Is it love … or guilt? No matter why shoppers head out to buy Valentine’s Day gifts each February, the fact is that they do buy them. And while chocolatiers, jewelers, and florists get a sizable chunk of that business, there is plenty of spending to go around. In fact, consumers will ring up a staggering $17.02 billion in Valentine’s Day sales this year, according to the National Retail Federation (NRF). In addition, “traditional” gifts are predicted to experience a slight drop in popularity.
Creative Retailers Can Cash In
This means that the savvy retailer whose products are not necessarily big sellers on Valentine’s Day still has a chance at a slice of that profit pie. According to retail consultant Bob Phibbs, the No. 1 way for retailers who do not sell candy, bling, flowers, or cards to get a piece of the business is simply to “give it some thought.”
He explains, “Don’t just buy product and slap it on the counter and think, ‘Oh, it’ll run out of here.’ That is probably one of the most frequent things that I see. It’s like [retailers] got the idea, but they didn’t think about the execution.”
Phibbs, who bills himself as “The Retail Doctor,” says it amazes him that so many retailers don’t make better use of their display windows. An effective Valentine’s window for a bed and bath retailer, for example, could feature white towels contrasted with red bath mats and accessories, highlighted with an appealing Valentine’s Day-themed product (such as a stuffed animal with a red satin bow around its neck) that could also be displayed at the cash register for impulse buys.
And, Phibbs says, retailers need not feel that they have to buy hundreds of an item they will highlight for Valentine’s Day. “Maybe buy 50, and make it something that is compelling and fits your brand or your store.”
The Power of Suggestion
Any store can be a source of a Valentine’s Day gift, says retail advisor Jim Dion of consulting firm Dionco, Inc. “A box of chocolates is nice, and flowers are nice, but three days later you’ve gained two pounds or the flowers are dead. In tough times, it’s probably better to give somebody a practical sign of love.”
Retailers should make Valentine’s gift suggestions through in-store signage or by having employees gently remind customers of the holiday. “Even in a grocery store,” Dion says, “the person putting the stuff into a bag might say, ‘Have you thought about a gift card for your mom for Valentine’s Day?’ Suggestion selling at the point of sale can be very powerful.”
Valentine’s Day is a holiday of love (and sometimes guilt), Dion says, and this means that customers may spend freely. “When you love somebody … you want the best for them, so that would argue for a little more expensive item.”
A man might spend a fair amount on his wife’s Valentine’s Day gift, Dion says, but less on his children or friends. The NRF’s Valentine’s Day Consumer Intentions and Actions Survey validates this notion. With six out of 10 consumers planning to celebrate Valentine’s Day, the majority of them plan to spend the most ($79.99) on their spouse or significant other.
Men Are the Big Spenders
Retailers might want to keep a sharp eye out for gift-shopping men because, according to the NRF survey, they will spend the most on the red heart holiday: $163.37 compared with $84.72 for women. In addition, people will spend an average of $5.75 on friends; $4.05 on children’s classmates and teachers; and $3.02 on coworkers.
Valentine’s Day buying, says Dion — a psychologist — comes down to one or two human emotions, either love or guilt. A person who is buying for love wants a tangible representation of his or her love as a gift. “If it’s a gift of guilt,” he says, “you want the person who is receiving it to be the ‘guilt-ee.’ It should be a really good gift so they feel badly about how much you spent on them.”
Whatever the reason, the average consumer, says the NRF, will spend $122.98 on Valentine’s Day this year. That amount of money seems, as Phibbs suggested, worth some careful thought on the part of retailers. “It’s a nice holiday,” Phibbs says. “You don’t have to worry about religion or economics. It’s just a matter of being nice to somebody.”
2008 Valentine’s Spending by the Numbers
$160.37 – amount 25- to 34-year-olds will spend on Valentine’s Day gifts
$145.59 – amount 18- to 24-year-olds will spend
$110.97 – amount 55- to 64-year-olds will spend
$122.98 – amount the average consumer will shell out
56.8% – percentage of consumers who will purchase a Valentine’s Day card
48.2% – who plan to celebrate with a night out
48% – who will buy candy
35.9% – who will say it with flowers
17.2% – who will buy a gift for their pet (for a total of $367 million spent on furry friends)
12.3% – who will give a gift card
11.8% – who will purchase clothing
*Source: National Retail Federation 2008 Consumer Intentions and Actions Survey conducted by BIGresearch.
Multi award-winning Carol Carter has been a business journalist since 1978, when she was among the founding staff of Atlanta Business Chronicle, for which she served as editor, managing editor, reporter, and columnist. She covered retail news for the Chronicle for five years, wrote a column about retail stores for Southline newspaper in Atlanta, and was the consumer reporter for NBC-affiliate WXIA-TV’s Noonday show.