Election day is fast approaching, although, for many Americans, maybe not fast enough. In the interim though, we can continue to expect a lot of discussion and a political climate heavy on uncertainty and even anxiety. But, where does that leave the retail industry heading into Holiday 2016?
Historically, Presidential elections have had little statistical impact on retail, and there are many more pertinent factors relevant to consumers’ shopping behaviors heading into holiday, including broad economic indicators like oil prices, unemployment rates (under 5 percent since 2008), interest rates and inflation. With those economic metrics in mind, Holiday 2016 is shaping up to be relatively positive, and I don’t think the election will derail it much, if at all.
With that being said, however, Presidential elections, especially ones that result in a change at the White House, typically act as a distraction for consumers. Coupled with the disparity between candidates and Americans’ very emotional attachment or detachment to either candidate, the first Tuesday in November is poised to pose a higher degree of emotional relevance to the collective consumer psyche.
The impact, of course, will be most felt in the weeks immediately leading into and following election day, November 8. While I’m suggesting to clients that they anticipate uneven levels of both store traffic and sales, with a general downward trend, from the last week of October through mid-November, I am also anticipating overall sales for the month of November will be strong as compared to November 2015.
Traffic and sales for brick-and-mortar retail have improved going into the 3rd quarter as compared to the 1st and 2nd quarters. According to the RetailNext Retail Performance Pulse report, sales have improved up to two percentage points as compared to early in 2016, and traffic has shown as much as a three percentage points in improvements. Additionally, Sales per Shopper (SpS) and conversion have both remained positive through the course of the year.
In the recent Harris Poll survey commissioned by RetailNext about the election and planned holiday shopping, key takeaways included:
- Black Friday remains strong in the eyes of consumers. Statistically, this is substantiated in the RetailNext webinar showing that 68% of retailers have stated this is the top revenue day and Black Friday remains among the top traffic days for the holiday season.
- Americans pretty much plan to shop the same regardless of who takes the White House. Among those who plan to buy gifts this holiday season, 23 percent will spend less on holiday shopping if Donald Trump is elected president, while 21 percent will spend less if Hillary Clinton is elected. A majority of shoppers say the results of the Presidential election will not affect their spending this holiday season, with 70 percent saying their planned holiday shopping expenditures will not be affected if Trump is elected and 68 percent saying the same thing regarding Clinton.
Overall, I think holiday will be strong, with a slight degree of variability due to the distraction of early November. There are positive trends going into the second half of the year, the economic indicators are positive, there are two extra shopping days as compared to last year’s holiday season, and the angst of the elections will be well over by Thanksgiving, still the beginning of holiday shopping season. Retailers are finally converging more of their digital and physical platforms, creating more engaging shopping environments, investing in differentiated product assortments and responding more readily to shopper demands.
Like you, I have read some of the stories showing 65 percent of retailers believe the election will have a strong impact on consumer spending in the second half of the year, but in looking at the data, I have not seen much substantiation supporting those claims. Frankly, most of what’s out in the media is survey data on shoppers’ intentions and retailers’ beliefs, and neither of those can be validated or substantiated.
It remains to be seen how Holiday 2016 plays out, but it says here that wherever retail performance falls at the end of the year, the reasons will have very little to do with Election day.
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