Valentine's Day: From Romance to ROI

By Beth Cox | Posted February 10, 2004

There was a time when I thought Valentine's Day was just an opportunity to express affection for your significant other — maybe buy a gift of flowers or chocolate, or go out to dinner after the workday.

I never gave it much thought.

Now, as a budding e-commerce entrepreneur, I see it as another holiday-based sales opportunity.

Valentine's Day is big business for lots of small companies. In fact, a recent survey from the National Retail Federation and Big Research says that more than half of American consumers (59.8 percent) will celebrate Valentine's Day, providing a boost to florists, confectioners and jewelry stores everywhere, online and off.

The report found that the average consumer in the U.S. will spend $99.24 on Valentine's Day, up from $80.44 last year. In all, Valentine's Day spending is expected to reach $12.79 billion this year.

Almost $13 billion? Even a small slice of that pie is worth going after.

"From co-workers to classmates, Valentine's Day has become a holiday to express appreciation for a variety of people," says NRF President and CEO Tracy Mullin. "Valentine's Day has become a very big business for retailers in what is traditionally one of the slowest shopping months of the year."

eBay sellers are well aware of the power of this holiday. A search for the word "Valentine" this week turned up 42,725 items listed for sale, ranging from cars to gems. And of course all the big flower, florist and candy sites have cranked things up for this time of year.

According to the National Confectioners Association, Valentine's Day ranks fourth in candy sales, after Halloween, Easter, and the Thanksgiving through New Years holidays. An estimated 36 million heart-shaped boxes of chocolate will be sold this year for Valentine's Day, according to the Chocolate Manufacturers Association.

As for me, we're having a small sale on budded orchids at our online orchid store, and we're pushing a few things on eBay, too. Of course as a micro business, we're not prepared to take macro risks, which is why we didn't load up to the gills with Valentine's Day-oriented merchandise.

What sometimes happens to small companies is that something comes along to propel them into the big time — or bigger time — and when it happens, you need to be prepared to act fast.

For instance, in February last year, a small chocolate company called CocoaMill Chocolate in Lexington, Va. found itself mentioned in the Wall Street Journal. The company's edible chocolate Valentine heart box was rated a "best overall" product for the holiday, and the orders began pouring in.

Increased demand equals increased shipping, of course, and CocoaMill called on Carlsbad, Calif.-based Nexternal Solutions for help. Nexternal offers Web-based e-commerce services that include hosting, shopping cart technology, a search engine friendly catalog, targeted e-mail campaigns and e-coupons, and links to both UPS and USPS online shipping tools.

CocoaMill CEO Bob Aimone told me that his operation "creates old-school handcrafted chocolates, but we sell them using state-of-the-art Web technology."

"My customers love getting their order confirmation e-mails with the embedded UPS tracking button," he said. "Before these tools, I would get many calls daily from customers wondering when their chocolate would arrive and whether or not it had shipped. Now I rarely get any."

Before using Nexternal's software, Aimone and his staff had to manually key data into UPS WorldShip software to create labels, which was very labor intensive. With the software, the label can be created directly from the Web-based order management system with the click of a mouse.

Another small chocolate company having some success online is Jubilee Chocolates in Philadelphia. They use solutions from San Mateo, Calif.-based NetSuite, which offers customer relationship management, order fulfillment, inventory, finance and product assembly, e-commerce and Web site management, delivered as an online service.

Getting national press helps. Jubilee has appeared on the cover of Gourmet magazine, and got a nice mention in BusinessWeek.

"We are a small company (less than 10 employees) but now we are routinely getting corporate orders in the tens of thousands of dollars. We are able to offer these clients superior customer service despite our size because of NetSuite's CRM features," says John Doyle, co-owner at Jubilee Chocolates, which got its start in 2000.

NetSuite Web Store lets you provide UPS rates to customers, and customize handling fees so that you can cover labor costs. You can also associate a tracking number with each transaction, allowing you and your customers to track shipments.

Doyle told me that Jubilee is indeed using the UPS integration function, "which is wonderful, I must say. We use the CRM to immediately catch corporate leads and market to them directly."

Meanwhile, back at my little company, I'm still using the Post Office for our shipping, but I can certainly see the value of these apps and I stand ready to try one out just as soon as we make the cover of a national magazine.

No doubt there are plenty of other such solutions on the market, too. But maybe the solution I'm really looking for is the one that gets us some national press.

Adapted from ECommerce-Guide.com, part of internet.com's Small Business Channel.

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