Eighty Years After Black Tuesday

And so it's been 80 years since Black Tuesday -- the day on which stocks plunged by 12% (having fallen by 13% the day before) triggering the Great Depression.

If we were celebrating a marriage, we would be giving diamonds and pearls after 80 years. Hardly appropriate today when consumers are shunning luxury goods and instead preferring to consume small luxuries such as Sprinkles cup cakes, candy and soda. It's a shame we aren't talking about the 42-year anniversary because the appropriate anniversary gift then is improved real estate, or the 43rd year anniversary where the gift is travel or the 44th year anniversary where the gift is groceries (not all that romantic I know). But giving any of these gifts would certainly have the added benefit of lifting the economy out of recession.

We all know that consumers are spending less during this recession. Even if consumers can afford to maintain their lifestyle we see evidence of changes to spending: stealth wealth has returned where people who can still afford to consume luxury goods are having to hide the fact; or affluent deprivation where consumers feel poorer and so cut back on expenditure out of concern for their future and the impact that rising health care costs, rising energy costs, depleted retirement accounts and likely increases in taxes to allow the government to repay the deficit will have on their lifestyle.

We wait with bated breath to see what the next 12 months will bring.

Jenny Darroch is on the faculty at the Drucker School of Management. She is an expert on marketing strategies that generate growth. See www.MarketingThroughTurbulentTimes.com

 

 

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