Will frugal lovers spoil Valentine’s Day for retailers?
Retail industry analysts keep waiting for that turning point; the one selling season when they can finally declare that the good old times are back again. Sales for the recent Christmas season were an improvement over previous years, but bargain hunters kept a lid on revenues and profits. Now the question becomes, will consumers stick to their budget-minded ways as Valentine’s Day draws near?
According to the National Retail Federation’s 2014 Valentine’s Day spending survey conducted by Prosper Insights and Analytics, the answer is, "Yes." Fifty-four percent of Americans plan to celebrate with loved ones this year, down from 60 percent in 2013. On the positive side, the average person celebrating the holiday will spend $133.91 on candy, cards, dinner and gifts, up from $130.97 last year.
Men will spend roughly twice as much on their Valentine’s as women this year (no surprise there). Just under 49 percent will buy candy, 37.3 percent will give flowers and 51.2 percent cards. Thirty-seven percent will celebrate the holiday with a night out while 19 percent will bring out the bling.
As in their daily shopper behavior, many consumers will go online to research or make purchases. According to the survey’s findings, 26.1 percent plan to shop online. Twenty-four percent will research products or compare prices on their smartphones, while 32.2 percent will do the same using tablet devices.
"Valentine’s Day will continue to be a popular gift-giving event, even when consumers are frugal with their budgets. This is the one day of the year when millions find a way to show their loved ones they care," said NRF President and CEO Matthew Shay. "Consumers can expect Cupid’s holiday to resemble the promotional holiday season we saw just a few months ago, as retailers recognize that their customers are still looking for the biggest bang for their buck."
Are frugal shoppers going to be a fact of life for retailers from this point forward, or is that turning point coming? How can retailers stay price competitive while meeting profitability goals under these conditions?