Holiday Shopping, New York, USA

Much like the electorate overall this year, the consumer is feeling betwixt and between as both Election Day and the holiday shopping season near.

While the National Retail Federation said Thursday that the divisive presidential campaign between Donald Trump and Hillary Clinton is hurting retailers and keeping consumers conservative in their holiday budgets, research by Synchrony Financial found shoppers to be more optimistic headed into the holiday season than they were last year.

But both groups agree that overall holiday spending will be up solidly from last year’s disappointing performance. The NRF continues to expect that November and December sales will increase 3.6 percent to $655.8 billion, excluding autos, gas and restaurants. Synchrony is somewhat more optimistic in its forecast, predicting holiday retail sales will rise between 3.6 and 4 percent.

The holiday season is again expected to be swayed by big gains on the e-commerce side of the equation. Adobe predicted online shopping this holiday season will account for $91 billion in sales in the U.S., an 11 percent gain.

Looking at data from 1 trillion e-commerce visits to a network of more than 4,500 retail web sites, Adobe researchers predicted the season would see 53 consecutive days of online sales of over $1 billion, up from 31 consecutive days last year.

First, though, retailers and consumers need to get past November 8, when Americans head to the polls to (hopefully) bring a close to the political drama that’s driven much of the national conversation online and off this year.

“Everywhere you turn — whether you’re picking up a newspaper or watching television — political advertisements are taking up ad space that retailers typically use to get holiday shopping on the minds of consumers across the country,” NRF president and chief executive officer Matthew Shay said. “Once the election has passed, we anticipate consumers will pull themselves out of the election doldrums and into the holiday spirit.”

NRF’s annual survey of consumer holiday spending, conducted by Prosper Insights & Analytics, showed that consumers plan to spend an average of $935.58 this year, compared to $952.58 last year, which was a record amount. The figures include spending for gifts, self-purchases, food, flowers, decorations and greeting cards for Christmas, Hanukkah and Kwanzaa.

(NRF officials indicated that the latest survey doesn’t contradict the association’s forecast, which would include, for instance, the purchase of a refrigerator. The more recent research provides a snapshot of spending intentions for the full holiday season and could change after the election).

Gift cards remain among the most sought-after presents. Sixty-one percent of those surveyed want them. Clothing and accessories represent the second most-desired holiday gifts. Fifty-four percent of those surveyed want them.

Books, CDs, DVDs and videos are lower down on the wish lists, with 40 percent seeking those. NRF noted the drop is due to digital downloading.

Consumer electronics will be shopped by 32 percent of consumers; jewelry and home decor, 23 percent; personal-care and beauty items, 21 percent; sporting goods, 19 percent, and home improvement items, 17 percent.

“The election is a huge piece of it,” said Katie McBreen, an NRF vice president, explaining the drop in intended holiday spending. “We’re hearing it not just from consumers. We are hearing it from ceos in the stores talking to their customers each and every day. These are really unprecedented times. We never had an election season quite as negative as this one. It’s hard to not impact the psyche of people. Once this is over, consumers are going to get out and shop.”

In an NRF flash poll conducted last week, more than a quarter of consumers said the election will impact their spending plans for the holidays. Forty-three percent said they are more cautious with spending due to the uncertainty of the election season.

Spending has historically slowed before presidential elections, when shoppers are distracted and it’s more expensive for retailers to push foot traffic with advertising.

AlixPartners’ Noam Paransky, a director in the consultancy’s retail practice, has previously noted that sales growth slowed to 2.8 percent in September, down from 3.5 percent earlier this year, and said spending would rebound following the election.

Many experts have said that shoppers over the longer run are more apt to spend according to their individual economic standing than the overriding political scene.

Consumers are generally feeling good, although they have trended away from apparel and are putting more money toward experiences and other categories, such as eating out and electronics.

Synchrony noted: “Motivated to manage the stress of the season and their budgets, more than half of holiday shoppers [polled] plan to start their gift-buying earlier this year to find deals and help spread out spending. Heading into the holidays, 55 percent of survey respondents are merrier about money and report a better household financial situation than last year.”

Moreover, 34 percent of respondents are expecting to dole out more money on gifts this year, which compares to 32 percent last year. Among those expecting to spend more, 45 percent “attribute it to improved personal finances and increasingly longer lists.”

But that doesn’t mean they’re undisciplined consumers.

“To make the most of their money, shoppers are seeking out sales (85 percent) and setting a holiday budget (59 percent compared to 53 percent last year),” the researchers said. “Even with favorable finances, the ability to manage their budget with extra holiday expenses is cited as a key concern among survey respondents.”

Bart Schaller, executive vice president and chief marketing officer at Synchrony Financial, said consumer confidence “continues to improve and we see it shaping the season in the form of increased sales. But caution overrides personal optimism and shoppers tell us they’re carefully planning, pacing and prioritizing their holiday purchases to stay on schedule and on budget.”

It is a budget process that began well before the season, the researchers said, adding that “half of survey respondents report budgeting all year for holiday expenses and 28 percent purchase presents throughout the year.”

When shoppers do start to actually spend for the holiday and turn to their digital device, they might find what they want on the go, but buy it elsewhere.

Becky Tasker, managing analyst at Adobe Digital Insights, said mobile revenue is not growing at the same rate as mobile browsing. Although mobile visits are expected to account for 53 percent of shopping visits (leaving 47 percent for desktop), mobile accounts for only 34 percent of sales. She said that mobile retailers face in-cart issues, with the average order value typically being lower on a smartphone than a desktop browser.

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