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Many Happy Returns: Is the Greetings Card Industry Back in Business?

While many have seen Facebook, in particular, as the Nemesis of the posted greetings card industry, a number of exhibitors at New York's National Stationery Show credited social media with giving the sector a whole new lease of life.

Photo: Unconventionally conventional: Augmented reality greetings cards from iGreet.
Unconventionally conventional: Augmented reality greetings cards from iGreet.
Photo: Unconventionally conventional: Augmented reality greetings cards from iGreet.
Unconventionally conventional: Augmented reality greetings cards from iGreet.

With the rise, rise, and rise of social media having seemingly consigned conventional ink-on-paper communications to being solely an occasional indulgence on the part of the overly quaint, it could be expected that the New York National Stationery Show (NSS) might be more of a wake than an expo.

Many of the experts attending this year's event, however, would beg to differ. Far from sounding the death knell of traditional communication tools, they suggest the expanded social interaction – as well as the process of reconnecting with friends and family – facilitated by online communications has had something of a knock-on effect to the world of greetings cards and other conventionally mailed dispatches.

With the event dominated by the lucrative greetings cards industry, a number of exhibitors were keen to highlight just how the sector has benefitted from the increasingly sociable nature of consumers, a factor they attribute to the impact of the internet and electronic media. At the same time, other factors have also begun to make an impact on the industry. There is now a greater emphasis on discounted and premium greetings cards, for instance, while dedicated stationery retailers are under pressure from the level of card sales in more generalist stores.

New Jersey-based Designer Greetings is the US's third largest manufacturer of greetings cards. Assessing the evolving role of the industry, Jimmy Balestrieri, the company's Senior Vice-President for Sales said: "Social media has changed the greetings cards sector in a fundamental way. A lot of people say it's a bad thing that people now say 'happy birthday' via Facebook rather than by sending a card.

"It has, however, also had an effect in a different way. It's put people in touch with many individuals they had lost touch with. This means they might now post a card at Christmas or send a sympathy message or congratulations on a new baby. While a lot of birthday wishes are now sent by social media, the number of people who have reconnected online has actually helped the greetings cards sector."

Kansa City-headquartered Hallmark, the market leading card manufacturer, also sees new media as having had a major impact. Ken Christian, the company's Regional Market Development Manager, said: "I think in the case of all businesses, not just greetings cards, the internet has led people to change their buying behaviour. It is tougher to get consumers into bricks-and-mortar stores, but it's not impossible. We still have a big stake in the offline sector, but we have to look at every channel."

Not all exhibitors, however, were quite as positive about the impact of changing technology. Deanne Rogers, a Sales Representative for Embossed Graphics, an Illinois-based stationery brand, said: "In the case of our retailers, their concern is that they spend time with customers, then those same customers go online and try to find a better deal."

A manufacturer of high-end embossed stationery, Embossed Graphics has responded to this challenge by providing retailers with 'touchy feely' point of sales material, hoping to better engage with customers. Rogers said: "As we put physical samples out there, we can find out just what drives customers to order from our stores."

As well as changing how stationery and greetings cards are sold, while also instigating something of a shift with regard to the occasions actually marked by such cards, electronic media has also had an impact on the content provided by the industry. An eye-catching example of this was Auto(in)correct, a text-message themed greetings cards brand based in Ohio. Explaining his company's somewhat unique approach, Chief Executive John Brandt said: "In modern life all of us are texting all the time. Inevitably, we sometimes send texts that are wrong, often horrendously misspelled or simple funny.

"Earlier today, someone told me of an occasion when she sent a text to a friend whose dog was going into surgery. She accidentally texted: 'I hope your dog dies', having obviously intended to share her hope that the dog doesn't die.

"We came up with the idea of making cards like that. Each one is based on a series of texts that have gone horrendously wrong."

While texting is seen as a particular predilection of younger consumers, Brandt believes that all ages can enjoy such offbeat humour. He said: "We see it as suitable for everyone. The fastest growing group of people on Facebook, for instance, are baby boomers."

