Winter 2007
Carding Home the Profits By Randall Mielke

A Place for Cards

In an age of instant messaging, email and cell phones, is there still place for greeting cards? Retailers and vendors answer yes. They see positive signs that the greeting card industry is flourishing.

“Greeting card sales have not slowed down at all,” says Heather Wolfson, owner of Inspirations Unique Gift Gallery in Virginia Beach, VA. “In fact, they have increased. I am about 6 percent up in card sales from last year.”

At Wolfson’s store, which features such things as crystal, jewelry and fine art by local artists, greeting cards account for about 15 percent of business. “Certain lines do better than others,” she says. “Avanti Press cards sell like crazy because I carry their pet and dog card [lines]. Also, they are moderately priced.”

Faces, in Northampton, MA—a family-owned store that offers gifts, women’s fashions, home accessories and toys—gets about 10 percent of its sales from greeting cards.

“Probably over the last two years, sales have been up 5 to 10 percent,” says Steven Wardlaw, a buyer for Faces. “I attribute it to the fact that we consistently make a conscious effort to bring in new lines.”

Dave Phipps, communications manager for Detroit-based Avanti Press, has also witnessed sales increase. “Our company has seen consistent growth over the last 25 years,” Phipps says. “The industry is strong, especially in the unique markets that we go to.”

Split Ends

George White, president of Up With Paper, a manufacturer of pop-up greeting cards located in Mason, OH, sees the industry growing at only the ends of the spectrum. “Greeting card sales are increasing at the higher end and the lower end,” says White, whose company focuses on the high-end greeting cards. “The handmade cards and those that are $5 and up are doing well, and those available at Dollar Tree, two for $1, are selling. There is contraction in the middle.”

“Those with money [like the baby boomers segment] want more bells and whistles, so there is high-end growth. Those without money buy at the low end.”

Barbara Miller, spokeswoman for the Greeting Card Association, a Washington, D.C.-based trade organization for publishers of greeting cards and stationery, agrees with White’s assessment. “Over the last five or six years there has been a surge in sales in high-end cards and in low-end cards,” Miller says. “We see growth in the low-priced, mass-merchandising store. On the high end it is due to the specialty cards and the more sophisticated looks.” She says the greeting card industry in the United States has been averaging about $7.5 billion in annual sales, and that that number is expected to hold steady.

Tally Oliveau, owner of Papier Studio, a card design company in Woodland Hills, CA, has seen an increased demand for her high-end product. “My $10 cards are my best sellers,” Oliveau says. “People will buy my cards if they are looking for a special or unique way to express themselves.”

Higher-end Profits

In its 2005 report, “Greeting Card, Stationery, Party and Gift Wrap Accessories and Paper Crafting Market,” Unity Marketing, a consumer-research firm in Stevens, PA, found a decline in retail sales of greeting cards in the United States between 2002 and 2004. The survey cited figures (which differ from the Greeting Card Association’s estimates) totaling $10.7 billion in sales of greeting cards in 2002, and $10.3 billion in 2004, a decline of about 3.9 percent.

“With technical innovations like email, text messaging and e-cards, the greeting card’s time has come and gone,” says Pamela Danziger, president of Unity Marketing. In response, according to Danziger, the industry is tweaking cards and gearing them to a higher-priced market.

Danziger, who is the author of several books on consumer behavior, including her latest, Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience, believes that new technology means trouble for the greeting card industry. “Greeting cards were an Industrial Age solution,” Danziger says. “We have come a long way since then. With today’s computer technology, people make their own cards with pictures. They can create a one-of-a-kind card.” Trouble from technology?

While it is true that email, text messaging, e-cards and other electronic methods of communication have given Americans new ways to keep in touch with friends and family, most industry experts do not see the new technology replacing greeting cards. “We have this discussion with our staff on a monthly basis,” says Wardlaw, of the Faces store. “We expect to see a decline in sales with how quickly people can communicate nowadays, but it hasn’t happened yet.”

According to Miller, electronic messages and greeting cards are distinct mediums. “With an e-greeting, the sender and receiver know that it is transient,” Miller says. “Paper-based cards have a keepsake value. One does not substitute for the other.”

Phipps also sees more merit in a paper product: “If you want to send something that’s meaningful, it must be paper. It is rude to send an e-card on a 50th birthday. If you send an e-card to your wife on your anniversary, you will be in the doghouse.”

Le Vu, owner and designer of Paper Ink Studio, in San Francisco, believes there will always be a market for a written card. “People like to send them and people like to receive them,” says Vu. “I suppose for people who are real busy an e-card is OK, but I don’t think that we will ever see greeting cards completely go away.”

Holly Herring, a buyer for Robin’s Egg Blue in Western Springs, IL—a store that offers home accessories, linens, antique furniture, unique lighting and greeting cards—thinks that the products have to be outstanding to compete with new technologies. “People like to get tactile things,” she says. “They like getting something in the mail other than bills. When they get a thank-you card or a fancy social invite, they appreciate it. I think that our cards are so beautiful that when people see them they buy them anyway, even if they do send email messages.”

