Supermarket NONFOODS Business: Words of comfort

Terrorist threats, bad weather, and war have unnerved consumers and impacted retail spending. Indeed, people have switched much of their buying from clothes and accessories to comfort-type items like food staples, batteries, candles--and of course, the obligatory duct tape

One category that traditionally does well in times like these is greeting cards. "Grocery stores represent the place people go for their basic needs," says Marianne McDermott, e.v.p. of the Greeting Card Association in Washington, D.C. "While people may be cutting out a lot of their shopping, they will still need grocery items, and that is where the entire non-occasion cards category is doing particularly well."

Mark Haworth, manager of new business development for Avanti Press in Detroit, has noticed this trend, as well. "The first time it happened was during the Gulf War," he says. "Then came Sept. 11 and all that has followed since. Greeting cards give people the ability to let somebody know you are thinking about them, and because they are so affordable, they let you do it on a regular basis, which is something people need right now."

The challenge grocers face is that consumers do not view their stores as a destination for greeting cards. However, when they buy greeting cards at a supermarket, they tend to pick up more than one at a time. Key to boosting greeting card sales is letting consumers know that you have them, and then offering something for every need.

"What we have found is that the higher the visibility of the social expressions category in the store, the greater the success is within the department," says Dan Moraczewski, v.p. sales-supermarkets, at American Greetings. "The primary shoppers in grocery stores—women—are very busy today. When they are shopping in the store they are skipping over a lot of aisles to get what is on their list or simply selecting items from the circular.

"As a result, we are working with our retailers to run more promotions and to be included in their circulars and loyalty card promotions. We are also doing a lot more outposting in other departments to remind the consumer of what is available during every step of their trip through the store."

In addition to posting signage in other areas of the store to drive traffic to the greeting cards section, manufacturers are finding creative ways to bring the cards themselves to other parts of the store. This is one area in which some of the smaller greeting card companies have found a niche in which they can work together with the two giants of the industry, Hallmark and American Greetings, to the benefit of all.

"In a large grocery store, there is usually an exclusive arrangement with Hallmark or American Greetings, and you cannot go into the aisles," says Avanti's Haworth. "That is where we come in. We are not trying to take space from them, but rather aim to complement what they already have. So for most grocery stores we are in, we are not in the card department; we are in the pet department with our humorous pet line, or we are in the floral department with our 4U line, which has lots of floral images."

Cards and flowers

Pawtucket, R.I.-based Premier Greetings, the value division of Paramount Cards, offers a program called Off the Shelf, which capitalizes on sales opportunities outside the immediate greeting card department by positioning a skeleton rack in various parts of the store, depending on the promotion, such as near the flower area for Mother's Day. "This offers pure incremental sales, because not everyone is going to walk down the greeting card aisle," says v.p. of marketing Joe Solis. "But if you are picking up a bouquet for your wife on Valentine's Day, you will see the cards right next to the flowers."

Northern Cards, an Ontario, Canada-based manufacturer, has developed a program strictly for seasonal opportunities. Called the Event Rack, it is a portable rack that is displayed only during seasonal occasions, then removed when the event is over. "This enables the grocer to maintain a full availability of everyday cards on their regular racks," says e.v.p. Diane Cameron.

Getting consumers to the card aisle is one thing; getting them to purchase a card is something completely different. That requires a knowledge of the demographics of each store's shoppers as well as a variety of cards that suit their needs—and, of course, price points that won't scare them away.

The Greeting Card Association says sales of everyday friendship cards have increased and that roughly half of the greeting cards sold each year are seasonal and half are everyday.

Among seasonal cards, Christmas is the No. 1 seller, accounting for 61 percent of individual seasonal card sales. Birthdays are far and away the most popular of the everyday cards, accounting for 60 percent of sales, according to GCA.

Avanti's Haworth attributes this to baby boomers. "One of the biggest requests we have gotten last year from our retailers has been milestone birthday cards, because the baby boomers are coming of age," he says. "So we have come out with a line called Big Birthday specifically for them, and they have done very well."

One category that has exploded among the larger manufacturers is foreign-language cards, particularly in Spanish. Both Hallmark and American Greetings have expanded their lines of Spanish-language cards.

In February Hallmark launched its Sinceramente Hallmark brand, designed to help consumers from a broad range of Hispanic cultures find greeting cards that mirror the values and perspectives of their customs. The line offers retailers a great deal of flexibility in sizing their Hispanic offering, and the total everyday card line offers 70 feet of product space, encompassing more than 2,500 cards.

American Greetings has doubled its stocks of cards targeting the Hispanic market since last year, offering approximately 3,000 Spanish-text greeting cards with English translations, according to Moraczewski. The company's offerings include 795 birthday and everyday cards, Hispanic Christmas and Mother's Day cards, and special cards within the common Spanish line to celebrate holidays and occasions unique to the Hispanic culture.

Manufacturers are making sure to include a value line in their product mix for the grocery channel. "What has happened is the greeting card industry has alienated itself because of the pricing they have put through over the years," says Premier Greetings' Solis. "The result was that people who were buying cards for their cousins and friends stopped doing that, and instead just bought them for obligatory reasons, such as a spouse's birthday or a child's birthday.

"By offering our value line of cards, we are bringing these everyday customers back to the card racks, and they are buying more than one at a time."

Re-emphasizing value

Hallmark has emphasized its value line of 99-cent cards through national TV spots. The ads point up the relevance of sending cards to friends and co-workers, not just family. "It makes sense to re-emphasize the value message," says Jim Welch, s.v.p. of Hallmark marketing. "It reinforces our value to consumers, while positively affecting the greeting card category."

With so many types of cards to choose from, how is a grocer supposed to decide what is best for his customers? The best way to manage the greeting card category, manufacturers say, is by not managing it at all. "To sit down and try to make hundreds of decisions to fill a rack is just not worth their time," says Avanti's Haworth. "Plus, there is a lot of maintenance to be done—straightening out the cards, filling orders, removing products that are not selling. And with new cards arriving five or six times a year, as well as seasonal changes to take into consideration, it's a lot of work. But this is what the card manufacturers do for a living."

Leaving the decision-making in someone else's hands, however, requires a lot of trust, and experience has made some grocers reluctant to hand over the reins. "One of the biggest concerns we hear from our new grocery customers is that they have gotten poor service with their previous card companies," says Haworth. "So emphasizing the service aspect is very important. Besides, if they are not selling cards, neither are we."

Nonfoods editor Joseph Tarnowski can be reached at [email protected].
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