Retail’s (Second) Favorite Holiday

Think fast — what’s the second biggest retail holiday of the year?

If you didn’t guess Valentine’s Day, you might have a couple of problems. As an individual consumer, that would indicate that you haven’t bought anything for your sweetheart yet. There’s still a little time to fix that.

A more serious issue, if you’re in retail, is that your business might not be ready to take advantage of the ever-growing sales opportunity that is the annual celebration of love. And that is potentially not as easy of a problem to solve, as plenty of other merchants are already well along in their efforts to kickstart their revenue with the first major consumer holiday of 2016.

According to the National Retail Federation’s (NRF) Valentine’s Day Consumer Spending Survey (conducted by Prosper Insight and Analytics), sales surrounding the holiday will reach a record $19.7 billion this year. With 54.8 percent of consumers intending to partake, the average spend, predicts the NRF, will jump from $142.31 in 2015 to $146.84.

“As the first major consumer holiday of 2016, Valentine’s Day could provide a positive boost in spending our economy needs,” commented NRF President and CEO Matthew Shay. “Low gas prices and guaranteed promotions from retailers large and small should help consumers as they look for the perfect gift for their friends and family. Looking ahead, we’re optimistic consumers are in a good place when it comes to spending on discretionary items like gifts.”

What areas of retail are in the best position to get a piece of that action?

First and foremost — candy, obvs.

The sweets industry is poised to bring in $1.7 billion this Valentine’s Day (there might be potential there for the dental industry to benefit as well — although the 50 percent of consumers who told the NRF that they plan to buy candy for the holiday did not mention how rigorous or not are the intended recipients’ oral hygiene regimens).

The second most popular Valentine’s-related spend this year is set to be in the area of experience, with 38.3 percent of consumers planning to take a date to dinner and/or a show (or a similar activity). The resultant forecast total in that space — $4.5 billion — is the highest since the NRF began tracking gift spend six years ago.

There’s a second reason why any merchant that deals in experiences will want to take note of that potential. As Forbes hit upon in its analysis of Valentine’s Day spending last year, you know who likes experiences more than products? Millennials, of course.

The fact that 25- to 34-year-olds were predicted to outspend their older counterparts last Valentine’s Day was noted by the outlet to be something of a surprise at the time, given that millennials had “yet to come into their most fertile years of earning power.”

That eager-to-spend consumer group has only grown stronger in its buying power over the past year, which ought to motivate retailers in the “experience” space to tailor their theater, or spa, or art lesson, or hang-gliding — heck, whatever they’ve got — offering to young adults looking to impress their Valentine’s dates.

There’s plenty of room, of course, for product-centric retailers to fill their own respective Cupid’s quivers, as it were, by selling tried-and-true Valentine’s Day gifts, such as jewelry (which the NRF forecasts will account for $4.4 billion in sales this year), flowers ($1.9 billion) and good, old-fashioned greeting cards — an industry that is on track, according to the survey, to earn $1.1 billion (that’s a lot of paper, both figuratively and literally).

While many of those gifts will be purchased in physical retail stores, there’s plenty of love to go around for merchants in the eCommerce space. To help out those sellers, Marketing Tech Blog shares an infographic from Ve Interactive that highlights, among other key statistics, the peak online selling days for Valentine’s Day (one — Feb. 7 — has already passed, but Feb. 11 is still on the horizon).

One final indicator that Valentine’s Day is on the rise in a big way as a major consumer holiday in the U.S.? Shoppers aren’t only intending, through retail purchases, to attest their love, affection and/or friendship with fellow humans: According to the NRF survey, people are going to spend a total of $681 million on gifts for their pets this year.

While some might find that statistic odd, if not outright depressing, we’re not here to judge. After all, it’s the season of love … and, if retailers play their cards right, money.