Personalized greetings are helping to place supermarkets on the road map for card destination stops.
"Personalized cards need to be part of the offering if you're going to be in the greeting card business and a destination department," said Jeff Manning, vice president of general merchandise at Bashas' Markets, Chandler, Ariz.
Since their introduction in the early 1990s, interactive card kiosks have sprung up in grocery aisles to attract new card senders and generate profitable incremental sales for supermarkets.
Retailers said consumers are willing to pay higher retails for the cards that are providing them with 40% profit margins. The personalized card segment also is adding extra dollars to supermarket card departments without cutting into traditional card volume.
"Card kiosks represent new cutting-edge
technology in retailing. They are doing well by bringing extra sales to our card departments," said Randy Martin, sales promotion coordinator at Harvest Foods, Little Rock, Ark.
David A. Weiss, president of Packaged Facts, New York, which last year released a study titled "The Greeting Cards Market," sees the computer card innovation as the natural outcome of the way greeting card marketers have embraced technology in retail and distribution. "Quietly, the greeting card industry has become one of America's most high-tech enterprises," he said.
The two major card companies, Ambassador Cards, Kansas City, Mo., and American Greetings, Cleveland, have pioneered the technology that has created the fast-growing interactive card segment.
Retailers expect card companies to go beyond merchandising personal greetings and begin selling other gift-related products.
"Eventually, the card companies will offer special products besides cards, including gifts and flowers. Consumers will be able to place orders through the modem. Modem technology will provide a lot of opportunities," said Joel Barton, merchandising and marketing manager at Raley's, West Sacramento, Calif.
But for now, computerized kiosks are enabling shoppers to choose from hundreds of all-occasion cards, personalize them with their own message and print them. Here's what some retailers said about their personalized greeting cards operations.
sales promotion coordinator
Little Rock, Ark.
We've tested American Greetings card kiosks at stores for two months and plan to eventually roll them out to about five more stores this year. They appeal to a lot of people, especially the computer-knowledgeable. As people begin to feel more comfortable with computerized card kiosks, they will come back to use them on subsequent shopping trips. These cards are more popular with affluent shoppers. Our kiosks are at the greeting card section and also by the floral department, where cards are sold for $3.50 at 40% profit.
merchandising and marketing manager
West Sacramento, Calif.
For the last year, we've had 30 or so computerized in-store card kiosks that fill a niche, and are helping to make our department a complete center for cards. We have about 25 Ambassador Cards Touch-Screen Greetings and five American Greetings' CreataCard kiosks. The kiosks appeal to our core group of mostly women shoppers, who are 25 to 35 years old.
Personal greetings give us additional volume without taking sales away from traditional cards. Card kiosks are going into our new and remodeled stores. Ambassador is working with us on installation obstacles associated with running a telephone line in the flooring.
Seaway Food Town
Ambassador Cards' kiosks have been at about nine stores for almost a year and are providing a higher dollar ring than most other cards. They place us on the cutting edge, and certainly represent a good opportunity for food stores.
The card company maintains the units, and we plan to add them to other stores. Sales will only build gradually, until the card supplier decides to hit hard with advertising to drive this part of the business. The card companies haven't advertised them much. People have to hear about it before they try it.
VP, general merchandise
Carr Gottstein Foods
We've sold over 12,000 cards at five kiosks, which have been in our stores for nearly a year. They've created a market of shoppers who have never thought of sending a greeting card.
Sales off the kiosk, serviced by American Greetings, are very profitable at $3.50 per card.
We've seen those machines churn out tremendous growth from when we first put them in. Volume has grown monthly and for every holiday, without taking sales from the regular card racks. Most kiosk customers are under age 50, including those more familiar with computer operations.
VP, general merchandise
Hy-Vee Food Stores
Personalized card kiosks are new, different and fun. We're still assessing the space devoted to kiosks, since some stores are getting a better payback than others.
We are almost 100% American Greetings, except for Kansas City, where we have 10 Ambassador Cards kiosks.
VP, general merchandise
Our 10 American Greetings kiosks are doing well. Card kiosks are a service customers want. If personalized cards aren't in your stores, you are at a disadvantage. We expect to have a card kiosk at every new or upgraded store. A kiosk's performance should really be judged on its contribution to the overall card section, and not solely on its merits as a separate entity.
Pay Less Supermarkets
Our greeting card sales are running $10,000 to $14,000 higher at two stores with Ambassador Cards' kiosks. When first introduced, personalized cards priced at $2.95 sold well. When the price was increased to $3.50, sales continued strong. We're making about 40% profit on the sales of each card. Each location works well as long as there is space for customers to stand in front of the machine. Ambassador Cards changes the cards for major holidays, including Mother's Day, Valentine's Day, Father's Day and Easter, by downloading software over a telephone line.
The kiosk card shopper profile is younger and computer literate, from teens to young professionals. The older generation still seems more attracted to traditional cards.