Among the many unexpected trends we saw in retail over the last year was the significant shift towards spending in the leisure industry, as consumers moved away from physical retail purchases.
Leisure attracted one and a half times more spend than retail last year, and its growth was twice retail‘s rate. In what‘s being heralded as the experiential revolution, retailers found themselves on the back foot in the battle for customers.
One of the key dates for both the leisure and retail industry is Valentine‘s Day. With spend this year predicted to reach £1.3 billion in the UK, will this trend continue or will retailers fight back with a fresh approach to the event?
“It‘s certainly disrupting the Valentine‘s Day status quo for retailers”
Results from eBay have shown that both sectors are strong contenders, with retailers cashing in on “experiential gifts”. Although searches in the travel and holidays category shot up by 55 per cent in this period last year, so did sales searches for pieces of art, rising by 60 per cent.
Furthermore, searches for event tickets shot up by 57 per cent, but searches for books also saw a 39 per cent increase.
A breakdown of predicted spend from TNS shows that dinner, romantic getaways and drinks add up to 44 per cent of total spend, topping £315 million.
On the other hand, jewellery, flowers, outfits, cards, chocolates and general gifts are predicted to power ahead with a 51 per cent slice of the overall spend, totalling £359 million.
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Despite this, founding partner at KHWS Andrew Watts doesn‘t think the playing field is quite so balanced.
“The consumer has changed for good. We‘re in the ‘experience era‘ and consumers‘ desire to spend on leisure has surpassed desire to spend on the acquisition of possessions,” he said.
“Celebrating Valentine‘s Day is no exception, with many choosing to splash out on event tickets, minibreaks and experiences that will help them create lasting memories.
“It‘s certainly disrupting the Valentine‘s Day status quo for retailers, with traditional presents falling out of favour, gifts of chocolates and jewellery are under threat and it‘s pertinent to question their viability.
“There is more competition for consumer spend than ever before and if retailers choose to stick to established strategies they are, without a doubt, at risk of suffering.
“All is not lost for retailers, but maximising potential consumer spend does require a shift in mindset for brands as they evolve to meet changing consumer habits.”
“We‘re seeing a convergence of the two – retail and leisure creating ‘experiences‘ for consumers”
Retailers are an adaptable bunch and there is no doubt they are wise to the reasons customers are veering towards the leisure industry. There may be no clear winner this year, but both industries may integrate the strong points from the other to create something new altogether.
Omnico chief executive Mel Taylor said: “I don‘t think it‘s going to be spend on one or the other; at Omnico we‘re seeing a convergence of the two – retail and leisure creating ‘experiences‘ for consumers.
“We may find that consumers spend the same on retail, but create a Valentine‘s Day package together with leisure activities, predominantly food and beverage.
“Those shopping centres, or retail parks, that offer a mixture of both will benefit from this convergence on Valentine‘s Day.”