• by Sarah Mahoney  @mahoney_sarah, July 20, 2010

An extensive new study from NPD Group finds that no matter what's going on with the economy, people aren't so much recovering as they are resetting.

"Overall, consumers have reached this new equilibrium of spending and making decisions about things like groceries and apparel and electronics and automotive," Dee Warmath, SVP/Retail Insights for NPD, tells Marketing Daily. "The pie has shrunk, so each category is competing with another. So while there is a roving release of pent-up demand, there's not an overall increase in spending."

The Port Washington, N.Y.-based market research company interviewed some 71,000 consumers across eight categories, reviewing about 60 retailers and 75 brands per category. The new Retail & Brand Landscape Report then ranks each in terms of shopper engagement, shopper priorities, and shopper impressions.

And it found that while the recession changed shopping habits a little, in terms of store choice -- for example, people typically have about 4% more retailers in their consideration set than they did before the economy tanked -- it changed brand perception a lot. Consumers now typically have 20% more brands they will consider buying in any category, she says.

And above all, the recession sharpened their focus on value. "If consumers learned anything," she says, "it's that I can walk out of the store not buying something, and it will be okay." She says that even prior to the recession, there was clear evidence in consumers' losing trust in retailers.

For marketers, that has important implications about selecting the stores they are sold in, she says -- having your brand massively marked down in one channel will affect the way people see you.

While some research has focused on the way people now view finding lower prices as a game, Warmath sees it a little differently. "Part of these reset expectations is that consumers are increasingly recognizing every purchase is a business transaction, and it is fair for me to ask, as often as I need to: 'Is what I am getting worth what I am giving?'" And while they may not love having to do the additional calculations, she says, "they are coming to appreciate the value of this kind of thinking."

While the results did register plenty of instances of people trading down, especially in terms of store channels, not all those changes lasted very long. "There were segments of consumers who were very worried about cash flow and were willing to give up things that mattered to them, and so they shifted down to a certain category of store. But when there wasn't another shoe dropping, they went back to their old patterns -- a more balanced value equation."

Those shoppers, she says, are very different than those who had to shift down because of lost income.