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The Business of Valentine’s Day – Insight from a Consumer Gift Success Story
(Note: companies that
could be impacted by the content of this article are listed at the base of the
story [desktop version]. This article uses third-party references to provide a
bullish, bearish, and balanced point of view; sources are listed after the
Balanced section.)
While the gift-giving season may be in full bloom between Thanksgiving and Christmas, gifts of the blooming variety are most often given on Mother’s Day and Valentines’. In the category of flower purchases, historically, more orders are taken for Mother’s Day, but people spend more per order on Valentines.
According to information from 1 800-FLOWERS.com Inc., Valentine’s Day represents 10% of its revenue from consumer floral during the year. In total last year, they had annual flower sales of approximately $500 million, so roughly $50 million in floral transactions are expected to occur during each second week in February. This represents a third of revenue from their floral sales during the quarter. The majority of revenue for the quarter falls in the category of “everyday occasions.”
Using trends from prior years, the median gift-giver will be spending, on average, $196. This amount is for the full gamit of possible gifts. Greeting cards are staples for almost all consumers. Additionally, an evening out, candy, and jewelry are popular Valentine’s gifts and activities. It’s expected that 20% of celebrants will be giving jewelry to their Valentine on the 14th.
The gender make-up of customers ordering is 80% male and 20% female. This year, the romantic holiday falls on a Friday which boosts holiday sales — more people participate. However, there is then a higher percentage who opt to go to dinner or out on the town rather than give a physical gift. Restaurants do better on years where Valentine’s is part of a weekend.
This Valentine’s Day, 1-800-Flowers.com anticipates it will sell 18.5 million flowers, 11 million (60%) are expected to be roses. A little more than 65% of orders will be sent from mobile phones. The closer to V-day, the more likely the order will be made (last minute) through a handheld device. Although this mobile 65% is a majority of orders, it represents only about 45% of revenue. Both of these numbers have been on a positive trend over the years.
Recently there has been a change to where purchasers ask for flowers to be delivered. Flowers are now more often sent to the office where the recipient works. This is best when the holiday falls on a workday, it allows the gift to be appreciated by even more people.
What’s New?
Spending across the board for Valentine’s Day 2020 is expected to be $27 billion. This would be a 32% increase over 2019. The average order will be higher than in the past as people are more willing to spend in a booming economic environment.
1800-flowers.com would seem to be a confusing name for an online business. Or, a name where one would not think to buy food, stuffed animals, holiday decorations, or other gifts. The reason for this seeming disconnect is their evolution. Management has, since 1976, aggressively stayed ahead of trends and technology by implementing those that could help their business. One decade this may have meant embracing an “800-number” another may have meant embracing “dot-com” commerce. They made these transitions without letting go of the brand that had been built up to that point.
Product improvement and exclusivity is part of staying ahead. This can be seen today with their trademarked “Magnificent Roses.” These are preserved roses that arrive and are presented in one of many unique options. A long-lasting gift is a high-priced option that is relatively new. The preserved roses have been gaining in popularity, and despite the cost, are expected to be a top seller for the online retailer this year. They also take many orders for food baskets and other edibles. Orders for chocolate-covered strawberries are most brisk during both Valentine’s and Mother’s Day.
A strong economy always helps businesses where purchases are primarily discretionary. This year Jewelry stores, restaurants, perfume manufacturers, chocolatiers, and florists are expecting a lot of “love” from their customers.
1-800 Flowers.com Inc. Second Quarter Discover Report via
Channelchek
How
1-800-Flowers.com became one of the biggest, clunkiest names in Valentine’s Day
gifts
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