As the pandemic continues and Americans' pocketbooks take a shot to the heart, will people still follow Valentine's traditions? Will the 2021 holiday present its usual boost to the economy?
Valentine's Day 2021 will, like many altered traditions in 2020, surely be different, say experts at Niagara University. In addition to a retreat from romantic indoor restaurant dinners and quiet hotel getaways, it is expected that spending will also dip after years of acceleration. The fact that Valentine's Day falls on a Sunday is an additional bit of bad news since Sunday is not considered an opportune day for the floral delivery business.
In 2020, U.S. consumers spent approximately $27.4 billion on their Valentines, an increase of $6.7 billion from 2019. Previous years saw increases as well.
According to the National Retail Federation (NRF), fewer people celebrate Valentine's Day as the years march on, but among those who do, spending generally rises.
The NRF reports that the average Valentine customer spent almost $200 each in 2020, up from almost 21% the prior year.
Of those ages 18-24, most plan to spend an average of $109.31. But their older counterparts, those aged 25-34 who have higher incomes and children to buy for, expect to spend $307.51. This generation is topped out by the 35-44 age group who are the biggest spenders at $358.78. As in each year of the survey, men plan to spend more than women at $291.15 compared to $106.22. (Source: National Retail Federation 2020)
There are some who don't care for Valentine's Day. A 2017 NRF poll reported that many consider the holiday overly commercial; others are not in a relationship and still others simply aren't interested. The aging population is also a factor as the older people get, the less romantic they seem to be.
Dr. Youngsoo Choi, associate professor and interim dean at Niagara University's College of Hospitality & Tourism Management, says the top five 2020 Valentine's Day purchases ranged from candy to jewelry. According to the NRF survey, the most common expenditure is on sweets (given by 52% of the respondents), accounting for $1.8 billion, while $3.9 billion is spent on jewelry (18%). Falling below sweets, but above jewelry, was the now chancy evening out (restaurant or hotel) at 34%, accounting for $3.5 billion.
"That's where things will unfortunately be different this year," said Dr. Choi. "We don't expect people to dine out as much as they used to or go on Valentine's trips, especially out of state or abroad. While some will order out for romantic dinners at home, taking advantage of deals offered by local restaurants, February 14th will be yet another day during this pandemic when the hotel and restaurant industries try to weather the storm."
Niagara economics professor Tenpao Lee, Ph.D., said Valentine's spending usually provides a great boost for consumer confidence, an economic indicator measuring how consumers feel about the overall state of the economy and their personal financial situations.
"In addition, globalization and the internet have made Valentine's Day an international event. 2021 may not deliver the boost that it traditionally does, however given the savings rate for many Americans this past year, things do not look dire" said Dr. Lee.
"When consumer confidence is high, people feel comfortable parting with their hard-earned money to buy gifts," said Dr. Lee. "That's good for the economy. It fuels more spending and success for retailers and producers of goods and services." Dr. Lee notes Valentine's Day is second only to Black Friday as the biggest U.S. shopping day.
In addition to this he states, "During the 2020 pandemic, the stock market was doing shockingly well and Americans' saving rate increased from an average of 8% in 2019 to as high as 33.7% in April 2020; it declined to 13.6% in October 2020. Even so, the year 2020 had the highest average savings rate in 40 years. As a result, consumers who stayed home with limited activities probably may just consider Valentine's Day a good opportunity to spend much more than ever before."
No doubt, as with Christmas, more people will shop for their sweethearts online this year. E-commerce, in fact, has kept retail outlets afloat since the beginning of the pandemic and that will not change for Valentine's Day, especially since consumers are now more used to shopping online.
Mastercard research shows U.S. E-commerce sales were up 92.7% in May 2020, with more than $53 billion spent via E-commerce channels between April and May -- the height of the pandemic. That's more spent online than the last 12 Cyber Mondays combined (DigitalCommerce360).
Between July and August 2020, total retail sales in the U.S. increased by .6%. During this period, retail sales of clothing and accessories grew by 2.9%, rebounding from consistent and heavy declines in February, March, and April (Statista, September 2020).
Finally, people will continue to buy for all their loved ones, not just spouses and romantic partners. Included in Valentine's Day spending these days are children, parents, pets and many who treat themselves.
Niagara University
Founded by the Vincentian community in 1856, Niagara University is a comprehensive institution, blending the best of a liberal arts and professional education, grounded in our values-based Catholic tradition. Its colleges of Arts and Sciences, Business Administration, Education, and Hospitality and Tourism Management offer programs at the baccalaureate, master's and doctoral level.
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