Celebrating on lovers’ lane will get more expensive for the average American this Valentine’s Day, according to two new reports.
The National Retail Federation forecasts that love-struck consumers will spend 8.5 percent more on Valentine’s Day this year bringing the average spending to $126.03 per person, or a total of $17.6 billion.
The NRF said Valentine’s Day spending is projected to hit its highest level in the survey’s 10-year history — an encouraging sign for the economic recovery.
To lure consumers, who are more willing to spend this year but are still seeking the most value for their dollar, daily-deal sites are one retail sector that will be offering a range of deals and promotions leading up to the holiday, hoping to remind consumers that while you might not use a Groupon offer on a date to a restaurant, the sites still have Valentine-ready offers.
“For us, it’s really about value,” said Maire Griffin,LivingSocial’sDirector of Communications. “Everyone knows these days — it’s really about making your dollar work for you.”
She said LivingSocial will be placing extra emphasis on offering “giftable” items. For a $2.99 fee, the company will print a deal voucher out on paper, wrap it and mail it to a buyer’s Valentine.
Daily deals sites hope to capitalize on the consumer’s hunt for value. But although many merchants are enthusiastic about offering Valentine’s Day-centric deals, trying to use a voucher for dining out can present problems, said Steve Schaffer, CEO of DailyDeals.com.
“If you’re buying a deal to use on Valentine’s Day, it’s going to be very difficult for you to do that on Valentine’s Day because a lot of restaurants have exclusions,” Schaffer said. He expects the daily deals that will be used for Valentine's Day will be more likely to be used for online shopping rather than for restaurants or dining.
He added that daily deals are a good way for companies selling items that may not be at the top of consumers’ shopping lists to get exposure.
“You’re not going to necessarily think about, ‘Gosh, I should get my wife a canvas photobook of our wedding — or my husband for that matter,’” he said. “But when you get a deal like that, it will spur the impulse.”
And that might be just as well for shoppers, looking to splurge on their sweetheart. Consumers are expected to shell out an estimated $4.1 billion on jewelry, up from $3.5 billion, the NRF said. The next highest category, spending on a special night out, will attract roughly $3.5 billion in sales.
“As one of the biggest gift-giving holidays of the year, it’s encouraging that consumers are still exhibiting the desire to spend on discretionary gift items, a strong indication our economy continues to move in the right direction,” said NRF President and CEO Matthew Shay.
Kathy Grannis, the director of Media Relations at NRF, added consumers are moving away from more practical homemade gifts to more typical discretionary gifts, such as jewelry. Previously, they had shied away from splurging on such items.
“If people were buying those items, they were trading down — silver instead of gold, daises instead of roses,” Grannis said.
The research firm IBISWorld is projecting even higher spending this year than the NRF. It expects consumers will spend $19.8 billion, a 5.0-percent increase, bringing the average to $131.75 per person.
Although holiday spending is recovering more quickly than everyday spending, consumers are still behaving more frugally than they did pre-recession , said Nikoleta Panteva, a retail analyst at IBISWorld. They are more likely to venture into dollar stores or mass merchandisers like Wal-Mart where they can choose from a variety of products to get the most value for their dollar, she said.
In addition to a surge in dining, IBISWorld estimates that spending on romantic getaways will increase 5.4 percent to $2.3 billion.
Since the holiday falls during the workweek this year, hotel rates are going to be lower during the weekend before and on Valentine’s Day so more people will opt to celebrate by traveling, Panteva said.
The holiday’s timing will also impact lingerie and clothing sales, which are expected to underperform the pace of growth in total sales and rise 2.8 percent to $1.2 billion.
“People — instead of spending a night in, they’re more likely to spend a night out,” she said. “It discourages people from splurging on lingerie or a new outfit to go out. You’re more likely to just go in what you were wearing that day.”