Businesses Are in Love With Valentine's Day

NEW YORK ( MainStreet) -- The more than 100 Nestle Toll House Cafe by Chip franchises have been ready for Valentine's Day for at least a month.

"This is a big day for us -- huge day," says Ziad Dalal, president and founder of the premium dessert concept store and cafe.

"We are all about desserts, so it's a great opportunity for our business to service our customers with gifting and indulging," Dalal says. "The nice thing is that you can do it for all budgets. You can do a small love note with a cookie and customize it with a decoration on it to your loved one for less than $10 or you can buy a full-sheet cookie cake or heart-shaped cookie cake. It's a beautiful time because it's a very personalized holiday that can be for a loved one or the family."

As consumer confidence picks up, Zalal is expecting this year's Valentine's Day in particular to be very profitable for the cafes, which were created back in 2000 through a co-branding agreement with Nestle.

"Our goal is to be north of a 15% increase for the same holiday. We're already at 17%," he says, comparing sales with this period last year.

From restaurants to florists to specialty chocolate shops, Valentine's Day is a bright spot for small-business coffers even in the dark days of winter.

Small-business owners have even more opportunity to benefit from Valentine's Day this year. The National Retail Federation expects consumers to spend a whopping $17.6 billion on Valentine's gifts and activities for friends, family, loved ones, even their pets. According to a January survey, consumers on average will spend $126.03 for the holiday, up 8.5% over last year and the highest amount in the survey's 10-year history, the NRF says.

"As one of the biggest gift-giving holidays of the year, it's encouraging that consumers are still exhibiting the desire to spend on discretionary gift items, a strong indication our economy continues to move in the right direction," NRF President and CEO Matthew Shay said in a statement. "Anticipating high foot traffic in the coming weeks, retailers have replenished their inventories and will entice eager shoppers with great deals on everything from special menu items at restaurants to clothing to flowers and, of course, chocolates."

Valentine's Day consumer spending is second only to Christmas (and followed by Mother's Day and Easter). But when it comes to gift giving, while Christmas may be about "the bigger the better," Valentine's Day is more about "it's the thought that counts." This is where small businesses can really show their stuff, NRF spokeswoman Kathy Grannis says.

"A small business that sells novelty gift ideas, it's the perfect opportunity to get in on the action of how big the holiday is," she says. "The days of being silenced by big boxes are over. It's now very easy for small businesses to get a piece of the consumer spending pie. It comes down to variety, value and unique merchandise."

Valentine's Day is also a big holiday for restaurants, from couples and families using the night for a meal out to those who want to stay home but don't want to cook. National Restaurant Association spokeswoman Annika Stensson says the holiday is likely to give restaurants a midweek boost, given that Valentine's Day is on a Tuesday this year.

In addition, restaurant gift cards are a popular item for gift giving. Based on an informal poll last weekend, one-third of participants said they would like a restaurant gift card for the holiday.

Yet small businesses need to know when and how to take advantage of these profitable times of year. Dalal says the most important thing for a small business is preparation -- well ahead of time -- and putting in place processes to catch sales as early as possible.

"For a small-business owner it's very important to be proactive and to take advantage of these major holidays, because if you miss them they don't come again for another year. That's your lifeline," he says. Nestle Toll House Cafes have been draped in Valentine's decorations, and the stores have been heavily promoting pre-ordering for customized desserts to help alleviate the last-minute rush on Valentine's Day.

"You have to be ready," Dalal says. "You have to have the cafe mood and all our point-of-purchase ... we plaster the holiday all over the cafe -- on the display case, on the walls. This message has to be communicated. If you don't do it by early January you're too late."

"We encourage advanced orders. We even do discounts and notices so the customer is not waiting last second," he says. "We put all these processes in place way ahead of time so we get enough orders and provide the best service for our customer. Our team members, management and staff are aware and prepared to deliver that."

Social media expert and entrepreneur Natalie Gouche says using social media to grab customers' attention is particularly important. As Nestle's Toll House Cafes have done, Gouche says it is important to make sure your brand is visible to the customer and begin promoting as early as possible. Blatant calls to buy, though, are unlikely to work with customers, she warns. Small-business owners need to be a bit more creative, such as offering content that suggests gift-giving tips for Valentine's.

"It's not always about putting in your links. Make people think you're giving them value before you expect them to buy items," Gouche says.

She also suggests maximizing exposure by partnering with other business owners who offer complementary products or services. This can work online and offline.

Chocolatier Jean Younger, who owns Sleepy Jean's Confections in Lawrence, Kan., does just that, working with several local wineries and florists to market her chocolates all year round.

"Valentine's is the time for heart-shaped boxes, so we have varying sizes at different price points and different products for the heart-shaped box. We also pair our chocolates at the florists with stuffed animals, dip strawberries on sticks so they can go in arrangements, have foil-wrapped lips and heart-shaped suckers -- anything that says 'love' that we can make out of chocolate, we do. Our wine fusions combining chocolate and wine our big sellers as well," she says.

But Valentine's Day means producing, from scratch, multiples of what she normally does, so Younger says she tries to promote pre-ordering as well.

"This holiday is very frustrating because it is a last-minute holiday -- unlike Christmas, where people are ordering in advance," she says. "I remember my first year. I had so much stock still available on Feb. 12 I thought I really overdid it, but in reality, on Feb. 14 there was barely anything there, so it is very hard to plan for. Plus with the slow economy, it is hard to determine increases from year to year. So yes, Valentine's Day is a boost, but a very nerve-wracking boost!"

-- Written by Laurie Kulikowski in New York.

To contact Laurie Kulikowski, send an email to: Laurie.Kulikowski@thestreet.com.

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