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The Big Spender is back, and the Bargain Hunter is rifling through bins harder than ever.

In the post-recession holiday shopping season of digital coupons, snap sales and free shipping, two distinct classes of consumers are emerging.

One is the luxury shopper who is ready to drop anywhere from $520 for GPS-enabled ski goggles at Sporting Life to $1-million for a 16-carat diamond ring at Birks. At the other end is the bruised consumer, who is also back at the mall but more than ever is hunting for the best deal, checking e-mails and mobile apps in the quest for the ultimate bargain.

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The polarization reflects a decline in disposable income that has hit the middle- and lower-income consumer harder than the well-off. The widening gap has forced retailers to adjust their tactics: High-end chains are rebounding by once again stocking up on pricier lines of goods, while discounters and dollar stores are flourishing by pulling in more mid-income consumers with a broader array of products and prices.

Merchants that are wedged in the middle are feeling the pressure of shifting spending patterns. Mid-priced chains, such as apparel giant Gap Inc. and department-store merchant Sears Canada Inc., are left chasing the cash-strapped with a constant stream of markdowns. Women's clothier Boutique Jacob Inc. was pushed into bankruptcy protection last month.

"The market is splitting – either going up or going down," said Randy Harris, president of market researcher Trendex North America in Toledo, Ohio. "Those in the middle of the market are in big trouble."

Call it surgical shopping. What consumers at both ends of the spectrum have in common is an almost scientific approach to buying. They're counting on retailers' Web sites, consumer feedback on Facebook or price comparisons on mobile devices, examining everything from the ingredients in a $300 Giorgio Armani skin cream to the best deal on a flat-screen television. Stores are responding by racing to introduce video and audio product descriptions on their websites and mobile apps.

The gap between big spenders and spendthrifts was sharply widened by the recession, said Benjamin Tal, deputy chief economist at CIBC World Markets. High-income earners emerged from the downturn with lighter debt loads than mid- and low-income households. While the average Canadian consumer owes $1.36 for every $1 earned, the higher-income earner owes just $1.11 for every $1 of income, according to Ipsos Reid data.

"It's very bullish for the Wal-Marts of the world," Mr. Tal said of the discount titan. About Holt Renfrew & Co. Ltd., which caters to the rich, he said: "Holt's probably will survive."

From jeweller Tiffany & Co. to leather goods specialist Coach Inc., luxury retailers are rebounding from their worst days in the economic downturn. In 2010, worldwide luxury goods sales could rise 10 per cent after tumbling 8 per cent last year, management consultant Bain & Co. projects.

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"Wealthy people are feeling more optimistic about the economy, about the stock market, about where the world is going," said Tom Andruskevich, chief executive officer of Birks & Mayors Inc. "That's true of a lot of luxury goods companies."

Evidence of the highest earners spending at prerecession levels is surfacing. At Birks, whose same-store sales rose 5 per cent in the past two quarters, the chain recently sold its first item priced in the seven figures – a $1-million, 16-carat diamond ring – since the financial crisis, Mr. Andruskevich said. Its more expensive products, costing more than $20,000, are being snatched up at double-digit growth rates, while sales of items below $1,000 are increasing at a slower pace, he said.

Coach is also enjoying a return of its big spenders. During the recession, it lowered its handbag prices by about 15 per cent in North America, introducing a line of lower-cost Poppy handbags starting at $198 (U.S.). Then in October, it rolled out new styles in its higher price range, which run as much as $1,400, focusing on limited-edition and exclusive online offerings, with added pleats or flower appliqués.

"Those by nature carry higher [prices] and the customer is voting yes on those," said Mike Tucci, president of the company's North American retail division.

The higher-income customer expects to be able to access information at all times, said Marie-Josée Lamothe, a vice-president at beauty giant L'Oréal, which carries brands ranging from lower end Maybelline to upscale Armani.

