Paper cards retain value in digital age

Texting and social media have not killed the traditional greeting card business. “Facebook has caused most people to acknowledge more birthdays than ever before, but they aren’t sending fewer cards as a result,” said Susan January, president of the Greeting Card Association and VP of Leanin’ Tree Cards.

“The actual paper card still holds significant emotional value — especially for highly personal, emotional card-sending occasions, such as condolences/sympathy, weddings, new babies and milestone birthdays and anniversaries,” January said. In fact, industry statistics show that 90% of U.S. households purchase at least one card a year.

Enhancements, such as chips that allow cards to play a song or record a message, continue to provide freshness to the category. Yet while sales of greeting cards in drug stores are projected to be steady for the next few years, rising postal costs and manufacturing costs are forcing suppliers to find ways to keep a lid on retail pricing.

Suzanne Haines, VP marketing for Designer Greetings, said the company’s 50%-off program “can transform under-performing full-price greeting card departments into high-traffic departments.” “Stores that need a major point of differentiation have used the program to drive traffic and create a card department destination,” she said. “The strategy increases traffic and category sales while reducing on-hand inventory dollars.” Designer Greetings also offers a double-value program, which allows retailers to price higher-end cards between 99 cents and $1.99.

Manufacturers are quick to point out that the category can’t exist solely on value-priced merchandise. “Lowest price is not necessarily the only thing people value when shopping for products that help nurture their relationships,” said Sabrina Wiewel, Hallmark’s general manager for the drug channel.

Dave Phipps, a spokesman for Avanti Press, said the company has been driving higher profits with premium collections priced at $3.99. The average price point of Avanti cards is $2.99.

The company’s Motion line, which features lenticular 3-D effects, and its Standouts line, featuring dimensional photographic interiors, have been very successful.

The article above is part of the DSN Category Review Series. For the complete Greeting Cards Buy-In Report, click here.