The Heart of the Gift: Exploring the Psychology of Valentine's Day Giving

Love is great for business — or so it seems. The National Retail Federation predicts that this year, consumers will celebrate Valentine’s Day by spending up to $25.8 billion in gifts, averaging out to $185.81 per person. While the perfect romantic reveal for a significant other remains the dominant contributor to the holiday’s spending, a big chunk of spending growth is also coming from gifts for friends, co-workers, and even pets.

"People are normalizing their Valentine’s spending when it comes to what they purchase for nonromantic relationships in their lives,” Katherine Cullen, NRF vice president for industry and consumer insights, told NBC News. “They’re getting back to the true purpose of celebrating relationships."

So how can savvy marketers tap into this heartwarming holiday across different relationship contexts? Here are three key tips, informed by academic research:

#1: Leverage Gifts of Distinctiveness for Self, Popularity for Others
From chocolates to jewelry, best-selling and limited-edition products abound in the marketplace with brands trying to capitalize on the holiday, like the Stanley Valentine’s Day tumbler that sold out in minutes. 

With self-gifting on the rise this year, how can marketers use limited edition and best-sellers to target both self-purchasers as well as those buying gifts for others around this holiday? Research by Temple University’s Dr. Laurie Wu and Arizona State University’s Dr. Christopher Lee found a “scarcity for me and popularity for others” effect that may help marketers reach both audiences. When buying gifts, consumers preferred best-selling items for others and limited-edition items for themselves — valuing uniqueness for themselves and reducing consumption risk for others.

Marketers can tap into this distinction by promoting specialty and limited-edition products as indulgent self-gifts. For gifts to others, brands can call out a product’s broad appeal and popularity.

#2: The Thought Really Does Count
The context of gift-giving motivations are important to understand since gifts can serve as social signals, especially for new or uncertain relationships. Given that many consumers save Valentine’s Day shopping for the last minute, many marketers seek to reach last minute shoppers by touting quick turnaround times and fast shipping.  Ads like UberEats’ star-studded Superbowl commercial have even spotlighted forgetful givers with the line, “to remember something, you have to forget something else.” 

However, a last-minute convenience can also have an adverse effect if recognized by the recipient as it turns out there is some truth to the saying “it’s the thought that counts.” A study in the Journal of Experimental Psychology suggested that knowing that the gift giver put thought into choosing a gift can increase the receiver’s appreciation of the gift. Further research by Givi, Galak, and Olivola reinforced that when recipients realize the giver put a lot of thought into the gift, they also tend to like it more and even help strengthen the relational bond.

#3: Practicality Matters
Valentine’s day is also an opportunity to gift outside of romantic relationships as well. When gifting among friends, desirability of a cool, flashy gift can be hard to ignore, but research by Professor Nathan Novemsky of Yale SOM and colleagues suggests that gift givers often overlook the feasibility of the gift, meaning how easy or convenient it is to use. For example, gifting a new high-tech gadget with a lot of settings and features seems high on desirability, but the recipient then needs to figure out how to use all of those features, which might be difficult or a barrier preventing use. “Marketers might encourage givers to imagine themselves using the gift,” the authors write. This can help the giver better align to the interpretation and perception of the recipient, “leading givers toward the choices that make the receivers happier and yield more relationship benefits.”

By understanding the nuances of gift-giving motivations and the importance of thoughtfulness and practicality, savvy marketers can make the most of this heartwarming holiday. So whether it's indulging in a limited edition treat for yourself or finding the perfect gift to show someone you care, remember that Valentine's Day is all about spreading love in its many forms.

To discover more marketing implications through consumer behavior, reach out to us at ycci@som.yale.edu and read more from YCCI here.