EXECUTIVE SUMMARY

Valentine’s Day is an important "floral holiday" for the floral industry, with an estimated $2.9 billion dollar market value (retail value) in the U.S.   Prince & Prince (P&P) has been tracking U.S. consumer floral purchasing behavior for Valentine’s Day (and 20+ other holidays and occasions) periodically over the past two decades with their national consumer floral purchasing surveys, and are able to identify salient purchasing trends for the industry.   For the most recent P&P survey in 2013, the percentage of U.S. floral-buying households making a floral purchase for Valentine’s Day was 49%, down three percentage points since P&P’s prior survey in 2010, and the lowest purchasing incidence since P&P’s initial consumer survey in 1996 (53%).   Statistical trend analysis of the historical consumer purchasing data reveals a slight downward linear trend in household floral purchasing for Valentines Day since 1996.

P&P suggest that the floral industry is largely unaware of this loss in market penetration for Valentine’s Day due to three factors: 1) the considerable size of the Valentine’s Day market, 2) the number of households in the U.S. continues to expand, thus bolstering the size of the overall market over time, and 3) shifts in the number of households that participate in the floral market over time.   All of these factors mask the decline in household floral purchasing for Valentines Day, but the slow decline in market penetration for this holiday is real, and according to P&P, troublesome.   P&P forward reasons for the decline, and proclaim that the long-term consumer trends represent a "wake-up" call for the industry.   In addition, P&P reveal key consumer segments that are "bucking" the long-term decline, and expanding their floral purchasing for Valentine’s Day.   P&P also suggest marketing strategies to garner these specific consumer segments.

In this exclusive reporting, Prince & Prince (P&P) show recent and historical trends in consumer household floral purchasing for Valentine’s Day, dating back to 1996, and up to 2013.   Valentine’s Day, a $2.9 billion dollar "floral holiday" at retail in the U.S., is one of over 20 holidays, occasions, and events of floral purchasing tracked by P&P with their periodic surveys of the U.S. floral-buying consumer market (Prince & Prince, 2012a, 2012b. 2013, 2014b, 2014c).   The purchasing data, prior to and after the 2008 U.S. recession, not only reveals how the recession has impacted consumer floral purchasing for Valentine’s Day, but the historical data also reveals long-term trends in consumer purchasing behavior for this holiday.   Additionally, P&P’s segmentation of each study’s overall survey findings by consumer demographics reveals key consumer groups that drive floral purchasing for Valentine’s Day.   A fuller understanding of these historical consumer-purchasing trends for Valentine’s Day will likely assist the floral industry in fully exploiting all the market potential that this holiday has to offer.

Figure 1 shows the incidence of household floral purchasing for Valentine’s Day across the past five P&P survey periods: 1996, 2000, 2007, 2010, and 2013.   By household purchasing incidence, P&P means the purchase of one or more floral products (fresh cut flowers and/ or indoor potted plants) by the household for Valentine Day during the specific study year.   P&P shows the purchasing incidence as the percentage of floral-buying households that made a floral purchase for Valentine’s Day for each survey period.   For 2013, 49 percent of floral-buying households in the U.S. purchased floral for Valentine’s Day (Thursday of the week), down three percentage points since Valentine’s Day of 2010 (Sunday of the week), and the lowest purchasing incidence since P&P’s initial consumer floral survey in 1996 (53%; Wed. of the week).

The impact of the 2008 U.S. recession on household Valentine’s Day floral purchasing shows generally downward trends.    Although P&P did not conduct nationwide consumer floral surveys during the depth of the recession in 2008 and 2009, the total number of U.S. floral-buying households was still down about 10% in 2010, compared to before the recession (2007).   However, the percentage of those floral-buying households purchasing specifically for Valentine’s Day in 2010 was relatively strong, 52% (Prince & Prince, 2012a).   P&P’s analysis of households’ floral spending metrics suggested that average floral dollar spending by households for Valentine’s Day in 2010 was about 20% lower than the spending level prior to the recession (2007).

For the "recovery period" of 2013, the P&P estimate of average household floral spending "attributable to Valentine’s Day" was $74, including all household members making a floral purchase, and with associated delivery/ service fees included.   This household floral spending level was $7 higher than the average in 2010 ($67), yet still $10 lower than in the period prior to the recession (2007; $84).   However, the volatility in floral dollar spending by the household for Valentine’s Day is also indicative of the major channel shifts in consumer floral purchasing prior to and since the recession, channel shifts detailed in the P&P Consumer Floral Seminar (Prince & Prince, 2014c).

