The Great Recession is officially over, at least according to the National Bureau of Economic Research, a private, non-profit, nonpartisan research organization dedicated to promoting a greater understanding of how the economy works.
The NBER says the recession began in December 2007 and officially ended in June 2009, making it the longest recession the country has seen since WWII.
However, this official end of the recession is surprising news for consumers. According to a July 2010 survey of affluent consumers (avg. income $306.7k) by Unity Marketing, nearly three-fourths of those surveyed (73 percent) believe the recession continues, while fewer than one-fourth (21 percent) believe the recession has ended.
Of those who believe the recession continues, many think it will end sometime next year, but more are unwilling to predict its demise. That is going to mean a more cautious attitude among affluents toward spending into 2011. And, as Unity's research has historically shown, where affluent consumers go, the rest of the consumer base typically follows.
"The National Bureau of Economic Research bases its declaration of the recession's end on the technical definition of recession, a period of falling economic activity across the economy, and with this definition they are correct," says Pam Danziger, president of Unity Marketing and lead researcher in the study.
"However, a recession is not only an economic event, it is also a cultural one. When affluent consumers believe that a recession is on and might continue for a year or more, they are far more likely to take steps to curtail unnecessary spending. Unity's latest survey shows that the chief money-saving steps affluent households are taking include reduced dining out, less frequent shopping, more comparison shopping and more use of coupons. Less spending also means more savings, as 44 percent of affluents surveyed expect to save and invest more in the coming year.
Danziger continues, "The impact of affluent consumer cutbacks hurts not only the luxury sector, but marketers up and down the retail food chain. For example, the affluent are the economy's 'heavy-lifters' -- They account for only 20 percent of the U.S. households, but more than 40 percent of the $4 trillion spent by U.S. consumers at retail. This is a warning signal for marketers who must continue to compete hard for the limited dollars that consumers are willing to spend."
"At the end of the day, it matters little whether the NBER declares that the recession is over, that it continues, or that we are poised for another, separate downturn. What matters is what consumers believe, and it is clear they believe we are still in a recession.
"Marketers, therefore, must target their marketing efforts to their consumers' beliefs, not the latest report from the economists. That means marketers must behave as if the recession continues, demonstrating value, quality, and give customers good reasons why they should spend," Danziger concludes. "All marketers must deal with the fact that consumers feel continuing uncertainty, and they will continue to be cautious until they see the economy improve."
Unity Marketing's Luxury Report 2010 gives marketers the facts and figures they need to track trends in the luxury market and plan new strategies for after the recession:
www.unitymarketingonline.com/cms_luxury/luxury/Luxury_Report_2009.php About Pam Danziger and Unity MarketingPamela N. Danziger is an internationally recognized expert specializing in consumer insights for marketers targeting the affluent consumer. She is president of Unity Marketing, a marketing consulting firm she founded in 1992. Pam received the Global Luxury Award for top luxury industry achievers presented at the Global Luxury Forum in 2007 by Harper's Bazaar. 
