The National Retail Federation released its Valentine’s Day 2014 shopping forecast last week, predicting total spending to reach $17.3 billion. The average person is expected to spend $133.91 on the holiday this year, up slightly from $130.97 last year.

The NRF has also said that consumers will be “frugal with their budgets,” underscoring the importance of strategic promotions and deals this Valentine’s Day. This focus was a clear takeaway from our conversations with two retailers in the Kimco portfolio that market heavily into Valentine’s Day, Hallmark and Conroy’s Flowers.

hallmarklogo3Hallmark is one of the best-known Valentine’s Day retailers. Valentine’s Day is the second busiest holiday for Hallmark, next to Christmas. The retailer has 2,400 Hallmark Gold Crown stores in the U.S.

Valentine’s Day is equally important to Conroy’s Flowers, which generates anywhere from 12 to 15 percent of its annual sales during the week of Valentine’s Day. The retailer has built a strong following in its home state of California through its brick-and-mortar and e-commerce businesses. One of Conroy’s four locations is in Kimco’s Corona Hills Plaza in Corona.

We talked to Kristi Ernsting from Hallmark’s PR team and Mort Nistanaki, owner of Conroy’s Flowers, about where consumer demand is landing for Valentine’s Day this year, and how their businesses are meeting it through strategic marketing, branding, and promotion. Here’s what they told us.

How busy is the Valentine’s Day shopping period for your company?


Mort Nistanaki: It’s a big holiday for us in terms of revenue. About 12 to 15 percent of sales are generated in that week. The challenge about Valentine’s Day is not so much the volume, but that flowers have to be delivered within the same day. Out of our Corona location, we do about 650 to 700 deliveries on Feb. 14, an additional 200 on Feb. 13. Last Valentine’s Day, customers were much more comfortable placing orders. Previous to that, customers were very cost-centered, and they really looked for values. Last year that relaxed a little bit more, and we were more effective selling higher-end products. Our average order value around Valentine’s Day runs about $65 to $80, depending on the store.

Kristi Ernsting: In terms of how many cards are sent on each holiday, Valentine’s Day is the second-largest, with an average of 142 million cards sent, and second only to Christmas. However, the difference between Christmas cards and Valentine’s Day cards are that most Valentine’s Day cards are left to the last minute. Over 50 percent of the sales for the entire holiday happen three days before Feb. 14. Needless to say, this makes our stores very busy places!

How do you meet the volume demand on Valentine’s Day?

Nistanaki: Lots of planning. We start planning for Valentine’s Day in October. We go through a forecast. Then we order the flowers in December. We bring about 20 drivers that will work on Valentine’s Day, and additional designers and sales people.

Ernsting: We do try and plan ahead as much as possible, but we also have shipments at-the-ready to replenish our stores with additional cards at the last minute if needed. We’ve learned over the years to make sure that these shipments include our best-selling cards, so that we still offer a full variety for those people shopping during those last few days.

What are some ways you keep your competitive edge sharp for Valentine’s Day?

Nistanaki: Well, #1 is our brand. It’s well-recognized not only in California, but nationwide. We’ve found that as people migrate to other cities and states, they still remember the brand Conroy’s. Beyond that, we’re aggressive in advertising locally and nationwide, trying to reach the customers who want to send arrangements and put a smile on people’s faces this Valentine’s Day. We send email blasts to our local customers for Valentine’s Day. We have access to about 20,000 emails that we have gathered over the years. We advertise on Google, Yahoo, and Bing. We also send flyers with $10 coupons to customers that have purchased from us in the past.

IN FULL BLOOM: About 12-15 percent of Conroy’s Flowers sales happen on Valentine’s Day.

IN FULL BLOOM: About 12-15 percent of Conroy’s Flowers sales happen on Valentine’s Day.

Ernsting: We do national advertising and in our TV commercials, we really try to speak to our customers’ hearts. For example, we have a commercial running now that shows a family sitting on a couch, and the husband and wife are separated by their kids. The wife gives the husband a card that says, “I am here, you are there, way too far apart.” We want to bring out the real emotion of Valentine’s Day.

What special promotions are you running for Valentine’s Day this year?

Nistanaki: We have three promotions. One is a dozen roses with bear-embossed chocolates for $100. The second promotion is also based on roses. We’re adding some lilies to it, and that runs about $150. And then we also add strawberries on top of that.

