Consumers are set to open their wallets and spend on the people most important to them on Valentine’s Day, according to a recent study by the National Retail Federation.
Overall spending on the holiday will hit $18.9 billion this year, the highest total since NRF started its survey in 2010. The average consumer celebrating Valentine’s Day will spend $142.31 this year, up 6% compared with last year.
“It’s great to see consumers coming out of their shell this year, looking to spend discretionary budgets on those they love once again, though I fully expect many to continue to look for ways to cut costs where they can,” said Pam Goodfellow, principal analyst at Prosper Insights, which conducted the study on behalf of the NRF. “While many will splurge, some will still look for simple and affordable ways to show their appreciation for friends and family, and celebrate in a way they are most comfortable with.”
Indeed, with consumer confidence up three months in a row, spending is projected to be strong, particularly on the biggest ticket item on Valentine’s Day—jewelry. Here’s how consumers plan to spend their money this year:
Half of those surveyed will buy candy, with $1.7 billion in projected spending.
1 in 5 are planning to buy jewelry, with spending projected to hit $4.8 billion, the highest amount since the NRF started tracking in 2010.
A third are planning a special night out, with $3.6 billion in spending projected.
1 in 5 consumers will buy something for their pets this year, spending an average of $5.28 each for a total of $703 million in projected spending.
So what can smart marketers do to maximize opportunities this year? With Valentine’s Day falling on a Saturday, consumers are expected to shop for the holiday right up until the last minute. Brands should optimize their offerings to be ready for those looking to make those “just in time” purchases.
Luxury brands like Tiffany & Co. are focusing on high-end gift guides like its “Concierge of Love.” In store fulfillment may be key for retailers like Gap and Talbot’s, both of which are offering consumers shopping online the ability to pick up items in store if they don’t have time for delivery.
Marketers should also keep these critical demographic differences in mind when dealing with those last minute consumers:
Men will spend an average of $123.94 on their significant others, compared with $53.80 for women.
Women are more likely to pick up gifts for multiple people, like children’s teachers or friends, and to shop at a discount store.
Men spend five times as much on jewelry for an average of $69.87. They also significantly outspend women on flowers.
Women plan to give more cards and candy than men.
Other shopper preferences can be found in generational differences. Smartphones are the most used tool by millennials in terms of doing research about products, according to a recent Annalect study, “#GenerationTech: Millennials & Technology”. Most millennials will determine what they’re going to buy on their smartphones, then turn to their computers to complete the purchase.
That means targeting ads to those opening their wallets will be crucial for capturing market share. The most effective ads and promotions will take these statistics and demographic differences into consideration when looking to maximize reach and engagement.