Love is in the air today as the world celebrates St. Valentine’s Day.
The annual celebration encourages the giving and receiving of gifts as a sign of one's love, making it a big day for couples, friends and of course retailers.
“Valentine’s Day is a chance to share a special moment with a nearest and dearest, by buying gifts and enjoying some time together over a dinner or during a trip away,” said Fleur Brown, Chief Industry Affairs Officer for the Australian Retailers Association (ARA).
ARA is Australia’s peak retail body, representing more than 120,000 retail shop fronts and online stores that employ over 1.3 million Australians.
Australia's retail sector is valued at $430 billion.
Brown said retailers can expect a $535 million shopping boost this season which comes as a small, sweet spot in what promises to be another difficult year for the sector battling the cost of living crisis.
Recent data from Roy Morgan found that 3.8 million Australians plan to buy gifts for a special someone this 14 February.
The most popular gifts for the occasion this year are flowers, food, chocolate, alcohol, cards and experiences like dining out or trips away.
“There is perhaps no single bigger day on the Australian hospitality calendar than Valentine’s Day. From fine dining to the humble pub, it’s a hugely important day for operators to drive revenue and relationships, during the typical lull after the summer holiday peak season," said SevenRooms’ Managing Director of APAC Paul Hadida in 2024.
Young Australians aged 18-34 will make up the majority of loved-up shoppers and spenders this year at 27%.
New South Welshmen are also expected to spend the most across the country with an average spend of $171 per person.
In total, Aussie lovebirds are set to spend more than A$70 million on gifts this year, up 15% from 2024.
This year will also mark the first time spending on Valentine’s Day will surpass A$500 million.
Over in America spending is set to reach US$27.5 billion on Valentine’s Day in 2025 according to the annual survey released by the National Retail Federation and Prosper Insights & Analytics.
Regardless of tough trading conditions, subdued spending and high overheads, Brown says, “Australians consistently look for opportunities to spoil their loved ones. We also know population growth plays a role in the growing spend.”
For businesses, incorporating products sold for special occasions or specific seasons can generate a peak or noticeable increase in revenue.
Jordana Thirlwall, Co-Founder of Super Easy Storage told Azzet that products used to celebrate special occasions such as Valentine’s Day are great for businesses because they have increased customer demand due to their limited availability.
However, Thirlwall says one aspect that businesses often overlook when stocking products is inventory management, which includes maintaining a surplus that takes up valuable storage space in off-seasons.
“Overstocking can definitely become an issue, leading to wastage and additional stocking costs. On the other hand, understocking also poses consequences, risking an opportunity loss if demand spikes,” said Thirlwall.
The logistics of products with short life spans like flowers and chocolates are challenging for businesses and often become an operation loss or waste, while non-perishable merchandise can more easily be included in promos or stored for the next season.
To help businesses reduce waste Thirlwall said, “Customers can make an effort to choose sustainable products - a bit more costly but helps businesses and the environment in the long term.”
She added that there is no perfect way to accurately predict the economics of a seasonal product. However, it is all about trying to be as precise as possible.
Some strategies she suggests are reviewing sales trends from previous seasons and considering growth projections, along with allowing customers to preorder for more exact stock counts.
Another solution could be for businesses to utilise smart storage solutions for excess stock at times when it becomes non-sale generating, but is usable for sale next season.
