It’s beginning to look a lot like Christmas…and Black Friday, and Cyber Monday – two of the busiest and biggest shopping days of the year. Online sales alone totaled 2.72 billion on Black Friday last year. And, while retailers are normally gearing up for major holiday spending, this year’s election results could negatively impact sales.
Veterans Day, for instance, serves as the first peak in holiday spending, acting as the “unofficial kickoff” for holiday shoppers. This year, however, Veterans Day – which took place just a few days after the election – did not deliver on expectations.
According to early results from Adobe Digital Insights (ADI), it was predicted that there would be $1.54 billion in online spending by November 11. Unfortunately, ADI reported that sales were $380 million lower than expected at $1.16 billion.
Yet major retailers like Nordstrom, Macy’s and Kohl’s remained optimistic going into November. For example, Nordstrom reported beating Q3 expectations, posting solid sales growth and strong margin performance.
The Department of Commerce even showed a 0.8-percent increase in retail sales in October and a 1-percent increase in September, resulting in the biggest two-month gain in years.
Fortunately, there seems to be a light at the end of the tunnel for retailers as the major holiday shopping days approach. Despite the surprise outcome of the election, retailers are noticing glimpses of hope for holiday sales this year.
Here are 3 indicators that suggest we’ll see strong revenue in the retail sector this quarter:
ForeSee recently conducted a consumer poll to determine how the election results will impact holiday shopping behavior. Data coming from a sample of more than 1,500 web and mobile retailer shoppers was collected between November 4 - 9.
Findings indicate that 66 percent of shoppers – both Democrats and Republicans – believe election results will not negatively impact their holiday spending plans. In fact, 19 percent of Democrats and 12 percent of Republicans reported that they would spend more this year (retail therapy, anyone?).
The National Retailer Federation’s President and CEO Matthew Shay says, “Once the election has passed, we anticipate consumers will pull themselves out of the election doldrums and into the holiday spirit. Retailers should prepare for a rush of consumers in the weeks following the presidential election as they get more economic and political certainty and are looking to take advantage of promotions and deals that are too good to pass up for their friends, family and even themselves.”
Survey results also show that 40 percent of millennials and 28 percent of Generation Xers actually plan to spend more during the holidays this year (compared to just 2 percent of Baby Boomers). This could be due to the fact that Millennials are waiting to spend their money on the best deals, which usually occur in November during Black Friday and Cyber Monday.
The stock market also predicts a strong 2016 holiday shopping season. Following the election, US stocks climbed as the price of oil made its biggest leap in seven months.
The Dow Jones industrial average gained 54.37 points (0.3 percent) to 18,923.06. The Standard & Poor’s 500 index climbed 16.19 points (0.7 percent) to 2,180.39. Finally, the Nasdaq composite jumped 57.22 points (1.1. percent) to 5,275.62.
“With the holiday season upon us, retailers are glad that this unprecedented election is over, along with the divisive rhetoric and the impact it has on consumers concerned about their future,” Shay said in a recent article. “Shopper are expected to pull themselves out of the election doldrums and retailers will likely see a rush of customers in the coming week.”
Once the 2016 election results were announced, many people began to draw parallels between Trump’s win and the Brexit vote. However, Britain’s retail sector and continued consumer spending should serve as a positive example for the U.S.
After the Brexit vote, many economists predicted an immediate and significant impact on the UK economy. Fortunately, these predictions have not been accurate. Recent reports even show that the economy grew by 0.05 percent in the three months following the Brexit vote.
According to market and consumer information from GfK, “Consumer confidence has returned to pre-referendum levels in September with shoppers shrugging off concerns and continuing to spend. They have been helped by higher wages, low inflation, and the Bank of England’s record low interest rates.”
“Keep Calm and Sell On” But Remember…
The 2016 holiday season may be off to a slow start, yet consumer polls remain positive and stock market predictions look strong. Finally, Brexit should serve as an example of how U.S. consumer spending could actually increase this holiday season.
Of course, some people might also consider the elements mentioned above to be similar to Clinton winning the popular vote during the election. While Democrats remained hopeful and confident, the outcome was rather shocking, based on the early indicators.
Retailers, however, should continue to stay positive when considering holiday sales this year. Yet merchants should also consider alternative plans just in case they end up with large amounts of excess inventory. After all, we can never be so sure of an outcome simply based on the “popular vote” and positive indicators. One morning, when Gregor Samsa woke from troubled dreams, he found himself transformed in his bed into a horrible vermin. He lay on his armour-like back, and if he lifted his head a little he could see his brown belly, slightly domed and divided by arches into stiff sections. The bedding was hardly able to cover it and seemed ready to slide off any moment. His many legs, pitifully thin compared with the size of the rest of him, waved about helplessly as he looked. “What’s happened to me?” he thought.
It wasn’t a dream. His room, a proper human room although a little too small, lay peacefully between its four familiar walls. A collection of textile samples lay spread out on the table - Samsa was a travelling salesman - and above it there hung a picture that he had recently cut out of an illustrated magazine and housed in a nice, gilded frame. It showed a lady fitted out with a fur hat and fur boa who sat upright, raising a heavy fur muff that covered the whole of her lower arm towards the viewer. Gregor then turned to look out the window at the dull weather.