Photo by Becca Tapert on Unsplash
How Will Valentine’s Day Fare for Retail in 2024?
Valentine’s Day sales are being predicted, and while some believe consumer spending will fall flat, the National Retail Federation’s (NRF) data concludes that nearly $14.2 billion of total spending on significant others is expected this year.
The NRF and Prosper Insights & Analytics have released their annual survey revealing the spending scale and gift preferences for this important holiday. As a result, retailers are gearing up to cater to customers’ needs this year, offering a broad range of meaningful and memorable gifts to help express their feelings.
The survey, conducted in the first week of January, collected responses from 8,329 adults about their Valentine’s Day shopping plans. NRF President and CEO Matthew Shay stated, “With consumers prioritizing their spouse or significant other this year, retailers expect to see a shift in spending for certain gifting categories.”
Candy tops the list of preferred gifts at 57%, followed by greeting cards at 40% and flowers at 39%. More than a third of the surveyed individuals are opting for a special evening out (32%), while others are choosing jewelry (22%), clothing (21%), or gift cards (19%). The spending on jewelry, flowers, clothing, and evening outings is predicted to break previous records, with jewelry alone expected to rake in $6.4 billion.
About 53% of respondents plan to celebrate Valentine’s Day, which aligns with last year’s statistics. The total Valentine’s Day expenditure is forecasted to remain steady at $25.8 billion, making it the third highest in the survey’s history after last year’s $25.9 billion and 2020’s record of $27.4 billion. Notably, people ages 25-34 are the most inclined to celebrate the occasion. Social media has already shown the frenzy that occurred for limited-edition Valentine’s Day Stanley cups.
On average, customers are expected to spend $185.81 each, which shows a slight increase from the past five years. Unlike last year, when people used Valentine’s Day to appreciate all significant relationships, this year they are focusing more on their romantic partners. NRF’s expected total spending on significant others is the highest it’s been in the history of the survey.
For those not celebrating the romantic side of Valentine’s Day, 29% still plan to commemorate the day in their own ways. Some will treat themselves, while others will arrange a gathering with single friends or family members.
Furthermore, Insider Intelligence states that “60% of US adults believe the holiday is for both romantic and platonic relationships, according to YouGov. Brands should see that as an opportunity to reach young, single, or not-quite-committed consumers in creative ways this Valentine’s Day.”
Online shopping continues to grow in popularity for Valentine’s Day gift seekers, with 40% choosing this method, a rise from 35% last year. However, traditional shopping isn’t being left behind, with consumers still planning to visit department stores (33%), discount stores (31%), and florists (17%).
Interestingly, while jewelry is where most of the money is going, the most popular gifts remain classic candy and greeting cards. Diamonds in particular will be an interesting point since more supply can be moved, but overall sales might be lower due to the reduced cost of synthetic diamonds. Moreover, one-third of consumers are still fascinated by experiential gifts.
The number of people in the U.S. observing the holiday has declined by 10 percentage points over the past 15 years to 53%. Despite this, almost one-third of those not officially celebrating Valentine’s Day still intend to acknowledge the day somehow, providing opportunities for brands to engage these consumers.
Perhaps retailers and businesses are not taking full advantage of the holiday for their consumers. Social holidays like Valentine’s Day and Halloween can be leveraged to benefit businesses. Websites can be updated with festive landing pages or holiday-themed games to attract more traffic. Social media platforms can be used to engage users by posting themed content and using relevant hashtags. Regular emailing strategies can be enhanced by including holiday wishes and subtly highlighting services or promotions. These occasions also present opportunities to give back by offering small gifts or discounts to clients or appreciating employees with treats.
Discussion Questions
Despite a decreasing number of people observing Valentine’s Day, how can retailers optimize their strategies to ensure they’re taking full advantage of this consumer behavior trend?
Considering the prevalent affinity for traditional gifts like candy and greeting cards vis-à-vis high-value items like jewelry, how could the dynamic between pricing, product availability, and consumer preference be balanced, particularly concerning the influx of cheaper alternatives such as synthetic diamonds?
How can businesses create an integrated shopping experience that marries the convenience of online platforms with the tactile allure of physical retail spaces, especially during socially significant holidays like Valentine’s Day?
Poll
Loading …BrainTrust
Michael La Kier
Vice President, Brand Development - IGA, Inc.
Anil Patel
Founder & CEO, HotWax Commerce
From our own data, Valentine’s Day will see some modest growth this year. But this is likely to come from higher prices, especially for meals out, than it is from volume growth. We have also seen the growth of a larger (although still niche) anti-Valentine’s Day contingent who resent inflated prices, fixed menus, etc. for the day and so tend to shun the occasion and do something else at other times, or ignore the event completely. From my various store visits, most retailers have good availability and are pulling out all the stops for in-store activation. That said, I am not seeing much innovation: it’s mostly the same old same old.
Truth is, it’s a pretty de minimis holiday compared to Holiday, Back to School, Easter or July 4. I don’t think there’s a big ROI in innovation. Flowers, candy, booze and dinner are the Valentine’s Day staples. The real innovation was China’s Singles Day…..but that never caught on here. Self-gifting of whatever you like!
