Valentine’s Day celebrations began innocently enough. In the mid-1800s, to mark the occasion and reaffirm their love for one another, trendy couples exchanged inexpensive greeting cards. The practice grew in popularity over the ensuing decades, and by the 1920s, manufacturers saw sales of V-Day cards explode to $60 million, or about $766 million today.
It didn’t go unnoticed.
Florists and chocolatiers and jewelers and restaurateurs and every other industry head whose product could be tangentially marketed as a hallmark of love jumped at the opportunity to make a quick buck. By the time the mid-20th century arrived, Valentine’s Day had evolved from a minor holiday shared between couples to one that “celebrates” love ins all forms—parents and children, grandparents, aunts and uncles. The book Family Life in the 20th Century, refers to it simply as “an example of how consumer culture and commercial enterprises have shaped national family holidays in the United States.”
Of course, this is no secret. And the putdown of Valentine’s Day as a marketing gimmick designed to boost sales in a would-be dull post-Christmas shopping season is nothing new. Comedians have rallied against it. Petitions crop up annually. Counter holidays are celebrated. But for the longest time, it didn’t matter. Valentine’s Day shopping conquered all.
But that may be changing.
According to the National Retail Federation, “U.S. consumers are expected to spend an average $136.57, down from last year’s record-high $146.84. Total spending is expected to reach $18.2 billion, down from $19.7 billion last year.”
The question is why?
1. Delayed Tax Returns
Starting this year, the IRS is placing extra scrutiny on taxpayers who claim the Earned Income Tax Credit or the Additional Child Tax Credit, ostensibly to combat fraud. Those who claim the credits—. virtually every parent in America—will receive a delayed tax refund. According to Fortune, refunds won’t be dispersed until February 22 at the earliest, which stands to put a serious dent in a lot of Valentine’s Day shopping plans.
And it’s not as though this is a onetime thing for the 2017 tax season. A new law is on the books, and so, we can only assume that delayed processing times for tax-credit-seeking parents is the new reality.
2. Those Pesky Millennials
There has been plenty written about Millennials bucking long-held traditions and the frustration it has caused retailers. And so far, the same holds true for Valentine’s Day.
According to Money, “Ownership is simply not as central to the Millennial mindset as it was to other generations. The long-term commitment that’s by nature a part of most big-ticket purchases such as cars, homes or even luxury handbags is less appealing to a generation that gets bored more easily and values immediacy. An adventure, a festival or a Super Bow party (yes, Millennials spent the most on that event too) has immediate and emotional impact. And aside from the obvious - that it’s simply fun to be with the one you love and experiences are memorable markers of affection - experiential gifts have a leg up with Millennials because social media chronicling lends permanence to less tangible purchases like dinner and festivals.”
It’s not as though Millennials are dismissing Valentine’s Day as an archaic holiday from a by-gone era, but they don’t subscribe to the idea of giving clichéd gifts—wine, roses, chocolate, and jewelry—either.
3. Experience-driven Valentines
The Money article alluded to the preference of spending on Valentine’s experiences, but it’s not a trend exclusive to Millennials. Almost every demographic is opting out of material gift giving.
According to a Forbes report about Valentine spending in 2016, experiences are the new holiday go-to. They write, “Be it a romantic night at the movies or tandem bungee jumping, couples are sinking a net average of $4.5 billion into an experience, more than any tangible display of affection . This will top all previous survey "evening out" net averages since 2010.”
The future of Valentine’s Day
Valentine’s Day may not be dead, but old consumer purchasing habits are. To capitalize, retailers would be wise to provide more experience-driven events around the holiday.