Opportunities Are in the Cards

In June 2016, the IBISWorld report Greeting Cards & Other Publishing in the U.S. painted a rather uninspiring picture of the greeting cards category in today’s digital age.

“Over the past five years, the proliferation of paperless substitutes has dampened revenue for the greeting cards and other publishing [industries]. … Moreover, as many downstream markets have consolidated, such as brick-and-mortar book store retailers, the industry has grappled with fewer retailers including industry products on their retail shelves.”

Does that signal a death knell for the greeting card market? Not so fast, industry experts say.

Mark Twain’s comment when the New York Journal ran his obituary prematurely is applicable to the greeting card category today: “The reports of my death are greatly exaggerated.”

Stable Market, Room for Growth

According to Peter Doherty, executive director of the Greeting Card Association, the greeting card category remains relatively stable across all age groups; even members of Gen Y are active card senders, Doherty says. “Greeting cards continue to be a really meaningful way for people of all ages to connect. At the GCA, we continue to see new members—many small, niche publishers—join the association, so we continue to be very positive about the category,” he says.

Manufacturers are similarly optimistic. Stacey Howe, VP/GM of national accounts for Hallmark Cards, describes the category as “a stable, yet vibrant business with opportunities for growth.”

Citing GCA research, Howe points to the 6.5 billion cards American purchase annually, or nearly 18 million cards a day.

Supporting the findings is Hallmark research showing millennials “are growing their spending in this category faster than any other generation,” as proof of the category’s potential.

“Contrary to popular belief, the surge in social media is actually supporting our business,” Howe says. “What we’re finding is in this increasingly digital world, consumers crave the tactile experience that greeting cards provide. Sending a friend a greeting card on her birthday breaks through the clutter and makes a bigger impact than a simple [happy birthday] sent through text or Facebook.”

In fact, the silver lining in the IBISWorld report is the prediction that a rise in consumer spending “may lead to more consumers purchasing high-cost greeting cards, such as interactive greeting cards.”

That is just what some manufacturers are already finding.

“While greeting card sales as a category have not grown in unit sales for many years, the category has grown due to higher end product, continued growth in the humor category, and more specialized sentiments that appeal to a wider range of senders,” says Paul Griffler, director of sales and marketing for Sellers Publishing, manufacturer of the RSVP greeting card line.

Great for Grocers

The fact that many card-focused stores are no longer part of the retail landscape has created a stellar opportunity for grocery retailers to compete in the category.

“There is a channel shift from card stores—places like Borders Books are not around anymore—and mass merchandisers have benefited,” says Marc Trobman, VP of development at Avanti Press, makers of the humor-based greeting card brands Avanti, A*Press and America.

As Doherty notes, the category’s profit potential is a big draw because greeting cards are high-margin items. It can also be a relatively “hassle-free” category, according to Griffler.

“Many supermarkets are using scan-based trading to avoid carrying the inventory on their books, plus it’s a fully vendor-serviced category,” he says.

Basket-building potential is another plus. “Cards are often impulse buys, so if someone sees them in a grocery store they’ll think, ‘I need a card for …’” Trobman says.

Innovation Drives Sales

The fact that old and young shoppers alike continue to embrace printed greetings doesn’t mean card companies are relying on old formats to drive sales. Creativity and innovation, in both design and display, are keeping products fresh and relevant.

In the past 18 months, RSVP has introduced two new brands of cards to complement its core line: Wicked Funny, which “leverages some of the strongest humor talent in the industry,” and High Note, “a beautiful, sophisticated, design-driven line that blends a variety of well-known artists into an appealing presentation,” Griffler says.

Avanti introduced the America line, featuring what Trobman describes as “iconic images” of the United States.

Finding the Right Words

Cardthartic—a company that does especially well in the condolence category—has seen card sales continue to rise, especially in the grocery channel, according to Marguerite Rawdin, the company’s customer care manager.

“People always tell us, ‘You always have the right words when words are hardest to come by,’” Rawdin says. “In 2017—for independents as well as leading regional chains—our cards generated same-store sales increases of between 4% and 10%. Notably, product turns, and is reordered, at the average rate of seven times a year in groceries, while in card and gift shops it’s three to four times a year.”

And in 2017, Hallmark launched grocery check stand displays to great success, Howe says.

“By placing a curated selection of greeting cards at the grocery check stand, we are leveraging a part of the store that has a captive audience, reminding them of their greeting card needs and driving impulse purchases,” she says.

Make Cards a Competitive Advantage

There isn’t one sure-fire approach that will make a store a destination for greeting card shoppers. It likely will take a combination of merchandising and marketing tactics—some in-store, some in print and some online—to build cards into a profitable category, industry experts say. Tactics to consider:

Perhaps RSVP’s Griffler sums up the best approach to greeting card merchandising in grocery retail: “Well-stocked, well-lit, well-signed card departments lead to a great shopping experience, but keeping the department stocked with new cards wins the day.”