Paperless substitutes and higher postage stamp rates have taken a toll on the greeting card category. But even as more consumers migrate to e-cards, card manufacturers say that occasions remain when only a traditional paper greeting card will do, and cards and wrap continue to see strong sales at retail.
According to Jeanne Sheehy, executive director of the Washington, D.C.-based Greeting Card Association, it’s a myth that people are sending fewer cards. “While more people may be acknowledging birthdays with the availability of social media, they are not sending fewer cards as a result,” she asserts. “In fact, with the emergence of digital and social greetings, the term ‘card-worthy’ has emerged for people to whom one sends a paper card. The term captures the emotional connection of sending and receiving a greeting card.”
New and Improved
Cleveland-based American Greetings sees consumers turning to digital greetings as a complement to paper greeting cards, not a replacement, according to a company representative, who adds that American Greetings paper cards consistently outperform the general merchandise category in the grocery channel. “We are seeing growth in both cards and gift packaging as a result of our focus on innovation,” stresses the rep. “These new products offer a great value at a slightly higher price and have put the excitement back in greeting card departments.”
Sheehy agrees that innovation is the key to capturing sales and the premium end of the card market, with items featuring interactive sound, LED lights and other customized enhancements as one driver of category growth. “The growth of social media and frequent communication has made consumers willing to spend more for special-occasion card-sending occasions like weddings, births [and] milestone birthdays, to name a few,” she says. “Cards featuring special techniques, intricate designs and new technologies are at the top of the price scale for paper cards, but they remain popular as consumers look to send cards to ‘card-worthy’ people in their lives.”
Designer Greetings, a company that’s strong in the value segment, has expanded its premium offerings. “We’re seeing embellishments growing, from jewel gems and tipons to stamping and embossing,” affirms Michelle Madonia, art director at Edison, N.J.-based Designer Greetings. “These products can retail for up to two times the price of traditional greeting cards.” Designer Greetings’ newest line, Designer Boutique, will feature hand-painted scenes enhanced with graphic-art elements, and its new premium Around the Corner line features die-cut scenes.
This spring, American Greetings launched Automotions, a line of humorous birthday cards with full-motion 3D lenticulars mounted to small motors and synced to music. When a card is opened, the recipient is greeted with an animated, continuous-loop punchline. Additionally, the company included audio chips in its Yakety Plaques Father’s Day collection, featuring a singing trophy with eyes that bounce.
Boulder, Colo.-based Leanin’ Tree has increased the number of cards it offers that include embellishments, such as thermal inks, foils and glitter, but marketing director Pat Wallace admits that consumers still show some resistance to cards costing more than $5.
Finding the Right Niche
On the other end of the price spectrum, the value card segment is also strong. “The value-priced arena has a lot of competition,” notes Designer Greetings CFO Dawn Garvey. “This segment is a real presence in the market, and it’s not going away.” Designer Greetings focuses on value cards that offer boutique-like elements and retail for $2.99 to $3.49.
Niche collections are also an important part of the category. Designer Greetings’ Home of the Brave line of cards for people in military service has experienced strong sales, while Exposé, a humorous line with photographic elements, has been particularly popular in the supermarket channel. Leanin’ Tree’s cards featuring Western art continue to be popular, inspiring the company’s recent launch of a niche line of humorous cards featuring “redneck” jokes from comic Jeff Foxworthy.
Hallmark recently expanded its greetings portfolio with collections that meet the needs of distinct shopper segments, such as Millennial and multicultural consumers. The Kansas City, Mo.-based company last year revitalized its Mahogany brand, targeting African-American consumers, and will give its Spanish-language offering, Sinceramente, a reboot this summer with increased cultural specificity that reflects a broader range of Hispanic lifestyle needs, preferences and voices.
Millennial consumers are the intended target of Hallmark’s Studio Ink line, featuring nine distinct collections, and content, size and price points (starting at $2.49) that make the line more accessible to younger consumers. New postcard packs (starting at $4.99) introduced as part of the line are positioned as a way for younger consumers to “create new ways to connect and share.”
According to James Melton, VP/general manager of national accounts at Hallmark, “Two ways we are helping retailers better serve shoppers [are] an expanded greetings portfolio and localization.”
Mix and Match
Convenience is key for shoppers, so it’s important that greeting card companies and retailers offer the right mix of greeting cards, gift wrap, stationery and gifts to ensure products in each store meet the specific needs of local shoppers. “Using merchandising elements such as end caps and off-shelf displays work well to keep these products top of mind and front and center,” advises Sheehy. “It’s also important to partner with retailers to increase marketing efforts, through mailings to loyal shoppers to increase their purchases with special offers. Together, these steps can lead to incremental growth of a very profitable category.”
“The more you can add height to the aisle with balloons or gifts at the end of the aisle, the way that Wegmans merchandises the department, the more impact the department has,” points out Designer Greetings Marketing Manager Liz Maciorowski. The company has seen strong sales in regional supermarket chain King Kullen, based in Bethpage, N.Y.
Designer Greetings offers retailers an array of spinner and rolling racks to maximize consumer exposure to the category. “Retailers get more flexibility with spinner racks, since they can place them near floral, the bakery or even use them to close of checkout lanes,” explains Maciorowski, adding that all of those options lead to sales lifts.
Leanin’ Tree’s Wallace says that end cap displays get a lot of attention in high-traffic areas. “Cards are an impulse purchase, so displays really generate sales,” he says. Leanin’ Tree offers a full-face spinner rack that takes up only 27 inches of space. “Full facings allow the cards to have more impact,” he observes. “It’s also crucial that displays are kept neat. It’s really easy to lose consumers, so a well-kept department is really important.”
“New product layouts and navigation tools will help each shopper find the perfect card,” notes Melton. “The new Hallmark brand experience will help simplify a shopper’s trip while encouraging multiple card purchases and, most importantly, improve the overall experience.”
“Two ways we are helping retailers better serve shoppers [are] an expanded greetings portfolio and localization.”
—James Melton, Hallmark