I don't want to sound pessimistic (it is, after all, the holiday season, the time of good cheer), but it looks like we're heading into the second half of the double dip recession. I thought the country might shake off its economic woes, but now the pundits seem unsure when recovery might begin.

Increased consumer spending has been touted as the lifeline that could rescue the country from its doldrums. But before consumer spending can increase, consumer confidence has to go up. And based on scores of articles and news reports, it's clear consumers are in no mood to get out there and start buying. They're too busy tightening their belts. Which brings us to the subject of this month's column.

To see how the recession has affected consumer spending in one heartland region, WSL Marketing, a New York-based marketing and retailing consulting firm, conducted a study of the buying habits of women in Evansville, Ind., in February and March of this year.

Located in southwest Indiana near the Kentucky and Illinois borders, Evansville was chosen because its demographics and retail environment are similar to America as a whole. The area includes many mass retailer brands (e.g., Wal-Mart, Target, Osco, Kmart, Phar-Mor) and store types (discount, department, chain and deep-discount drug, warehouse, and supermarket). In addition, because Evansville's economy was hit early by the recession, the buying habits of its residents might anticipate those in the rest of the country.

Using 600 telephone interviews with adult females who had completed a shopping trip in the past seven days, the study was intended to answer questions such as: Were women switching brands because of the recession? Switching types of stores? Were there certain categories of merchandise that they were cutting out or buying more of?

These questions were asked in the context of the recession and also in the context of the changing retail market, says Wendy Liebmann, president of WSL Marketing. "The thing that had struck us over the last few years is that the classes of trade had really blurred dramatically. There are no longer very clear distinctions about who sells what merchandise. It used to be that if you wanted to buy clothes, you went to the department store or to the discount store. If you wanted to buy drugs you went to the drug store. If you wanted to buy food you went to the supermarket. But now there are so many different types of retailers selling the same types of merchandise that I wanted to find out how that affects the way women shop. Why did they go to one retailer for a certain thing that they could buy in 10other places?"

Price number one

The study found that price was the No. 1 factor influencing where people shopped. Convenience dropped to second place. For food purchases, conventional supermarkets were still the most popular outlets, more so than food-drug combinations. Women said that they had cut back on snack foods and were buying more staple foods. Forty-two percent of the women said they had cut back on clothing purchases for themselves in the past year.

Some seemingly recession-proof categories included hairstyling products (91 percent of the women said they were buying at about the same rate or more than a year ago), cosmetics (79 percent buying same or more) and greeting cards (81 percent buying same or more).

In general, the respondents felt that their economic future would stay about the same. Just over a third (35 percent) believed things would improve in the coming year and half that number felt things would get worse. As expected, the economically vulnerable - older, unmarried women with lower education/income levels and blue collar jobs - were the most pessimistic.

Sense of value

Though the Evansville study shows that price is the most important factor for consumers, Liebmann says that simply offering low prices won't guarantee success for retailers. "I think the issue of price is something that every retailer is going to have to face, but in the end, consumers really need to walk away with a sense of value. I know we've heard that for years but it's not the lowest price that's going to drive people, it's the best value."

She cites retailers like Wal-Mart and Target as retail success stories because they've added new factors to the "price + quality = value" equation, factors such as service, innovation and an overall satisfying shopping experience. Their particular combination of these elements defines the brand and makes shopping at a Wal-Mart, for example, a unique experience.

"These retailers have a very clear brand identity unto themselves and when people shop that store they have a sense of shopping a brand. Wal-Mart, for example, has an atmosphere and a product mix and a price structure that gives it a whole image to people. Consumers feel comfortable and believe that you'll always walk out of the store feeling as if you did alright. You got what you paid for, in fact, you probably got more.

"What a lot of these retailers have to do is really understand much more clearly the demographics and psychographics of their customers. It seems that those who clearly position themselves to a specific consumer are the ones that are much more successful today."

Liebmann mentions Sears as one retailer that has lost contact with consumers. "It's as if they stopped talking and listening to their customers to find out how things have changed. They've tried to position themselves with the 'everyday low prices' campaign but then you turn around and every three minutes they've got a sale on. Sears is a perfect example of a retailer who lost its sense of identity and its customers. You just can't do that anymore. There' s too much competition out there. You can't get away with it."