Shoppers are cutting back on spending this Valentine’s Day, research suggests – and they are opting for alternatives such as ‘no-present’ pacts or cutting costs by heading to deal websites or using ‘buy now pay later’ payments.
Changing spending patterns
One study from Barclays questions more than 2,000 UK adults and finds that 23% of those that plan to celebrate Valentine’s Day say they’ll spend less this year than last as the cost of living rises – by an average of £51. They’ll do that through tactics ranging from ‘no present pacts’ (15%) or agreeing a spending limit in advance (16%), while 47% will mark the occasion with a night in – with 26% citing rising costs as their reason to stay in. When it comes to buying a gift, 10% will be using voucher or deal websites and 10% will buy flowers from the supermarket rather than from a florist. Florists can still expect to benefit, says Barclays, however, since spending with them was 481% higher on Valentine’s Day 2022 than the daily average over the full year.
Adam Lishman, head of consumer products at Barclays, says: “Valentine’s Day is often a time when Brits lavish their loved ones with gifts or treat them to a romantic date night, but with inflation and energy bills continuing to climb, celebrations are likely to be a little different this year.
“Many couples are swapping nights out for home-cooked meals in front of the TV, agreeing ‘no present pacts’ with their partner, or buying flowers from the supermarket instead of a florist – allowing them to keep things feeling special without breaking the bank.”
Jacqui Owens, head of lifestyle retail at Google, says: “Marketing professionals rightly have a close eye on shifting consumer behaviours this year. Economic uncertainty is biting and spending patterns are being disrupted as a result – with 62% of UK shoppers using Google’s shopping tabs to compare products before making a purchase in the run up to the last holiday season as opposed to sticking with their usual brands of choice.
“This Valentine’s Day, however, Google’s Search trends data shows a mixed picture. Unsurprisingly, we’ve seen an uptick in searches for ‘gift ideas’ and given the current economic uncertainty, ‘cheap gifts’, for those seeking inspiration. But on the other hand, activity in the luxury retail market is resilient, especially when it comes to experience-based gifts. Trending searches for restaurant and hotel bookings, nail salon appointments and spa days speak to an increase in searches tied to romantic gifts and trips away more broadly.
“For success on Valentine’s Day, marketers need to meet consumers where they are. It’s clear that while shoppers aren’t totally reining in spending, they’re increasingly seeking out inspiration before making a purchase to make sure that investment is worth the spend.”
Owens adds: “Marketers are understandably re-evaluating their strategies to reach consumers in 2023 – but calendar days like Valentine’s Day should always have a place in planning advertising campaigns that are both helpful, relevant and have the power to engage and convert interest from online browsing to spending.”
Projections from digital commerce protection provider Signifyd suggests that the use of buy-now-pay-later (BNPL) payment methods has risen by 42% since last year, particularly when shoppers buy clothing and jewellery. It cites findings from the National Institute for Economic and Social Research that suggests UK households will be £4,000 worse off this year – but still predicts that gifting sales will rise by 6% on last year. Already, says Signifyd, its data shows order numbers and product sales are both up on last year, suggesting that shoppers are buying more often (+13%) but spending less (-15%) when they do so.
Jewellery and watches were a key Valentine’s purchase last year, notes Global-e in its analysis of 2022 cross-border sales data. Same store cross-border sales from the categories were 48% higher in the first two weeks of February 2022, to February 14, than in the final two weeks of the month – peaking on February 10. The company says this year shoppers may be more likely to buy across borders. Global-e’s 2022 Consumer Survey, carried out via Cenuswide, found that jewellery and watches are the third largest category for cross-border purchases from the UK, with 23% of UK respondents saying they would buy these products from outside their home market. It’s also the fourth largest cross-border category around the world (26%).
Ran Fridman, CRO at Global-e, says: “Valentine’s Day has become a key shopping event in many regions around the world, where people will buy gifts for loved ones. Our Global-e data shows that it is also a popular time for purchasing jewellery and watches cross-border.” While it is a well-established shopping event in Western markets, Fridman says that Global-e data indicates cross border purchases in the lead up to Valentines are also increasingly popular in the APAC regions, with significant uplift in sales in Hong Kong (101%), Japan (78%) and Singapore (70%).
“Whether you’re a British retailer looking to target shoppers worldwide or an international brand looking to reach UK consumers, it’s important to ensure that the shopping experience is seamless year round by localising the online experience,” says Fridman.