A new report reveals Australians will spend an average of $38.60 on their partners this Valentine’s Day, down 3.2% from last year, with a return to cheaper gift items rather than expensive meals out.
According to the IBISWorld report, Australians will spend $50 million on flowers this year, up 9.6%, while chocolates and confectionary purchases will grow by 2.2% to $285.3 million.
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Other popular gift options include eating out and jewellery, which will grow by 3% and 1% respectively.
Meanwhile, romantic getaways will fall by 2%, with consumers deterred by the recent bout of devastating weather.
Meanwhile, greeting card purchases will fall by 1.5%, and clothing and intimate apparel by 1.1%, in a further bid by consumers to cut costs.
IBISWorld managing director Robert Bryant says while florists will rejoice over the surge in sales, the figures overall are “less than positive” for the hospitality industry due to the fact that Valentine’s Day falls on a Monday this year.
Of those who do chose to venture out, IBISWorld says they won’t venture far, with local eateries proving more popular than expensive restaurants with waterfront views. Many dinner dates will also take place on the weekend rather than the Monday.
According to IBISWorld senior analyst Nick Sallmann, traditional retailers shouldn’t dwell too much on the figures as many consumers – especially men – will make last-minute purchases on their way home from work on Monday, particularly flowers.
Sallmann says given the personal nature of Valentine’s Day gifts, most consumers still prefer to visit bricks-and-mortar stores.
However, he says male consumers are less inclined to purchase more intimate items, such as apparel, from traditional retailers when they have the option of purchasing items online, which offers much more privacy.
Sallmann says retailers looking to spark last-minute sales before Valentine’s Day need to be price sensitive and offer their customers a personalised service.
He says this year will also see growth in the personal services sector, with gifts such as massages and beauty treatments, as these options are still considered mid to low value purchases and are non-specific, which means it is harder to “get it wrong”.
Overall, he says this year’s Valentine’s Day spending is pretty significant as far as one-day holidays go, and retailers should be looking to build on that, particularly in light of Australia’s ageing population.
“As more baby boomers start to move into retirement, they have more time and often more money, which means more discretionary spending,” he says.
“As much as chocolates and flowers are going to get a boost in sales this year, over the next couple of years there will be a shift towards higher value items such as jewellery and getaways.”
Sallmann says wherever possible, retailers should be expanding their marketing on an international level as Australia continues to experience a surge in international visitors, most notably from Asia.
“Local holiday agents in Australia are increasingly focusing their marketing efforts on capturing international markets, and cheap airlines are a massive part of that,” he says.
“The key is affiliation as it lends itself to economies of scale. The more you can band together, the easier it is [to spark sales].”