America’s election chaos spells uncertainty for fashion

Sign up to receive the Vogue Business newsletter for the latest luxury news and insights, plus exclusive membership discounts. On Sunday, President Joe Biden announced the end of his re-election campaign before endorsing Vice President Kamala Harris as his replacement on the Democratic ticket. A week earlier, former President Donald Trump survived an assassination attempt at a Pennsylvania campaign rally. The 2024 election was bound to be chaotic. Judging by the past week, the coming months are set to be the most turbulent in recent election history. Coming off of pandemic disruptions and supply chain delays, retailers are once again bracing for shifts in consumer spending as people adapt their wallets to what’s happening in the world around them. “We are definitely in uncharted territory as far as election years and presidential elections go,” says Sky Canaves, principal retail and e-commerce analyst at market research firm Emarketer. “There’s a great deal of unpredictability and consumer sentiment that’s down to factors outside of the election, and that the election could have an impact on as well.” More generally, consumer sentiment is ambivalent, with monthly consumer confidence readings bouncing up and down, Canaves says. Aaron Cheris, a partner in Bain’s retail practice, agrees: there’s a dichotomy, he says, between ‘healthy’ consumers (“albeit with more credit card debt and auto-loan defaults in 2024 than in the last couple of years”) and more cautious consumers. “[There are] lots of reports on lower spend on discretionary items, part of which was driven by pull forward after Covid stimulus, part by inflation on non-discretionary items, and part by this cautious consumer sentiment,” he says. Earnings season is just kicking off, but initial reports reflect fluctuating consumer demand in the US. Hugo Boss reported 5 per cent growth in the Americas for Q2, and cut its outlook for the year. Burberry’s store sales were down 23 per cent in the region for Q1. Richemont, though, reported 10 per cent growth in the Americas, while LVMH said the US was up 2 per cent. Elections aren’t what sway consumer spending the most, analysts say. In fact, though election years are usually a distraction, personal spending doesn’t tend to differ from non-election years, says Cheris. “That said, consumers react to uncertainty generally and this election may well be causing more uncertainty than usual,” he adds. President Biden’s exit from the race will likely reduce uncertainty, following months of speculation over whether he would stay in, says Neil Saunders, managing director and retail analyst at Globaldata. “The chatter around his candidacy will fade and the race will become steadier with a new candidate, likely to be Vice President Harris,” he says. “Among Democrat supporters, Harris might inspire a bit more optimism and excitement, which could be good for sentiment among that group.” Canaves agrees, adding that both Democratic and Republican voters are feeling optimistic about their outcomes. “There’s more of a sense of momentum and revitalisation on both sides,” she says. “That’s likely to translate into improved short-term outlooks that can drive some consumer sentiment.” The same can’t be said for independent and undecided voters, however, who are facing more uncertainty, she adds. Ultimately, a rocky election may well mean rocky consumer spending. “Unfortunately, the election period is not always the most auspicious or inspiring for Americans,” says Saunders. What should brands know? Spending tends to dip around the election, Canaves says, especially in the weeks prior and following. “Consumers might just be distracted and not thinking about shopping as much at that time,” she explains. Beyond the election dip and the fact that consumer sentiment remains ambivalent — and will likely get more so as the election goes down to the wire, according to Saunders — brands should already be thinking about the holiday period. The election falls five days into November. This holiday season, there are fewer shopping days after Thanksgiving because it falls as late as it could, on 28 November. This means brands need to strategise accordingly to maximise promotional activity, at a time when consumers are looking for discounts. “Brands have to time their marketing campaigns to take advantage of when consumers will be spending in the post-election run up to Thanksgiving, and plan for having fewer days available for marketing after Thanksgiving,” Canaves says. “But consumers might not be ready to spend that first week or two in November.” Bain’s Cheris flags that ad placements are also likely to cost more than is typical in the lead up to November. The best thing brands can do is prep for shocks and surprises, says Saunders. “This election cycle has already been full of them and there will no doubt be more before November. Brands need to understand that these things may make trade choppier.” What brands should be thinking about amid this uncertainty is their own political messaging, which is not an easy task. “There will be a lot of hand-wringing by brands about how to approach the political sentiment and the candidates,” Canaves says. “We’ve seen consumer backlash and then backlash to the backlash around certain brand campaigns and brand initiatives.” Brands should watch their step, she says — as they always should. “Brands have to tread very carefully in engaging in discussions that touch on the political and social issues that are hot-button issues, as they do with any hot-button issues, in terms of how they approach their marketing for the holiday season,” she continues. The state of consumer sentiment post-election remains to be seen. “We don’t know what kind of post-election volatility there will be, if there’ll be any social upheaval — those are the very unpredictable factors,” Canaves says. “It will also really depend on who wins.” Comments, questions or feedback? Email us at feedback@voguebusiness.com. More from this author: Mall brands’ comeback partner is the cult fashion label The Euros may be over, but fashion’s football fever lives on How the luxury food industry is taking cues from fashion’s playbook

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