Photo: Hallmark: Still the market leader.
Hallmark: Still the market leader.
Photo: Hallmark: Still the market leader.
Hallmark: Still the market leader.
Photo: Auto(in)correct: SMS-themed cards.
Auto(in)correct: SMS-themed cards.
Photo: Auto(in)correct: SMS-themed cards.
Auto(in)correct: SMS-themed cards.

Another company influenced by digital technology is iGreet, a Bulgarian producer of augmented reality greetings cards. Explaining his company's approach, Chief Executive Vicho Dimitov said: "After downloading our app from the App Store or Google Play, you just press scan and then you can enjoy the animation on the card you have received.

"We launched in September and we have received very positive feedback to date. We will expand into Germany this year and then we are hoping to move into the US at a later date. So far, people seem to really like our cards. When they see what the system can do, they really enjoy it."

With more work going into producing an augmented reality card, its added value inevitably requires premium pricing. Justifying the relatively high unit cost, Dimitov said: "There is a lot of work that has gone into developing the technology. We then have to design the cards and the animations. That's why we price them a little bit higher than regular cards."

Tellingly, even the handcrafted, premium end of the market is now embracing modern technology. Elizabeth Grant, Creative Director of Card Happening, a Texas-based handmade card company, said: "I create hand-painted cards. Each and every one is original and one-of-a-kind. For example, our Majestic Unicorn range shares the same colour palette, but no two are the same.

"I'll paint large sheets and then we laser cut them, from original hand-drawn designs. The Unicorns are by far our best sellers."

In terms of other challenges, traditional bricks-and-mortar specialist card retailers are also facing pressure from the more generalist stores, many of whom are now devoting an increased amount of shelf space to greetings card displays and, consequently, selling higher volumes at lower rates.

Highlighting this change, Balestrieri said: "It is a US$7 billion industry and the number of units you're selling are still there, it's just that the channels are different. Cards are now sold through supermarkets, and there's thousands and thousands of CVS and Walgreens drugstores carrying the whole range of Hallmark cards. We didn't have that 10 or 15 years ago.

"In order to combat that, there are now lots of half-price offerings and a lot of dollar store offerings. The biggest growth in the industry is the dollar store market. With the dollar store, you're making less, but you're selling a lot more."

Hallmark, for one, was actively looking to move into non-traditional card retailers and launched a new programme with this in mind at this year's event. Christian said: "Our objective is to help retailers who have another business add a Hallmark department to their store. It benefits the retailers by adding traffic, and helps us get distribution in places where we normally couldn't."

A number of exhibitors also noted differences in the pattern of greetings card and stationery purchases across the US. Christian said: "In the northeast it is heavily greetings card country. Our customers in that area are the grandmothers who give cards to every grandchild – they never forget anybody's birthday and they always send cards for all the holidays.

"As you move around the country that changes. It's pretty strong in the south, but not as strong as the northeast. The further west you go, the secondary occasions become less and less important. The primary occasions always there – the wife, the girlfriend, your kid – but the nieces, nephews and cousins are less important.

"Retailers handle this by balancing their mix. In the northeast you're going to find a higher percentage of greetings cards. Out in the west, you're going to find a higher percentage of gifts and other specialty products."

Rogers of Embossed Graphics also highlighted the rather more traditional tastes found in the southern US states. She said: "We do big business across the US, working with a lot of retailers in many different states. Generally speaking, though, we do better in the south, just because handwritten letters are more prevalent there."

Photo: Freaking majestic: Handmade greetings from Card Happenings.
Freaking majestic: Handmade greetings from Card Happenings.
Photo: Freaking majestic: Handmade greetings from Card Happenings.
Freaking majestic: Handmade greetings from Card Happenings.

The National Stationery Show 2016 was held at New York City's Jacob K Javits Center from 15-18 May. The event featured around 800 exhibiting companies and attracted some 10,000 visitors.

James O'Donnell, Special Correspondent, New York

Content provided by Picture: HKTDC Research
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