Despite the trepidation about the outcome of the presidential election, a dual silver lining to the contentious campaign could be deeper discounts for shoppers and more consumers seeking relief via retail therapy for stores.
Election Day is putting holiday shopping effectively in a holding pattern while customers wait to see whether Hillary Clinton or Donald Trump will become president. A National Retail Federation survey found that 43 percent of respondents said the uncertainty was prompting them to be more cautious with their spending.
43 percent of people said election uncertainty made them more cautious with their spending.
In blockbuster terms, Black Friday has become the tent pole for retail's promotional franchise. The entire weekend including Cyber Monday has evolved as malls and big-box stores compete with online retailers. While analysts say Black Friday will again face competition from e-commerce this season, shoppers' election anxiety at least has stemmed some of the Christmas creep industry analysts have observed over the past few years.
“I think Black Friday is still a real event and sort of this cultural thing. I think what you’ve seen is people getting off the creep,” said Joe Feldman, senior managing director and assistant director of research at Telsey Advisory Group. “Maybe it puts more concentration back into the weekend a little bit.”
Marshal Cohen, chief industry analyst at a market research firm the NPD Group, said that 14 percent of respondents to a survey said they were aware that the election had been a distraction from their regular shopping habits, and he estimated that the real number could be as much as 10 percentage points higher, including people who had shifted their purchasing patterns unconsciously.
But while stores are as on-edge as the electorate now, retail analysts and trade groups say the tide will turn after the election, predicting that spending will bounce back after the election as demand and aggressive promotions combine to lure shoppers back into stores.
“The day the election is over… we’re going to say OK, time to move on, let’s get beyond it,” Cohen said. “And that’s where that pent-up demand kicks in.”
Although some retailers have blamed the uncertainty of presidential elections for slumping sales, a study conducted last year that examined sales data after recent presidential elections found no sustained drop in sales, even when sentiments about the economy were negative.
The NRF said consumers were focused on politics now as campaign ads crowded out holiday promotions, but predicted a post-election bump for which it said retailers should get ready. “Retailers should prepare for a rush of consumers in the weeks following the presidential election as they get more economic and political certainty,” Matthew Shay, the group’s president and CEO, said in a statement.
“By the time Black Friday rolls around, it will cause people to say, 'I’m done with all this bad stuff, I want to just feel good.'”
As stores compete for market share, shoppers can expect discounts. “There are going to be promotions that are going to help catapult consumers back into stores,” Cohen said. “The sales are going to be pretty aggressive and that’s actually going to be good for consumers.”
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“This is a great thing for shoppers because retailers are watching this, too, and thinking ahead — OK, what can we do to sweeten the deal?” said Todd Harris, director of marketing at Celect, a retail analytics software firm. “We may even see more aggressive discounts than we’ve ever seen before this season,” he said.
That’s good news for the nearly 60 percent of Americans the NRF’s survey found plan to buy things for themselves this holiday season, as the culmination of a grueling presidential race could see Americans rushing for stores to indulge in some retail therapy.
“By the time Black Friday rolls around, it will cause people to say, 'I’m done with all this bad stuff, I want to just feel good,'” Feldman said. “There’s probably going to be a little bit of a relief spending.”