How do we expect valentines day to play out in the Australian retail space this year? Whilst there’s limited research from Australia on planned spending for the holiday in 2018, information from the national retail federation (NRF) in the US paints somewhat of a underwhelming picture.
The amount of people who plan on celebrating valentines day has been falling since 2007. According to the NRF, there’s expected to be about 55% people celebrate in 2018 down from 63% in 2007. And whilst overall spend is expected to be up this year (about $19.6B in the US), it’s only grown at a compounded annual growth rate (CAGR) of 1.4% since 2007. Hardly exciting. Especially when you consider yearly inflation in the US has averaged at about 1.8% since 2007 and spend over the same period in the US for christmas had a CAGR of 2.4%.
If you’re a younger consumer expect to pay more this valentines day. On average, consumers 34 years and younger make up 43% of spend in the category. Also expect to pay more for the less time you’ve been in a relationship or if not yet married.
And men get the raw deal (as usual), with men traditionally the biggest spenders for the Valentines day period. According to Business Insider, men in Australia spend around $123.10 compared to (a measly) $90.54 for women during the Valentine’s Day period from February 1 to 14. But men, thank god you’re not in the US where the average spend per male is nearly twice as much as here in Australia.
So with Valentines day just around the corner, what major trends do we see driving the market for retailers?
Forget the traditional gifts, consumers want an “experience”.
As you’d generally expect the major categories of consumer spend in 2018 are jewlery, an evening out, flowers, food and clothing (these 5 categories make approximately 72% of the category).
But roses and chocolates are so 2017… 40% of consumers 24 years and younger expected to gift an “experience”. Whilst dining and / or movies will always remain a popular traditional option, one area we expect to see growth in is “non-traditional” experiences. This includes things such as amusement parks, cooking classes, sky diving or even dance lessons. Or if you’re a tightass, even cooking at home.
Customisation and personalisation is king.
Consumers are getting more creative and demanding greater personalisation from retailers. And this trend is no more evident than valentines day. We’re seeing an explosion of personalisation offerings such as Etsy (last year Etsy was one of the top 10 search queries in google search during the valentines period) whilst other retailers such as Messina are offering personalised Gelato for your loved one.
Technology is a driving force in Valentines day spending.
Whilst the in-store experience is important, technology continues to remain a significant driving factor. Over half of consumers plan to use their smartphones to assist with Valentine’s Day purchase decisions. 37% of consumers plan to use their smartphones to research products and compare prices, with a bulk of purchases traditionally done 2 days in the lead up.
Treat yo self!
But what about those poor lonely singles without a partner (more than half of consumers in Australia single)?
Those forgoing Valentine’s Day can’t escape some spending. We’re seeing the trend of consumers “treat” themselves. More than a quarter of consumers who aren’t planning a romantic evening have an alternative in mind, such as buying something for themselves or getting together with family and friends. The most popular gifts for single people to buy for themselves include massages, flowers and watches.
Spending on pets.
Single women aren’t the only ones to overindulge and overspend on their cats. The trend seems to be going mainstream, particularly around valentines day. On average people are spending $26 (USD) on their pets for valentines day. In-fact consumers were more likely to purchase a valentines gift for their pets than their coworkers.
*If anyone’s planning on getting me a last-minute gift expect to spend approximately $90.54 (or $123.10 if you’re male).
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