Who says co-dependence is a bad thing?
Supermarket retailers and their suppliers are finding new and better ways to work hand-in-hand using products and proven marketing techniques to maximize the potential of a mature social expressions industry.
While many retailers say its difficult to break out of single digits in terms of growth, others reportedly are experiencing healthy growth, according to Cleveland, Ohio-based American Greetings.
"Product content is absolutely king. That's what drives the category. Retailers that embrace the category by having well-articulated marketing plans in place will find if they combine great products with merchandising that creates a 'wow' statement at retail, customers will notice and sales will increase," said Steve Laserson, executive director of product management for American Greetings' everyday cards division.
Associated Wholesalers, York, Pa., has done just that and sales are up for the chain, which has 124 stores ranging in size from 48 to 120 feet. "An increase in the purchase of lower priced cards, our fastest growing card segment, is just one of the factors driving card department productivity. We make it a point to keep our departments clean, the card selections fresh and the cards accessible, price-wise. Additionally, we promote our cards regularly, so that we keep cards in front of consumers," said Charles Yahn, the wholesaler's vice president of general merchandise.
William Roatch, greeting card buyer for Texas-based Raleys, said, "Our sales are up 1% to 2%. We attribute the growth to several things, namely, retail price increases, more frequent card revisions, the availability of hot new licenses, and excellent supplier service, which includes detailed sales analysis." Moving forward, Roatch would like to see even more licensed properties, an increase in alternative cards, and frequent changes in department decor. "Customers want something new every time they come in."
Grabbing customers when they come in is important, according to Bob Yehling, director of general merchandise for Harp's Food Stores in Springdale, Ark., which maintains card departments as large as 108 feet. "Putting card departments early in the customer's shopping pattern helps our social expression business. We also put greeting card sections near the floral and pharmacy departments, where shoppers have to browse while waiting for orders and prescriptions to be filled."
Retailers say the key thing suppliers can do to help them stay profitable is to increase the production of relevant, up-to-date products. "Suppliers have to make sure cards stay fresh. Cards age quickly. Sayings change with generations. The card industry has to stay on top of trends. It's really tough to not sound dated, but in order to be relevant to the consumer it has to be done," Yahn said.
Suppliers have heard the call. Hallmark, Kansas City, Mo., introduced Fresh Ink this spring in all channels. It is a line targeted to women from 18 to 39 and offers hip, fresh messages and designs that speak the language of young women.
The company has implemented a marketing strategy that takes the cards out of stores and into places where young women spend their time. More than one million cards are being distributed to women at colleges and major universities. In addition to national advertising, ads can be found on billboards, buses, telephone poles and relevant Internet sites. Additionally, Hallmark is sponsoring sampling events across the country, featuring singers, dancers and entertainers in high-traffic locations that provide high visibility.
"With Fresh Ink, we're reaching a new consumer, and early sales are spectacular. The line is seeing heavy turn, it's generating excitement, and it may prove to be one of the most successful alternative lines ever launched by our company, said Wayne Strickland, vice president of sales expressions at Hallmark. Also available in all channels are the company's 99-cent Hallmark Warm Wishes line, and its ethnic lines: Hallmark en Espanol, Mahogany and Tree of Life, which help keep Expressions From Hallmark departments novel and fresh.
"The card lines that are available in all channels have been our stars of the last six months," Strickland said. "These Hallmark branded lines are propelling sales and they are an important part of the total Expressions from Hallmark product portfolio."
American Greetings' All New American Way program drives the company's product development philosophy. "Our All New American Way 2001 strategy provides consumers with products that are relevant to their communication and lifestyle needs," said Laserson. "With rapid increases in technology and mobility, our products meet an everyday need for more personal communications, enabling people to keep in touch, at the 'speed of life.' "
The card company identified nine trends from casual lifestyles to high tech connections that helped define the 2001 strategy. To support these trends, the company's Bubblegum, Intuitions, Just Between Friends and In Rhythm lines are all new contemporary offerings that have been added to the company's offering.
Retailers that carry American Greetings and Expressions from Hallmark have found success when it comes to selling licensed products. Licensed parytware sells particularly well. American Greetings owns the rights to properties like Pokemon, Rugrats, Barney, Bubblegum, Jellybabies, DragonBall Z and Sesame Street. Expressions From Hallmark carries products featuring Blue's Clues, Winnie the Pooh, Disney, Scooby Doo, Peanuts, Digimon, NASCAR Racers, Power Rangers, and Harry Potter, which will be sold in participating mass channel accounts in conjunction with the first movie release in the summer of 2001. "Licensing isn't an end to itself, it's a means to an end, which is to provide relevant, quality products to the consumer," said Laserson.
Both American Greetings and Hallmark place a premium on store-specific data. Both companies use sophisticated proprietary tools to monitor sales results and they use demographic and psychographic information to tailor card departments on a store-specific basis, giving a retailer exactly the right product mix for its particular demographic and geographic consumer base.
Greeting card sales are stagnant for Handy Andy Supermarkets in San Antonio, according to general merchandise director Marshal Borman, except for "the little bump we get during the holidays," a period when the industry overall sees a noted spike.
Promotions are one way many retailers are spurring incremental purchases and creating excitement within their card departments during this time. Noting the importance of retailer-specific marketing, Laserson said "Our national holiday and everyday advertising works hand-in-hand with our retailers' local advertising and promotional efforts."