With the 2010 holiday season behind us, we're getting a good sense of how the "new normal" is reshaping our shopping habits. As it turns out, the "new normal" is a lot like the old normal:

  • Shoppers still gravitate toward brand names.
  • Our hearts soar at the sight of a bargain.
  • And rather than settle for subpar off-brand bounty, we'll do without or wait for our favorite four-letter word: s-a-l-e.

In other words, give us goods at either end of the frugal-fancy spectrum. Think Tiffany and Target. Coach and Costco (Nasdaq: COST).

Woe is the retailer that is neither a high-end merchant nor a low-priced retailer. That leaves you languishing in the unexciting middle with department stores like Dillard's and Bon-Ton. And these days, the middle of the road is the surest route to mediocre returns in retail.

But a couple of companies have nailed the "new normal" just right by catering to brand-conscious bargain hunters. Investors, allow us to introduce to you the "off-price retailer."

Why pay full price? 
"Off-price" retailers give consumers the best of both worlds, buying excess inventory from high- and low-end stores, then reselling it at discounts somewhere in the neighborhood of 20% to 70% less than the usual retail prices.

Retailers like Big Lots (NYSE: BIG), Stein Mart (Nasdaq: SMRT), Syms (Nasdaq: SYMS), DSW (NYSE: DSW), and Overstock.com (Nasdaq: OSTK) all fit into the general "off-price retail" subsector.

But by far, the two leaders -- both in size and execution -- are TJX (NYSE: TJX) and Ross Stores (Nasdaq: ROST). These stores set the standard for the entire discount merchant category. And at these prices, well, we're willing to load them both into our stock shopping basket. Here's why: