Politics’ Unexpected Effects On Retail

On Thursday night, millions of Americans tuned in to watch something that might on the face of it seem surprising: the first televised debate between 10 of the 2016 GOP presidential hopefuls. It’s surprising in the sense that if one were looking to create a big ratings draw, a 10-way conversation between a billionaire, two former governors, three sitting governors, three senators and a brain surgeon might not be one’s first choice for programming.

But the real world often exceeds even our most colorful flights of fancy and so, according to Nielsen, 24 million Americans tuned in to watch just that conversation. That number is more than three times the number of people who tuned in to watch ABC’s highest-rated 2011 televised debate between a much reduced field of 2012 Republican presidential candidates, and about 12 million more people than watched CNN’s primetime coverage of the vote counting on the night of the presidential election in 2008. We will let our colleagues at Politico tell you who won the debate politically speaking, but as students of consumer culture and buying in, we can declare that the first big winners of this year’s presidential election were actually Fox News and Facebook, who co-sponsored the event.

But as it turns out, tuning in to a debate between the one person who will be picked to make a serious bid for the White House and the 15-16 other people who are on their way to being left by the wayside (depending on who the VP pick is) is not the only strange thing politics drives in the American consumer — and it is not even the strangest thing.

Politics have a strong effect on people — even when they aren’t voting or doing anything even remotely connected to voting, such as arguing about issues on Facebook or Twitter. Politics follow the consumer and influence what they buy, election cycles exert pressure on how much we shop (and where), and the emergence of big data has allowed marketers to watch these trends and adapt how they move to get their message out there.

So what are the politics of retail spending? Well…

How You Vote Influences What You Buy

Way back in 2008 — shortly after that presidential election but before the economy cratered — there were a series of news stories about the sudden spike in guns and ammo following Barack Obama’s victory. What those stories may have neglected to mention were two things.

  1.    Guns and ammunition sales go up every time Democrats win an important national election;
  1.    Democrats respond to important Republican victories by buying lots and lots of additional alcohol.

And while it may be somewhat disturbing to note that, statistically speaking, a largish number of Americans respond to political disappointment by binge drinking or arming themselves — those results are at least not puzzling insofar as both at least make sense as an extension of either group’s political commitments.

But as a recent WSJ survey demonstrated, there are many such expected correlations between political affiliations and commerce habits.

Republican consumers also tend to be more personally financially conservative, save larger amounts of money and replace products less often. Consumers who vote Democrat, on the other hand, are more likely to use credit products, are more likely to be early tech adopters and are more likely to purchase a product associated with a cause.

That stuff is all pretty unsurprising, until it starts getting a little weird.

Republicans tend to read product reviews before buying, much more so than Democrats, but Democrats read ingredient labels at the grocery stores – which Republicans don’t. Republicans’ preferred soda is Dr. Pepper — most reported having drank it once in the last year and really enjoyed it. Democrats prefer Ginger Ale and the preferred brand is Canada Dry. Democrats drink more coffee than Republicans — about a gallon more  year — but Republicans do not believe in switching to decaf and are twice as likely to drink their coffee at full diesel.

And perhaps the strangest result: Republicans report their spouse exerts critical influence over all their buying decisions, regardless of gender. Democrats statistically speaking do not care what their spouses think and truest their own judgement at the checkout.

“I have no idea with that one, or why that would be the case,” noted the WSJ staff member who did the survey.

Elections Affect How We Shop

Though the tenor of an election can make a big difference here — if economic weakness is a main talking point in an election specifically — elections tend to exert positive pressure on retail spending. Google notes that though the few days immediately prior to an election (and election day itself) tends to see a dip in spending activity online and in-store, run-up period between the conventions and the actual vote tend to see increased activity across the board.

“In the months leading up to the election we saw substantial year-over-year growth in the market share of online shopping and classified sites. Market share, as is typical throughout the year, peaked on weekends and were stronger and generally in line with the same days in 2007,” Google noted on its blog.

That activity was particularly notable in 2008 as early parts of the financial crisis were already in play by the pre-election run-up, and unemployment rates were climbing (still slowly) and the housing market was beginning its hard stall.

Economic conditions were stronger in 2012, and pre-election uptick was more noticeable — something about voting and talking about the economy a lot seems to make consumers want to shop.

But election years don’t just goose the amount of consumers who want to shop, it also has some measurable effect on where consumers want to spend money. Small businesses, particularly locally owned retailers, do somewhat better in election years. That is particularly true of urban (as opposed to suburban or rural) businesses.

During election years, SBA stats get mentioned an awful lot – for instance, stats that say that small businesses account for 42 percent of U.S. private sector payroll and 63 percent of new jobs. In 2012, between the two candidates, the words “small business” were uttered over 10,000 times on the campaign trail.

Why? Well, as we all know, the power of suggestion is strong with consumers.

Expose consumers to enough political speeches with the idea that the small business is the bedrock of democracy — and consumers start patronizing them more. On average, small business in the U.S. get a 10 percent “election bump” purely by the repetition of positive things said about them throughout the election cycle.

The effect, however, is highly limited and very temporary. A month after a national election has ended, it is not observable at all.

How Marketers “News Jack” For Fun And Profit During Elections

Other than having an opportunity to use political affiliation to zoom in on other parts of consumers’ taste or a chance to drive more traffic to their site/store, elections also offer brave brands a chance to ride the viral wave of election enthusiasm.

During the 2012 presidential race, Pizza Hut made some news (and scored some sales) with its great Pizza Debate promotion where it offered unlimited pizza (or $15,000) to anyone who managed to ask either candidate if they preferred pepperoni or sausage on their pizza during a town hall-style debate.

FedEx effectively parodied negative political campaigning by highlighting its ability to make “good” promotional material, even if their makers are not delivering “good” messages. Their tagline:  “Competition may not always be professional, clean, or elegant, but at least your promotional materials can be.”

However, the winner, in PYMNTS’ opinion, was JetBlue, which made an ad for everyone who ever rolled their eyes at someone threatening to move to Canada if the other guy wins (AKA: everyone who has never threatened to move to Canada if the other guy wins). In short, JetBlue offered to fly those people to Canada, or any other number of lovely places.

To participate, customers had to visit the JetBlue Election Protection website, choose their desired candidate and a destination (from a curated list) where they would like to live out the rest of their days (or that guy’s administration). Two days after the election, JetBlue made good and sent about a thousand people to a better life under a new regime.

Bonus, the rest of us didn’t have to hear about it anymore.

So how will politics affect commerce this time around?

Time will tell, but it seems as long as Donald Trump stays in the race, there will certainly be valuable airtime for sale around the debates.