Innovation, technology attract customers
There’s no denying that the proliferation of ecards has been eroding sales of traditional greeting cards. A recent report from Ibis World predicts that industry revenue will decline over the next the five years to 2019 at an annualized rate of 2.4% to $5.4 billion.
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While many consumers find online or mobile apps a convenient way to purchase, the drug store card aisle is still attracting consumers. “It’s important to be wherever the consumer is, whenever she is there,” said Scott Young, VP of strategic relationships and new business development at Hallmark. “When shoppers already in the store can accomplish their greeting card needs in the same trip, particularly if it’s down to the wire on a holiday or celebration, it’s a win for the shopper and the store.”
Making a statement with the category is key and chains are doing that with eye-catching displays and outposting with movable displays that take up minimal space and can boost profits.
Innovative new products are also helping to capture consumers’ attention. “Technology and innovation continues to be a trend in the category,” said Young. Hallmark has an entire team devoted to proprietary and innovative capabilities and technology for greeting cards.
Recent innovations from the company include motion-activated cards, technology-based cards featuring unique gaming capabilities, and light and sound that bring detachable and wearable masks on cards that feature Disney, Marvel and other favorite characters.
Interactive cards, which use LED lights and sound chips, and greeting cards made from recycled materials, help buoy profit margins since consumers show a willingness to pay for higher-priced products that offer a point of difference.
“Traditional cards still comprise the majority of greeting card sales, but specialty cards are important and growing. There is a demand for premium products,” said Suzanne Haines, VP of marketing at Designer Greetings. The company’s upscale, handmade Designer Boutique line includes a card embellished with ribbon, gems and tip-ons, but is still value priced, which Haines sees as another key trend in the category.
On the other end of the price spectrum, the value-priced segment continues to be important to the category. This year, Hallmark is expanding its greetings portfolio with collections of cards to meet the needs of distinct shopper segments, with value being a part of that expansion.
“The value segment is growing in importance and greeting cards are one of the most profitable categories in drug stores, third only after candy, gum and prescriptions,” said Haines. “Designer Greetings pays close attention to the price/value relationship and not only offers retailers a selection of 22,000 cards, but a variety of value programs, including 50% off the published price. These programs have resuscitated many drug stores that had been losing greeting card sales due to full-price programs and limited title selection.”
Other news from Hallmark includes the Mahogany collection, a relaunch with bolder creative and editorial, and Hallmark Sinceramente, a new creative strategy and approach featuring more authentic content for the Latino market.