11/23/2008 12:41:00 PM
In the months leading up to the presidential election, individuals worldwide held their breath at what promised to be a historic event. Political programs shot up the ratings chart as Americans tuned in to hear the latest poll numbers and pundit commentary, front lawns became littered with political signage, and Tina Fey put Saturday Night Live back on the cultural map with her famous impersonation. Regardless of what side of the party line you fall on, the anticipation was great.
The anticipation seemed all the more intense given our current economic situation so we wondered how this election sentiment has been affecting consumer behavior and in which direction it's been moving online retail.
Prior to the election, economic conditions set the shopping climate for consumers. Our unemployment rate was on the rise, consumer prices fell at a record pace, food costs were up, and new-home building slumped to fresh lows. The status of the economic downturn excerpted consumer confidence which dropped 38.1% last month, the worst decline ever for the consumer confidence index.1 Good news came in the form of oil prices dropping 22% per barrel from September to October,2 a typical pre-election sign according to David Blue, executive director of the International for Ecological Agriculture.3 A six-day run beginning October 28 also left the major indexes up by at least 17.7%.4
While consumers were shopping online for the holidays earlier than usual this year, the days leading up to the election, we started to see the gain we had over last year's online shopping market share (the gap between 2008's and 2007's trend lines) narrow. Online retail market share even fell below last year's norm, declining to 9.23% -- a record low for 2008 to-date -- on the day of our election. While it has been noted that consumers historically tend to hold back on purchases shortly prior to election day,5 these figures tell us that this year's economic uncertainty caused consumers to shop even less than expected on those few days. According to Bill Martin, co-founder of ShopperTrak, "people [were] kind of waiting -- they're not certain over what's going to happen, whether they [would] see more of the same economic program or if we're going to see some change with new leadership."5
On Tuesday night we witnessed Obama's historic victory as he became our president-elect, but in the wake of post-election Wednesday, our nation found itself in what has been deemed by some "a collective political equivalent of December 26"6 as we faced our economic reality again. That day the DOW shed nearly 500 points and consumers were not inclined to do as much holiday shopping or research online as in non-election years. As William Rutherford, president of Rutherford Investment Management explains, "yesterday there was a certain euphoria about the election, but today they are focusing on the market fundamentals, and they don't look so good."7
 U.S. Department of Labor
 New York Times, Ken Belson, A Post-Election Bump at the Pump?, 11/6/08.
 The Wall Street Journal, David Gaffen, What to Do When Everything Rallies, 11/5/08.
 CNN Money, Alexandra Twin, Dow Sheds 486 Points, 11/5/08.