Valentine’s Day spending is tipped to increase by almost 5% this year, according to IBISWorld, with loved-up couples expected to spend almost $1 billion in the lead-up to February 14.
IBISWorld expects Australian consumers will spend $908.7 million this Valentine’s Day, up 4.8% on 2011, with domestic tourism operators tipped to be the biggest winners.
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This is in stark contrast to last year’s conservative effort, which saw the florist industry emerge as the winning sector with regard to Valentine’s Day spending.
According to IBISWorld general manager Karen Dobie, couples will fork out $422.2 million on romantic mini breaks this year. Jewelers and hospitality businesses will also do well.
“This year, we are expecting a more lavish display of affection through a splurge on something sparkly, a romantic meal out or the sharing of a boutique box of chocolates,” Dobie says.
Dining out and weekend breaks will increase by almost 6% on 2011, while jewellery sales are set to soar 9%, IBISWorld said.
Dobie says the popularity of cooking shows is raising the awareness of fine dining, and driving demand for high-class restaurant bookings.
“This is especially true on special occasions such as Valentine’s Day,” she says.
Brian Walker, managing director of The Retail Doctor Group, says businesses need to focus on the experience they offer, rather than just the product.
“I think some categories and some brands have a natural invitation to cross-promote. I think there’s a real lack of cross-promotion for this event,” he says.
“You don’t see a lot of retailers talking about the experience around it. They talk more around the product.”
“That’s what we’d encourage retailers to do – cross-promote with other categories and build on the experience.”
Jo Macdermott, founder and director of Next Marketing, says the key to Valentine’s Day marketing is subtlety, urging businesses to refrain from going overboard.
“I’ve got a client in a hospitality business and they’re running a Valentine’s Day promotion,” Macdermott says.
“They wanted to do something a bit ‘fluffy’ so what we’ve done is partnered with a wine revolution called Rosé Revolution.”
“It’s got a lot of pink imagery because the wine is pink… So we’ve been able to add some colour which traditionally wouldn’t appeal to males.”
“We felt it had some Valentine’s Day connotations, being pink, so you can get some of that soft imagery without being less appealing to male clients.”
“It’s about using something existing and tapping into it for your own advantage.”
While classic gifts like chocolates and flowers are expect to remain popular this year, the appeal of lingerie is beginning to wane, according to IBISWorld.
Spending on intimate apparel is tipped to fall 0.6%, while chocolate sales will rise almost 5%.
IBISWorld analyst Paul McMillan says the average Australian will spend $40 this Valentine’s Day, up from $38 a year ago, as people begin to feel confident to dip into their savings.
“People are still quite willing to splash out on special things occasionally, and I think Valentine’s Day is a big part of that,” McMillan says.