As election day draws closer and early voting begins in some states, many brand and retail leaders have asked us about the 2024 presidential election’s potential impact on consumer behaviors and spending habits. In this article, we’ll answer some common questions about consumers and the election and share key considerations for brands and retailers.
How will the election impact consumer behavior?
The 2024 presidential election between Donald Trump and Kamala Harris is not likely to have an immediate, widespread impact on consumer behaviors. The more probable consumer impacts will be longer-term, stemming from the economic, social and environmental policies enacted by the new president and his or her administration.
Pre-Election Impact on Consumer Spending
Analyzing the seven-day lead-ups to the 2016 and 2020 presidential elections, the only categories that saw clear, consistent boosts were seasonal products like Halloween candy and Thanksgiving decorations. There were no other noteworthy categories that saw similar spikes both years, indicating the election itself will not be a key driver of consumer spending in any specific, predictable areas.
There were, however, a handful of very small, niche categories that saw disproportionate growth in the week leading up to the 2020 election specifically. These categories included books about political & social science, home security & surveillance systems, and power sources like generators and power inverters. While these categories doubled their weekly sales leading up to the 2020 election, it’s important to note their very narrow reach, with fewer than 0.1% of U.S. households purchasing.
The 2020 election also coincided with the beginning of a major wave of COVID-19, which did influence consumer behavior. By election day 2020, weekly COVID cases were at their highest rate since the onset of the pandemic. Household penetration spikes in toilet paper and a handful of grocery items like meat, bread and dairy in this period are more likely attributed to pandemic preparedness than election influences.
Post-Election Policy Impacts on Consumers
The incoming administration will have influence over numerous policies that impact U.S. consumers. Major policy shifts typically take time to implement, so changes are likely to occur over periods of months, if not years. Even so, understanding key areas of potential impact and how to contextualize them for your brand can help businesses feel better prepared. The following policy areas have been cited frequently in this election cycle and may tie directly to consumer behavior or spending in the future.
Inflation
Rising prices have consistently ranked as one of the top issues for voters in this election. While both candidates have stated their intent to bring down prices, inflation is a complex issue, and it is not entirely in the president’s control to fix. Policies around taxes, tariffs, immigration, labor and energy all have the potential to contribute to or combat against inflation in different ways.[1]
It’s also important to note that consumer perception doesn’t always align with published numbers. In late 2022, three-fourths of consumers believed the U.S. was in a recession, despite most economists saying that wasn’t technically true. Shoppers who don’t feel financially secure will be more sensitive to what they perceive as higher prices. Currently, less than half of U.S. consumers say their financial situation is positive.
Given the complexity of inflation and the many factors influencing it, brands and retailers need multifaceted approaches to tracking and strategizing. Those who combine broader economic tracking with consumer sentiment tracking among their buyer base will be better positioned to weather any fluctuations. Comparing your current promotional strategies to your competitors can also be helpful in a market where consumers are particularly price-sensitive.
Taxes
Taxes are another key issue for many voters, with most hoping for more paycheck in their pockets at the end of the day. Tax cuts, tax deductions and tax credits can all help address these concerns in a tangible way, and in some cases, incentivize certain behaviors like clean vehicle ownership, higher education, or home ownership.[2, 3]
Knowing the basic demographic breakdown of your consumer base is a great way to anticipate the degree of impact posed by future tax changes. Average household income, presence of children in the household, marital status and home ownership are all variables you can use to determine whether or not your shoppers will benefit from proposed tax cuts or credits, now and in the future.
Immigration
According to the U.S. Census Bureau and the Pew Research Center, just under 14% of the U.S. population is foreign-born.[4, 5] Immigrants contribute trillions of dollars to the U.S. economy through consumer spending, making them a key cohort for brands and retailers to understand. The recent surge in immigration is estimated to increase the GDP by a projected $8.9 trillion over the next decade, driven in large part by increased population numbers and personal consumption expenditures.[6]
The immigrant population in the U.S. is also contributing to shifting product preferences and flavor profiles, something we’ve seen exemplified in first-generation households with Gen Alpha children. Any major shifts in immigration policy have the potential to impact the overall size of the immigrant population in the U.S., as well as the composition of the immigrant population, if certain countries are more heavily impacted by new quota expansions or restrictions.
