Love is in the air and retailers across the globe sense an opportunity to make a mark. Historically, Valentines Day, has turned out to be quite productive for retailers. This year too they will be hoping for something alike. Let's have a look at what's in store for them in 2017.
Trend Analysis and the importance of Shopper Engagement
The UK retailers will have to take a leaf from what happened last year, as not much is scheduled to change in 2017. According to a survey conducted last year, 78% people believed that valentines day has become too commercialized. However, this does not mean that customers are not spending. The UK's Valentine's Day is estimated to be 1.6 billion pounds (Retail Week). According to Criteo Data, the mobile medium scored the maximum conversions in 2016, and the same trend will continue. The trend of cross item purchase will be adhered to by the UK customers, so retailers need to get their targeting strategy right. Retailers will need to deliver enhanced levels of both online and in-store personalization, along with highly contextualized and personalized offers targeted on mobile phones in order to increase the shopper engagement. This will give them the best chance of scoring more conversions.
According to data from (NRF-National Retail Federation), valentines day in the US is estimated to contribute US $18.2 billion in 2017, which is lesser than the last two years. The drop in expenditure levels can be accounted to the rise of the number of older people in the population. The good thing is that the drop isn't all that alarming. The best news for US offline retailers is that 34.7% and 31.5% of customers are planning to make their valentine's day purchase from depatment stores and discount stores respectively, which is more than 27.2% (Online). The following illustration reflects just that.
(image source: NRF)
Customers in the US will show tendencies of 'gifting an experience' to their better half, for instance a trip to the concert, etc. So retailers must look to accommodate 'gifts of experience' offers in their deals to further enhance the overall shopper engagement. According to data from NRF, 40% of customers would want an experience gift and 24% will plan to gift items. Out of the 24%, half of them would spend on candys, 46.9% on greeting cards and 36.6% and 34.7% on 'an evening out' and flowers respectively.
Retailers always want more and absolutely love it when customers go on to make that extra or additional purchase. A lot of it depends on the overall shopping experience that the customers have in-store. The higher the levels of shopper engagement, more the chances of customers making that added purchase. The following illustration depicts the reasons that customers would spend an extra 10 dollars this Valentine's day.
(image source: NRF)
The above data clearly shows that the top reason why customers will spend the extra $10 is if there is a good sale or promotion. An appealing promotion immediately engages the shopper. Retailers will have to ensure that their in-store marketing is done in the most effective of ways with the help of dynamic pricing and promotional strategies. Personalized offers and recommendations should be provided to customers in order to entice them to make that additional purchase.
Indian Retailers all set to have a good time too
The valentine's fever is quite a considerable one in India too. Retailers have always looked to maximize profit on this day over the years, and this year will be no different. The latest figures available of India's Valentine's Day market is a 2014 estimation by the Associated Chambers of Commerce & Industry of India (Assocham). According to Assocham, the market was worth 22,000 crore rupees in 2014, and experts believe that it has only grown ever since.
Retailers will be glad to know that their customers don't mind buying expensive items like watches, jewellery, etc on Valentine's Day. According to experts, both youngsters and middle aged people will show the tendency of lavish spending on this Day. Florists too experience a tremendous surge in the overall demand for flowers. Flowers are the primary demand for customers, irrespective of the massive hike in the price of roses. The florists also experience a high demand as roses are exported in huge volumes to South-East Asia on Valentine's Day, as per information from the Agri-Horticultural Society of India.
Understanding where the demand lies is important for the retailer so that the shopper can be successfully engaged and lured with pertinent recommendations and offers.Overall, retailers across India expect a few days of glory as the valentine's week sets in, especially after the recent debacle in business that they had encountered due to the announcement of demonetization.
Mobile: The Perfect Medium for Shopper Engagement
According to (Criteo) data, 57% of Valentine's Sales were made on mobile devices in 2016. This year, the same is expected. The data also claimed that mobile showed a better conversion rate in comparison to other forms of browsing in e-commerce. The Brick-and-Mortar retailers should incorporate a similar mobile-centric strategy to reap the best rewards. Everybody knows that mobile is the most powerful medium for shoppers today. So, the best way to connect to them would be via mobile. Besides, it is the most convenient way to engage shoppers in real time by sending contextualized offers and customized deals.
It's valentines day and the customers' imagination is bound to flow in every direction as he attempts to make the most unique purchase. Retailers should be ready for this challenge and look to cash in on this oppportunity to make it a Valentine's Day to remember.