The 49 percent purchasing incidence among U.S. floral-buying households in 2013 (Figure 1) means that an estimated 39 million households had purchased floral products for Valentine’s Day in 2013, similar to the number of households that purchased in 2010.   In fact, the purchase percentage trend across the five survey periods suggests a slightly downward trend, as depicted in Figure 2.   P&P conducted statistical trend analysis on the Valentine’s Day purchasing data across the five survey years using pre-planned, single degree-of-freedom orthogonal contrasts (MANOVA program in SPSS Advanced Models; Anon. 1999), and P&P is 75% confident that the slight downward linear trend is real, and not due to chance.   Although P&P’s level of confidence in this finding is lower than P&P’s traditional 90% confidence level in most reporting, across the 17-year time horizon, three of the four period to period trends also were down (up only for 2010).

The "outlier" up-tick in 2010 may relate to the holiday falling on the week-end, with mass-marketers likely capturing "late" Valentine’s Day floral sales during week-end shopping (note that average household dollar spending for Valentine’s Day in 2010 also was lower, indicative of more mass-market floral sales).   Collectively, the P&P consumer data indicate a slight downward trend in household floral purchasing for Valentines Day since 1996.

P&P suggests that members of the U.S. floral industry are largely unaware of this long-term declining trend in consumer floral purchasing for Valentine’s Day due to several factors.   For one, the level of household floral purchasing for Valentine’s Day is currently relatively high, ranking third highest among all holidays and occasions surveyed by P&P (bested by Mother’s Day, and year-round birthday gifting), thus small percentage changes from a high level are likely more difficult to assess, from time period to time period.   Another and likely more important factor is that the number of households has continued to grow in the U.S., albeit slowly over time, even through the recession years.   This household growth bolsters the size of the U.S. floral market over time, which masks the decline in the incidence of floral purchasing for Valentine’s Day.

Figure 3 shows the rate of growth of U.S. households over the P&P consumer survey periods. In the survey periods prior to the U.S. recession (2007 & prior years), the U.S. household growth rate was averaging about 1.5% annually.   After 2007 (the recession years), the average household growth rate had slowed to just under 1% (about 0.9%), yet still increasing annually, on average.   Thus, with U.S. household growth rates around 1% to 1.5% annually, that level of household growth largely mask the very small annual percentage decline in household incidence of floral purchasing for Valentine’s Day, e.g. the holiday purchasing percentage is declining slightly, but the whole household "market pie" is getting larger at a slightly higher rate.   Since 1996, the number of U.S. households has increased 22%, while the incidence of household floral purchasing for Valentines Day has declined four percentage points over that same time period.   P&P estimates that in 1996, 37.5 million U.S. households purchased floral products for Valentine’s Day, and in 2013, that estimate was up to 39 million households, even with the lower incidence of purchasing floral for the holiday in 2013.   And this analysis does not take into account annual price increases in Valentine’s Day floral products and services that would have likely occurred over the past 17 years, further bolstering Valentine’s Day floral sales estimates over time.

Recent large-scale failures in timely delivery of Valentine’s Day and other holiday floral products to consumers among key wire services and "order gatherer" operations are concerns for future consumer floral purchasing, and may forever dampen consumers’ purchase likelihood for floral.   How those offenses are handled to the satisfaction of the purchasers and floral recipients is key to the retention of customers, and the probability of increasing floral-purchase likelihood going forward.

While the overall long-term trend in household floral purchasing for Valentine’s Day is down slightly, there are several key consumer segments that are "bucking" that long-term trend, and are increasing their purchasing of floral products for Valentine’s Day.   In P&P’s consumer floral survey, ten demographic characteristics of the floral-buying households are captured and analyzed (Table 1).    In prior reporting, P&P has highlighted consumer age, and presence of teenagers within the household, as two key demographics that drive floral purchasing for this holiday (Prince & Prince, 2012a).   In this reporting, P&P updates those two key demographics from the 2013 survey.   The P&P Consumer Floral Seminar reviews all the key consumer demographic trends over time that have a positive and negative impact on consumer floral purchasing for Valentine’s Day, and for the other 20+ holidays, events, and occasions of floral purchasing measured in the P&P survey.