I like that. I think that could boost retailers’ revenue. “Self-gifting of whatever you like!”
Agreed, it is a niche occasion. But compared to UK supermarkets, I think the US equivalents could do much better. M&S in particularly is very good at offering a really great menu of special Valentine’s dine-in ready meals at special prices. And while not extensive, it’s own-brand chocolates and treats are second to none. At Whole Foods someone sticks a heart on a sign for shrimp and they think it’s special.
In my opinion, retailers can optimize their Valentine’s Day strategies by embracing creativity and leveraging the holiday’s emotional appeal. They can offer themed promotions, create engaging content on social media, and enhance the shopping experience both online and offline. Balancing the pricing and product availability is crucial too, ensuring a mix of traditional gifts like candy and greeting cards alongside higher-value items like jewelry.
Retailers can also tap into the growing trend of experiential gifts to cater to diverse consumer preferences. By integrating online platforms with physical stores, businesses can provide convenience while maintaining the tangent experience customers crave during special occasions like Valentine’s Day.
There has been a significant uptick in spending for social gatherings in the post-COVID period. That being said, Valentine’s Day has always been about the one-on-one connection (Galentine’s Day get-togethers being the notable exception). Spending will likely be up, but lack the huge bump that we’ve seen from other more social occassions.
I was in Target yesterday, checking in on their seasonal conversion progress. I took a lot of pictures, and in reviewing those pictures I somehow missed any Valentines presentations they may have set up. I have to believe they had some kind of presentation in a couple areas of the store, but they weren’t high profile enough for me to notice and photograph. And Valentines Day is part of the seasonal conversion process. Odd that it was low profile enough for me to have missed it.
The headline for today’s discussion should be “The number of people in the U.S. observing the holiday has declined by ten percentage points to 53%.” Now that is interesting.
My wife and I do the Valentine’s Day shift. If it comes on Wednesday, the flowers arrive on Saturday. It is usually a romantic dinner, but never the overpriced mediocre ones; it is a day before. This year, dinner and dancing on Monday…
I think this is a great point, Gene. Our tracking shows a larger number of people celebrating in their own way and avoiding a lot of the commercialized hype! Having a meal out on Valentine’s Day itself is not always a great experience!
Creating gift bundles or holding cross promotions with other businesses are just two ways retailers can encourage Valentine’s Day shopping. Indies do a better job than chains, although I haven’t seen much of about Valentines Day from any retailer this year.
Most retailers tend to take Valentine’s Day for granted, knowing consumers can always be counted on to buy candy and whatever traditional gifts they place in the seasonal aisle, on speed bumps, or in merchandise outposts throughout the store.
Valentine’s Day is a fun time to watch people switch into panic mode as they race around stores in search of the “perfect” last minute gift. We’ve all been there. Retailers would be well advised to have associates on hand to offer quick suggestions and gift advice.
As red and pink candy and cards bring a burst of color to stores, retailers are also paying close attention to what’s trending online.
Social, experiential trends like Galentine’s Day get-togethers and self-care beauty hauls are driving sales among younger women.
Savvy retailers celebrate Valentine’s Day with new themed campaigns, curated goods and dedicated hashtags to improve product discovery, especially in beauty and grocery.
Unlike Halloween, where the shopping season extends for weeks before the actual event, Valentines Day is a much more short-duration (and impulse-driven) event. My local Kroger store had flowers and candy on full display yesterday, but my experience merchandising jewelry tells me that the peak shopping doesn’t really begin until next Sunday or later.
That being said, I expect a modest increase in Valentine spending — in sync with other recent holiday shopping — although a lot of the emphasis has shifted to special-occasion dining out instead of cards and candy.
Not to be a jerk, but having been in the party supply business, Valentines Day just wasn’t that much of a money maker. Flowers and jewelry were the items.
To put this in perspective though, total holiday sales were $964 billion. In that context $16.4 billion is nothing to draw a lot of conclusions from. I’m more intrigued with the Chinese Singles Day phenomenon.
People are tired of….stuff. Experiences rule, and Valentine’s day offers a great excuse to go out to a restaurant, or a movie, or a swanky bar, or wherever. A box of chocolates does not cut it any longer. Flowers or other consumables are reasonable alternatives to experiences.
Here in the Southeast restaurant reservations are still difficult, so I am not seeing any downturn in this made up holiday. Just don’t count on boxes of candy driving the growth!
Most in-store V-Day displays I’ve seen are a bit tired, but on-line are more interesting. Grocery stores in particular have the oppty to really ramp up their efforts with special meal kits, cooking advice, specialty product demos, etc. for a variety of celebrations – romantic, Galentines, singles, groups, etc.
Consumer sales will exceed last year and may set a new record. While inflation has reduced buying power, Valentine Day is a cheap holiday when compared to other holidays. Inflation alone will exceed last year’s total. This holiday results in spending a little more for a loved one, which may have a minimum spending reduction for another holiday. Consumers will and can spend for a break in the norm. The weakness appears to be the retail offering. Mostly we just see one candy brand with little consideration as to the relationship. New relationships are different then many years of marriage.