News

Mother's Day revenue set to grow 3 percent this year

May 7, 2014

The time of year dedicated to pampering mom is quickly approaching and Americans are expected to splurge on gifts for Mother's Day. Market research firm IBISWorld expects total spending to reach $18.1 billion, up 3 percent from last year, with the average household spending $156.60 on related purchases. Ultimately, jewelry, dining out at restaurants and flowers will remain the most popular gifts, although gift certificates and electronics will gain traction among time-strapped shoppers looking to buy gifts online or at the last minute.

(All figures in constant US dollars)

Substantial improvement in disposable income, a key determinant of spending on nonessential items such as gifts, will propel greater spending on Mother's Day this year, according to the report. From 2013 to 2014, disposable income is expected to increase 2.6 percent, and this surge compares favorably with nearly stagnant income growth during the previous year.

Nevertheless, some items will appeal to consumers more than others; for example, jewelry, restaurant outings and flowers, are all recognized mom-pleasers. These historically popular gifts are expected to account for slightly under 50 percent of all purchases this Mother's Day. Jewelry and flowers will increasingly be purchased via the Internet, highlighting the appeal of online shopping to busy households, and the importance of e-commerce revenue to retailers. Companies that capitalize on these trends and offer same-day local delivery, such as 1-800-Flowers, stand to gain the most from such shifts in consumption patterns.

Consumers will also increasingly opt to purchase gift certificates for loved ones. Gift certificate purchases are expected to reach $1.9 billion this Mother's Day, up 3.2 percent from last year. Personal service gifts, such as appointments at spas or nail salons, have also become trendy, rising by 4.7 percent largely because of their convenience to book. Sales of electronics, such as tablets and iPhones, are projected to exhibit the highest increase at 6.2 percent, surpassing the other categories. Most notably, electronics are fairly expensive and its appeal is strongly linked to disposable income, rising rapidly during periods of falling unemployment and improving incomes. The release of new versions of popular devices also influence demand for electronics. For instance, the introduction of the iPhone 5S, iPad mini and Samsung Galaxy S5 over the past year, among others, have rekindled interest in electronic tablets, as compared with relatively stagnant product lines this time last year.

By contrast, greeting cards, houseware and gardening tools have declined in popularity. This is because households have gradually turned to e-cards, e-mail and social networks to send holiday messages. Consequently, expenditures on traditional greeting cards are estimated to decrease 2.4 percent this Mother's Day. Additionally, housewares and gardening tools have become progressively outmoded as more mothers continue to enter the labor force and family members divide household chores more equally. Therefore, purchases of these items have dropped consistently over the past few years. Apparel will remain popular with mom, but expenditure will rise a modest 1.9 percent, as other gift categories are perceived as more trendy and convenient to purchase.