Knowing your brand’s reliance on foreign-born consumers and their families can help you estimate the impact of future immigration policy decisions. Numerator provides brands and retailers the opportunity to analyze their interactions with first, second and third-generation U.S. consumers through our deep consumer understanding and comprehensive shopper profiling.
Social Welfare Programs
The Supplemental Nutrition Assistance Program (SNAP) and Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) are government welfare programs aimed at helping low-income households afford necessary food & nutrients. These programs stimulate over a hundred billion dollars in annual consumer spending, and while usage has declined since its peak during the pandemic, these benefits are still used on roughly 4.5% of all in-store grocery trips across the country each month.
Past Numerator research has shown that close to 17% of U.S. households use these benefits on a regular basis, defined as 12+ times in the past 12 months. SNAP and WIC benefits are a crucial safety net for struggling Americans as well as a significant driver of consumer spending, meaning any future changes to eligibility or payment amounts will directly affect sales numbers for many brands and retailers.
There are many angles to explore when it comes to understanding how SNAP and WIC impact your brand or business, including what percent of your shoppers utilize these benefits or how often your products are purchased on SNAP/WIC shopping trips. Even brands or retailers that do not sell SNAP/WIC eligible products should consider exploring these dynamics, as a household’s ability to afford basic necessities will precede their ability to afford anything else you’re offering them. More in-depth information on SNAP and WIC shopper dynamics can be found in our SNAP Insights Center.
Environmental Policies
Climate change is already influencing consumer behavior, with rising temperatures and more frequent natural disasters significantly impacting purchasing patterns across the country. While seasonal items and emergency-preparedness products have some of the clearest climate-driven demand shifts, additional categories see impact through weather-driven supply chain disruptions. Additionally, climate concerns contribute to population shifts within the country, with thirty percent of Americans saying they have or are considering relocating due to climate-related issues. Although government policies to combat climate change are unlikely to produce immediate results, they may mitigate further impact down the line.
Brands and manufacturers should adapt strategies to accommodate weather-driven consumer shifts, both immediately and for the future. Understanding environmental dynamics is essential for timing promotions, adjusting supply chains, and developing targeted marketing strategies that align with the evolving climate and its effects on consumers. Learn more about this topic in our recent analysis, How Weather and Climate Changes are Shifting Consumer Behavior.
Home Ownership
Housing is the number one expenditure for most U.S. homeowners and renters. Currently, about 66% of Americans own homes, but this number is notably lower among younger generations and Black and Hispanic individuals.[7] Interest rate cuts and policies aimed at increasing the housing supply and making home ownership more affordable have the potential to increase overall home ownership, and also to spur consumer behavior shifts across categories and fulfillment methods.
Our recent “Home Hunters” analysis shows that homeowners spend more across a variety of categories compared to renters, including home appliances, decor, and home improvement products. They also spend more on groceries, less at limited service restaurants, and shift more of their spending online.
An increase in home ownership would benefit brands and retailers selling home-related goods, and could also bring under-represented demographics into these categories. Knowing the current home ownership status breakdown of your buyers is the first step in understanding how home ownership incentives could impact them, while additional psychographic insights like current financial attitudes and savings habits can help predict whether they’ll be in a position to take advantage of lower interest rates or first-time home buyer credits.
Tracking Election Impact Moving Forward
From inflation to taxes, immigration policy, social welfare programs and environmental regulations, the impact on consumer behavior stemming from this year’s election will likely unfold gradually. Brands and retailers that proactively monitor these developments and understand their consumer base will be better positioned to navigate the evolving landscape and adapt their strategies to align with the needs of their consumers. Our team is here to help. If you’d like to dive deeper into any of the research angles mentioned above, contact your Numerator representative or reach out to our team today.
Additional Resources
- Inflation: What It Is and How to Control Inflation Rates (Investopedia)
- What are Tax Cuts? (TurboTax)
- Credits and Deductions for Individuals (IRS)
- What Data Says about Immigrants in the U.S. (Pew Research Center)
- How Immigrants Have Dispersed Throughout the Country (U.S. Census Bureau)
- Effects of the Immigration Surge on the Federal Budget and the Economy (Congressional Budget Office)
- Homeowner Data and Statistics 2024 (Bankrate)