The affluent customer is important to L'Oréal: So far this year, sales in the $1.1-billion (Canadian) upscale Canadian beauty market rose 2.2 per cent, while sales in the $2.1-billion mid- and downscale beauty field rose just 0.6 per cent, according to L'Oréal estimates.

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To win more customers, L'Oréal is adding QR codes to some of its products so that shoppers can scan merchandise with their mobile devices to find out prices, ingredients and other information. Ms. Lamothe's staff constantly reviews her brands' Facebook pages to get customer feedback. Earlier this year, L'Oréal started to allow customers to customize their four Shu Uemura eye shadow shades after Facebook fans asked for the change. "It's like a gigantic focus group," she said.

At Sporting Life, Mr. Russell finds that more of his high-end customers come with printouts of Web material about its products. "Maybe it's a function of retailers not giving knowledgeable service," he said. "They [consumers] feel they have to take things on themselves."

And at Birks, Mr. Andruskevich is revamping its e-commerce site because his customers told him it didn't provide enough product details. Customers today are willing to pay for something of high quality, but they also want to know more about the goods, he said.

At the other end of the spectrum, discounters – ranging from dollar stores to members-only flash-sale websites – are rapidly bolstering their businesses by trying to broaden their appeal.

Discount giant Wal-Mart Canada is testing Seattle's Best Coffee, a division of upscale Starbucks, serving consumers beyond its core lower-income customer. Dollar-store chain Dollarama increased its top prices to $2 and introduced debit cards in the past couple of years. Customers who pay with debit cards spend 2.5 times more than those who pay with cash. The strategies are paying off: In its last quarter, Dollarama's sales at stores open a year or more jumped 7.8 per cent.

Rival Dollar Giant, which was recently snapped up by U.S. giant Dollar Tree Inc., attracts a growing number of mid-income earners, president Joseph Calvano said.

The average annual income of his typical customer is between $60,000 and $70,000, and Mr. Calvano said he's opening more stores in better-off neighbourhoods, where the average transaction is $10, compared with $5 at stores in poorer communities. In mid-2009, he raised his maximum price to $1.25 from $1, and this year he's adding more food products, but keeping their prices at $1.

"We're not shying away from the middle and upper-middle areas because we know the consumer will accept us," Mr. Calvano said. "There's a demand for our type of store."

Customers such as Darcy Moncada have noticed the changes in the market. The Montreal mother of two picked up Halloween decorations at a dollar store and will soon head there again for Christmas lights, which she often bought at Canadian Tire in the past. She recently signed up at a coupon website for retailers' daily deals, featuring chains such as the Gap.

"I find I shop a little more now that I have all the coupons, to get things a bit cheaper," said Ms. Moncada, 36, owner of a start-up online baby goods business.

Others are also finding new ways to cash in on Internet shopping. Emanda Colton, a personal assistant in Vancouver, likes to buy stylish clothes but can't afford high prices. She recently discovered members-only websites, among them Beyond The Rack, which are an online equivalent to the retail discounter Winners.

Beyond The Rack offers constant cyber-sales of designer goods, as well as mid-priced items at deep discounts for limited periods. Last month, Ms. Colton, shelled out $264 for a pair of Chanel sunglasses, regularly $520.

"You can still be one of those girls carrying around a designer purse and nobody has to know you paid discount for it," said Ms. Colton, 23, who lives with her parents to save money.

Montreal-based Beyond The Rack is trying to lure more people like Ms. Colton by carrying more mid-priced goods, chief executive officer Yona Shtern said. Today, less than 10 per cent of his offerings are luxury goods, compared with closer to 20 per cent at the beginning of 2009, he said.

"You call it a gap in the middle but you can also call it a squeeze," Mr. Shtern said.

His affluent customers are also spending more. The highest priced item he has sold in 2010 – a $6,680 Wyler men's watch – was twice as expensive as his priciest sale in 2009: a $3,299 Prada handbag.

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