Consumers Historically Pull Back Spending After an Election. How Should Retailers Prepare?

Retailers prepped for every possible result in the run-up to Election Day 2020, including what we’ve got: a morning after without a winner.

Online…brands pushed sales over the weekend before hitting a promo pause on Election Day. The reason?Regardless of outcome, U.S. voters typically skip shopping the day after.

• In 2016, online sales declined 14% on the day following the presidential election, according to Adobe Analytics data shared with Retail Brew.
• Overall consumer spending fell 6% YoY during the weeks of the past two presidential elections, per Epsilon’s Abacus data.

In-stores…retailers from Macy’s to Tiffany to Target boarded up windows at select locations, in case of social unrest following election results.

• Luxury brands and flagship stores in large cities are leading orders for enhanced security materials, Bloomberg reported.
• It’s unclear when retailers plan to roll back these measures.

With workers...many had their employer’s blessing to spend the day at the polls. The nonpartisan Time to Vote initiative had 700 co-signing businesses when Retail Brew first covered it in August; by Election Day, there were 1,900+ participants.

No spend November?

Not quite. Early estimates from Adobe Analytics suggested the presidential spending dip would return this year, but only for election week. The firm expects online sales this week will decline by $300 million compared to the previous week, an 11% slowdown.

• Still, pre-election, 63% of retailers believed consumers will be more confident in spending after the presidential polls closed.

How should retailers respond now? “Our research shows that consumers value authenticity, meaning retailers that have carved out positions on specific issues should remain true to those points of view,” said Greg Portell, lead partner in the global consumer practice of Kearney, a strategy and management consulting firm.

Action item: Promote safety and confidence, Portell told Retail Brew. Until a winner is called, there will be near-term effects. “An undecided or contested election will cool consumer spending and slow the return of out of home shopping and entertainment,” Portell said.