Ernsting: Our Hallmark Gold Crown retailers use a sophisticated database that allows them to target people that live close to their stores, and reach out to them with specific offers around Valentine’s Day. This year, we’re offering two in-store promotions. The first features items from our stuffed animal collection that can be purchased at a reduced price to customers who buy three cards or more. For example, one of the items is a Hearts Hopping Frog, which is a dancing plush frog that sings “Hot Hot Hot.” It’s regularly $29.95, but if a customer buys three Hallmark cards at the same time, they get it for $15.95. The second is a bounce-back offer that provides customers who buy five cards or more with a coupon for $5 that is valid even after Valentine’s Day is over.

How do you determine what types of products to offer for Valentine’s Day?

Nistanaki: We start by characterizing what kind of Valentine’s Day it will be. We look at three-month, six-month, and nine-month sales trends. Then we make an adjustment for the day, based on historical data. We also consider how much advertising will impact sales, what was successful in previous years, and so forth. Based on that, we come up with a menu of 30 to 35 arrangements, and purchase flowers based on that. Our forecast leaves a 10 percent margin of error. So we can always make adjustments as we get closer to the holiday.

GIVE A LITTLE LOVE: The in-store displays at Hallmark retailers feature something for everyone.

GIVE A LITTLE LOVE: The in-store displays at Hallmark retailers feature something for everyone.

Ernsting: Our founder, J.C. Hall, was a master at meeting consumer needs. He started selling greeting cards in 1910, when they were sent in the form of a postcard. He quickly saw the need for greeting cards to be more private, and to be sent in an envelope so that they couldn’t be read as they went through the mail. So, Hallmark began manufacturing its own greeting cards in 1915, and then expanded into gift wrap in 1917, with party products, gifts, and other products following. But the cards were the foundation. So, we have 104 years of built-in history showing us what’s popular at Valentine’s Day, and which products perform well.

What items are trending as most popular for Valentine’s Day 2014?

Nistanaki: This year customers are going more toward clear vases, so we’ve changed our menu to include more clear as opposed to color. Purple is definitely a theme. It was very popular at Christmas. It’s just a very soft color and goes well against red. We do about 200 or 220 orders of one dozen red roses for that week, whether it’s delivery or in-store purchase, so by far, red roses are the #1 demand during Valentine’s Day.

Ernsting: We offer more than 1,200 different varieties of greeting cards, so there’s a little bit of something for everyone. We have a new collection that we’re introducing this year from Sarah Jessica Parker, and it includes cards for birthdays, new baby, wedding, Valentine’s Day of course, and more. Our design team worked directly with Sarah Jessica Parker to create them, and they are gorgeous. We also have a line called “Between You and Me,” and those cards are popular because the messages are so personal and heartfelt; it’s amazing how someone can write one message that applies to so many different people and relationships. Our embellished cards also do really well. We have a card that has an envelope complete with a lock and key. Finally, for the past couple of years, we’ve had success with our Blooming Expressions collection, which features a silk flower that blooms slowly and presents a message when you press the button. We’re taking that a step further this year with Suddenly Flowers, which starts out as a box that opens into a bouquet of paper flowers with a message inside. So, both of these will last long after Valentine’s Day.

Let’s talk about the in-store experience for Valentine’s Day. How do you display your products to entice customers to buy?

Nistanaki: Our best profit margin is arrangements, so we set up our walk-in cooler with 100 to 110 arrangements. Out of that, about 40 percent are roses and 60 percent are mixed arrangements. We’ve seen more customers go toward mixed arrangements post-recession to save money, so we’ve put a lot of mixed arrangements in the cooler. We’re going to bring in lots of additional add-on products -- bears, chocolates, strawberries. What’s exciting at the store is lines will start to form and customers will know it’s Valentine’s Day because so many people are there.

Ernsting: We always start out with in-store banners in our windows. They help us to remind people of the holiday and communicate that we have great presents for Valentine’s Day. Our theme inside the stores is, “give a little love, give a little fun,” and we display cards and gifts at front of the store in a visual display that combines our elegant cards with our fun gifts. We also make sure that the chocolate is prominently displayed at the register so customers are prompted to pick it up before they leave. Another big part of our in-store experience is our gift wrapping options. So for example, we have ready-made gift bags available at the cash register that customers can just pop a gift in and be ready to go.

This has been an installment of StoreFront, an interview series with leaders of successful retail businesses. For more interviews, visit the StoreFront page. To learn how you can be featured, email us. We’d love to hear from you.