Projected Father’s Day Spending Reaches All-Time High
June 15, 2017 | By Ketner Group
This blog was written by our intern, Madeleine Hatley.
Dads, and retailers, will be getting some extra love this year on Father’s Day, according to the National Retail Federation’s annual survey conducted by Prosper Insight and Analytics. Total spending for the holiday is expected to hit a record high of $15.5 billion.
Consumers are spending differently this year and are focused on the experience rather than the gift. For retailers, this means traditional tactics such as ads featuring sporting goods or cars will not suffice. When it comes to marketing around Father’s Day, retailers need to add a personal touch to effectively reach their target consumer.
“This is especially true when looking at the buying habits of millennials, most of whom crave a deeper connection to the brands they support when they shop for Father’s Day gifts,” said Elaine Kwon, founder of e-commerce management firm Kwontified, in a recent Fierce Retail article.
Kwon further explained, “that shoppers love the delight of sharing a “cool new brand” as something that makes for a terrific gift. She foresees new brands with cult followings to transition strongly this Father’s Day. For example, she named brands such as Bevel and Dollar Shave Club.”
NRF says the average shopper will spend $134.75 this year on Father’s Day gifts. Beyond experiences, other popular gifts include gift cards, clothing and consumer electronics. Each of these categories are projected to sell over $1 billion this year. Gifts for handy dads such as tool boxes and DIY items were less popular but still expected to generate $885 million in sales. Retailers should curate their assortments and discount strategies across various categories to make the most of Father’s Day sales.
“Planning an assortment that goes beyond the usual cologne or bathrobe will work wonders for retailers looking to stand out. Since so many gift-givers want to surprise their dads with an experience, show how your products can tie into an exciting outing through your marketing campaigns,” recommends Angelica Valentine in a recent Quad Analytix blog referencing the NRF report.
Surprisingly, NRF reported that 39.9% of consumers plan on buying their gifts in department stores compared to only 33.7% planned to order gifts online. From rural strip-malls to major department stores, it has been a disastrous two years for retail. We keep hearing about the “retail apocalypse” and how everything is moving to e-commerce. Similar to Mother’s Day this year which also had record-high sales projections, many consumers still come to brick and mortar stores to touch and see, and make sure the gift is perfect for dad.
“Shoppers are planning to spend more than ever this year, and retailers have a lot to gain from this 8.4 percent larger projection over 2016 if they can tap into the right data,” said Valentine.
Last month, despite the projected increase in Mother’s Day spending, the retail industry experienced an unexpected decline in retail sales during May. We’ll have to wait and see if Father’s Day is able give the overall retail industry a boost for the month of June.
And there’s a niche market that definitely benefits from timely, gift-giving holidays. I am part of the majority of consumers (64%) that will buy greeting cards this Father’s Day. A sweet note adds a personal touch that any dad would appreciate. Personally, while shopping for the perfect card for my dad, I opted for a humorous approach (you know, dads love dad jokes). I decided on a Star Wars card with Darth Vader on the front that says, “We can’t pick our fathers so I sure lucked out with you.”
From all of us at Ketner Group, Happy Father’s Day!