On An Impulse

Customers seeing the product is an important part of sales, especially when it comes to impulse buying. “We are rooted in impulse,” Avanti’s Phipps says. “Our images catch the eye and our verses are to the point. It only takes a second to identify with our cards.”

Anahata Katkin—who with her mother, Gina, co-owns the greeting card design company Papaya, in Ashland, OR—agrees. “I think our cards are more impulse-based,” Katkin says. “If customers like the artwork and message of a card, they buy it and think of [an] application for it later.”

But the Unity Marketing survey challenges the idea that greeting card buyers act on impulse. According to the survey, consumers are sensitive to price points in the greeting card market. More consumers are viewing the price paid for the card and the wrapping paper as part of the overall price of a gift, and sometimes planning to spend less on a card.

“We heard that people included the price of a card with the cost of the gift and cost of the gift wrap,” Danziger says. “Sometimes they reject the expensive cards. They believe that $5 extra for a card on a $20 gift is too much.”

Other industry leaders see a balance between the planner and the impulse buyers. “I think the impulse buying on the specialty sale side for greeting cards is less than it is for the mass market,” says White, from Up With Paper. “In some cases it is the greeting cards that are bringing people into the store.”

Vu falls on the planning side. “I am a person who plans out the entire look—the gift, the wrapping, the card,” she says. “I know of others who just pick up the card at the check-out counter. Retailers know that they should display cards at the counter.”

Wolfson’s Inspirations Unique Gift Gallery does just that. “At the cash register, we have a ‘Card of the Month’ that highlights a specific card,” Wolfson says. “That draws more attention to it.”

Display Tips

Drawing attention to specific cards is one way to attract customers, according to Vu. “Personally, I think it’s great to display an artist’s work as a group,” she says. “That way you do not have to search everywhere in the store for items by the same designer.”

Wardlaw says the Hugz brand of greeting cards, from Idols & Friends in New York City, is an example of a line that needs to be displayed. The Hugz feature long arms that come off each card to form an embrace. They are packaged in capsule-like cylinders.

Peter Connors, founder and managing partner of Hugz, offers some display ideas: “A box of Hugz with a sample card on top works in a situation where there is a lot of counter space, or a table. But our best-selling retailer does not use a box. He puts them in a basket with a sign they made that says, ‘These cards hug you.'”

“If the cards are not forward-facing, you are in trouble,” says Katkin. “Being able to see the product clearly is super-important.”

Herring, from Robin’s Egg Blue, displays her cards in several ways. They are displayed with books, and sometimes the greeting cards are sorted by colors. “We will set up little vignettes,” she says. “We will show vintage pottery with cards in them.”

Cross-merchandising is another way to display greeting cards, and possibly increase profits.

“We suggest cross-merchandising Hugz with little gifts,” Connors says. “We know from a balloon retailer that one Hugz card and capsule will hold down four helium balloons. Some retailers add gifts inside the capsule, like jewelry or candy. The retailers who do that can price them higher.”

What Tomorrow Brings

Education may be key to the future of greeting cards. “As the kids today who are using emails and other messaging devices get older, there will not be card buyers like we have today,” Wardlaw says.

Phipps sees a similar pattern emerging. “What the whole greeting card industry should be doing is cultivating kids in the habit of sending cards,” he says. “If not, 20 years from now we will see a drop-off in card sending.”

One way Avanti cultivates the habit of sending greeting cards is by donating cards to the three campuses of the Children’s Home of Detroit, which provides specialized social services for children. “We supply the children with cards—our outdated inventory—so they have cards to use,” Phipps says. “The staff there encourages the kids to write Christmas cards and birthday cards.”

Avanti also donates cards to the Ferber Kaufman Life Town, an organization that runs after school programs in West Bloomfield, MI, for special needs children. “At this facility, kids learn to do things like run a store,” Phipps says. “They learn to run a business on a small scale. [With our donations] the kids are able to include greeting cards in the product mix [that they pretend to sell].” Phipps thinks creating products that appeal to younger people helps keep the greeting card tradition alive.

“We have to ask kids what they want, offer items that speak their language,” he says. “They may not have the same, sentimental ways of saying things.”

“We are exploring how to do that now,” he says. “We have focus groups and we are trying to learn what they want.”

White believes specialty retail establishments can market high-end greeting cards effectively.

“Specialty stores can sell items at a higher price,” he says. “Shoppers have made a conscious decision to go into a specialty store to find better products.”

Herring also believes that customers are willing to pay more for a quality item. “People in our store who purchase cards from $4 to $6 do not experience sticker shock,” she says. “They are used to paying it.”

Specialty shops that sell high-end greeting cards and reap the rewards may be sending the message to other retailers: “Wish you were here.”

Randall Mielke

Mielke is a freelancer who writes about retail, business and economic development for a variety of publications.

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