How the election may blow up retail predictions

The 2020 election is understandably expected to distract American consumers from vacation shopping this week – as it does every election year – as they pause to see if Donald Trump can repeat his surprise victory in 2016.

Adobe, which is forecasting an overall banner holiday season, announced that online sales will decline temporarily, down $ 300 million, or 13%, on November 4th from the week of November 1-7 that is projected Will bring in $ 16.3 billion in vacation sales.

This corresponds to the previous years when online sales declined until the outcome of an election became known. For example, e-commerce fell 14%, or nearly $ 160 million, the day after the 2016 election. According to Adobe, online sales fell 6% on the day after halfway through 2018.

In general, Jason Woosley, vice president of commercial products and platforms at Adobe, said that after an election there is "almost a collective national sigh" and then vacation shopping picks up again.

But that's not a typical year, is it?

And after a particularly divisive choice, the question that remains is how long that distraction will last – and what impact it will have on the holiday season for brands and retailers. This is especially true after analysts repeatedly said consumer distractions like the elections hurt Prime Day 2020.

Prolonged uncertainty

Claire Tassin, an analyst at Gartner, pointed out that prior to Election Day, a controversial outcome was being discussed that could potentially repeat the George Bush-Al Gore matchup of 2000. The consumer decision took more than a month – and likely impacting vacation spending.

"If we don't get the closure in the normal window Americans expect, there could well be another drop (in spending)," added Woosley. "I think we would consider this a potential area for softness when there are uncertainties that last longer than the traditional one or two days."

That's because consumers want security for the future. And when it seems unpredictable, they tend to cut their expenses and increase their savings. (Adobe said it was difficult to quantify the actual amount, however.)

Consumer confidence

This choice in particular is noteworthy for several reasons. For one, it is expected to see the highest turnout since 1908, when William Howard Taft defeated William Jennings Bryan. For another, emotions are high, with an August study by Pew Research found that 83% of registered voters say it really matters who wins the presidency this year – the highest since 2000 – and the American Psychological Association found 68% of adults in the US said the 2020 elections are "a significant source of stress in their lives".

Research also shows that the result could further influence consumer behavior. This was found in an Adobe survey that found 26% of consumers said the outcome will affect their vacation spend. In its own survey, Shopkick found that 32% of consumers think the same way.

A choice does indeed affect consumer confidence for better or for worse.

"A change in administration means that politics will change, which will affect people's lives," said Tassin. “Having a good time could break your confidence. And having a bad time can boost your confidence. So that will also affect the mood in which people approach this holiday season. "

Dave Nielsen, President Retail at Overstock.com, agreed.

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