to lure customers.

Either way, the consumer is in the driver’s seat and options are plentiful. Look into for “sale” emails and compare your choices.

  • SPDR Retail (XRT), down 52% year-to-date

Retail ETFs

  • PowerShares Dynamic Retail Fund (PMR), down 34.8% year-to-date

Retail ETFs

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.