How Do I Love Thee? Let’s Me Count the Dollars!
Indeed, we’re all reciting love sonnets to the success of Valentine’s Week 2021, as 2020 has dulled so many financial arrows! In 2020, Valentine’s Day fell on a Friday, and in 2021, Valentine’s Day will move to the end of a weekend – SUNDAY! Yikes! In the retail floral business, this is equal to kissing a frog!
But Cupid’s not the only one with arrows in his quiver! How do we hit our financial bull’s eye and convert the pigeons of discontent into the bluebirds of happiness? With the Valentine’s holiday holding court as the first- or second-largest sales week of the year, and generating 30 percent to 40 percent of the year’s total holiday dollars, it’s safe to say that a successful Valentine’s Day in 2021 will be a crucial component of organic growth across the entire industry.
So how do we “count the ways” toward a successful Valentine’s Week in 2021? Here are FIVE important strategies for your consideration:
1. Plan the Work, and Work the Plan
A simple SWAG (scientific wild-a** guess) method of selecting a rote sales increase based on an annual figure doesn’t work. Budgets for a holiday — especially one of this magnitude — must be calculated with acute detail, factoring in the following components:
- What were your base Valentine’s Day sales in 2020? Let’s start there.
- Were there any weather or product shortage anomalies in 2020 that likely will not recur in 2021? If the weather and/or supply is more stable in 2021, there may be some upside as a result.
- What is your target sales increase? Can you exceed it while simultaneously maintaining strong profitability?
- Dig out your sales records from 2016, which was the last time that Valentine’s Day fell on a Sunday. What sales increase percentage was achieved versus the previous year and what was the unit increase percentage from year to year based on this similar calendar? This information will be a big clue for 2021’s Valentine Sunday!
- Are there any factors that may cause a non-organic sales increase in 2021 such as a remodeled store, new product categories, less competition, or increased customer traffic? Factor in those changes for a potential upside!
- Are there any factors that may cause a non-organic sales decrease in 2021 such as reduced retails, less labor, fewer product categories, new competition, or less customer traffic? Factor in those changes for a potential downside.
- Sales dollars alone don’t tell the full story. Be sure to calculate and budget anticipated customer count, retail sales per customer, and total units by category. Start the budget-building process by individual SKU, then roll them up into category sales and then into total store budget. This will create the most accurate forecast and provide a better foundation for financial tracking as Valentine’s week progresses.
2. Understand Target Spending Thresholds
According to the National Retail Federation (NRF), an average Valentine customer in 2020 spent almost $200 each – which was up almost 21% versus the prior year. Valentine week is NOT a time to take up valuable display space with cheap, low-cost gifts. The difference between displaying more $200 gifts versus taking up prime space with $100 gifts can make or break the bank in 2021. Because Valentine Sunday is not the best day for Valentine to fall on, this strategy will be even more important in 2021.
Fun Fact: Ages from 18-24 plan to spend an average of $109.31. But ages from 25-34 – old enough to have higher incomes and children to buy for – expect to spend $307.51 and are topped out by the age group from 35-44 as the biggest spenders at $358.78. As in each year of the survey, men plan to spend more than women at $291.15 compared to $106.22. (Source: National Retail Federation 2020)
3. Understand Your Customer Mix
Did you know that Valentine customers purchasing romantic gifts for their “significant other” has been on the decrease in the past few years? But don’t panic! These dollars have been replaced with customers purchasing extra Valentine gifts for co-workers, children, teachers, friends, and even pets! In fact, 50% of all Valentine sales are purchased for recipients other than a romantic partner! Creating and displaying gifts for each of these segments will entice your customers to one-stop-shop at your store instead of other gift stores.
Fun Fact: 27% of all Valentine customers will purchase a Valentine gift for their pet!
4. Expand Your Product Categories
Total Valentine’s spending in 2021 is expected to exceed $25 billion in retail revenue. In the same way, you’ll expand into non-romantic gifts, you’ll also benefit from expanding your gift categories in total. Of course, flowers and plants take center stage; but did you know that flowers and plants consist of only 40% of all Valentine gifts purchased and only service 17% of the total Valentine customer count each year? How can your product offerings be expanded to create a one-stop-shopping experience for your Valentine customers?
Fun Fact: Shoppers plan to spend $5.8 billion on jewelry (given by 21 percent), $4.3 billion on an evening out (34 percent), $2.9 billion on clothing (20 percent), $2.4 billion on candy (52 percent), $2 billion on gift cards (19 percent) and $1.3 billion on greeting cards (43 percent). Gifts of experience such as tickets to an event or a trip to a spa are wanted by 41 percent and planned by 28 percent. (Source: National Retail Federation 2020)
5. Enhance and Advertise Contactless Shopping
It’s quite certain that COVID will continue to be on your customers’ minds in 2021. Even if business is relatively back to normal, you’ll still benefit by offering safe and contactless shopping options for those who still want to remain distanced. This is the time to advertise delivery service, enhanced online shopping, and curbside order pickup.
Fun Fact: Create a curbside selling event that’s a fun and memorable experience for your customers! Create a “menu” like a fast-food drive-up….. serve a treat or beverage while the customer shops in their car….. keep your “curbside store” stocked to the max… and sell, sell, sell! Call your curbside pickup a “Valentine Drive-Buy” and advertise it in every media outlet available!
As entrepreneur Richard Branson said, “Customers shouldn’t think of your business as a place to buy a product or use a service. It should be a fun place to be!”
Valentine’s Week 2021 is a time to go all out with in-store excitement and engaging associates. Plan some fun employee contests or coordinate customer prizes. Aside from all the budgeting, marketing, and planning, the best way to a customer’s wallet is to focus on the feeling they get when they’re face-to-face with your helpful employees and heart-full products!
By Cindy Hanauer Trustee Emeritus; American Floral Endowment