Walmart, CVS can throw cards with cards that the cards fall out of favor
Easter baskets are an indelible part of the holiday, but apart from giving us high sugar, what is their significance? Nathan Rousseau Smith gives us a history lesson.
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Greeting card companies need a sympathy note.
Many people give up cards in favor of digital options or send only fewer cards between big holidays like Christmas and Valentine's Day.
Now, big dealers, including CVS and Walmart, are ready to cut cards, and greeting card companies have closed hundreds of standalone locations.
There are surely encouraging signs in some parts of the business, including premium cards that cost more than $ 10, budget cards that cost less than $ 1 and personal choices.
But Kevin Hourican, president of CVS Pharmacy, told the US today in an interview that the company has too much time spent devoted to greeting cards. He said the dealer, who has around 9,600 places, is shifting more space for health products after deciding that greeting cards are not selling well, using an internal analysis tool.
"More and more people are using text and email and e cards, and fewer people are buying cards, so it would be an area" where the company expects to cut back, Hourican said.
Walmart is "reimagining what we put" in stores, said the company's US CEO Gregory Foran. "Do we really need the amount of linear footage we have in greeting cards?" He said at a conference call earlier this month.
Americans still buy more than six billion cards a year, according to the Greeting Card Association, which did not provide more detailed statistics on industry trends.
But the sale of the greeting card industry falls at an annual rate of 3 percent to 2023, according to market research firm IBISWorld.
And the store room occupied by greeting card stores declined by more than 27 percent from 2013 to 2018, according to the real estate agency CoStar Group.
"One of the major factors affecting technology and social media and the ability to contact people for special occasions through these platforms," says IBISWorld analyst Tanvi Kumar, who has studied the industry. "There is a huge increase in e-cards . "The disturbance boasts through the traditional greeting card industry.
The industry's second largest producer, American Greetings Corp., sold a majority stake in April itself to private equity firm Clayton, Dubilier & Rice, and the company replaced CEO John Beeder in February after just about one year at work, and announced that former CEO Zev Weiss would come back to the top role.
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IBISWorld estimated that US greetings revenues declined by about 16 percent over the past four years. The nd-based company refused to comment on this story.
Industry Sales Manager Hallmark Cards has cut over 1,000 positions in the US over the past five years due to a decline in profits, according to IBISWorld. The company also cuts around 28 percent of retail's square photographs from 2013 to 2018, according to CoStar.
Lindsey Roy, marketing manager and vice president of the Hallmark Greetings business, said that the company has "experienced some of the same general market dynamics", but that the cards are "quite flat" overall.
"Our Hallmark Special Stores have gone down over the years. It's fewer," she said. But "we are definitely at the point where we really feel we can stabilize that trend."
Millennials still buy cards
It's not all bad news for greeting cards.
For example, it is a myth that young people do not buy them.
As a millennium, Elizabeth Flake has penetrated social media not wanting to give up the tactile and personal experience of giving and receiving cards.
"I grew up in a greeting card family – my father is an avid Hallmark shopper, and my grandmother has always been known on holidays and birthdays to show all her cards at the kitchen table," says Flake, a wedding and event planner in Chapel. Hill, North Carolina.
Hallmark's Roy said that resistance to conventional wisdom, millennia as a greeting card as a meaningful alternative to social media interactions.
"In a world that is highly digital and volatile and fast, to have something so unique really stands out, "she said. [19659005] Entrepreneurs, niche card sellers and special players also benefit thousands of years in brief.
" The greatest thing everyone is trying to do is tailor their greeting card to the younger audience, "said IBISWorlds Kumar." They take a more informal tone. They are ironic, more comical. "
Boston-based startup Lovepop has sold more than five million of handmade luxury pop-up cards since its launch in 2014.
Has secured funding from the Shark Tank host Kevin O & # 39; Leary after watching the reality TV show, Lovepop sells 90 percent of their cards directly to consumers online.
And the company also sells cards through 3,000 stores, including its first-time stand-alone store in New York City. Hudson Yards development.
The typical pharmacy greeting card has gone out of favor for one reason, but that doesn't mean the cards go away, says Lovepop's CEO Wambi Rose.
"Consumers are slowly getting tired of that offer and we gives a whole ann a customer experience, he says. "Every Lovelop is laser cut and put together by hand."
The cards usually cost more than $ 10, but the recipients often see them as a memorial to show, he said.
Hallmark, Papyrus, Paper Source and Mother and pop online entrepreneurs at Etsy also benefit from interest in premium cards.
Paper source, which gets about 15 percent of the proceeds from greeting cards, has opened around 50 stores over the past five years for a total of 128. The growth stems from the careful selection of products rather than selling mass-produced goods, CEO Winnie Park said. For example, the company has about 500 suppliers of greeting cards.
"Part of the magic of what we bring to the market is a selection that has been cured that is totally unique," Park said. "I would say that actually almost half of our customer is thousands, and they definitely buy greeting cards."
In the back, some money-bent young people and other price-conscious consumers have been turned off with the increasing cost of cards, which the IBISWorld blamed on rising paper costs and card companies are trying to make up for losses. profit.
"The problem I've gone into in recent years is the price of greeting cards has gone up," Flake said. "I pay $ 6 for a glitter card."
A backlash on expensive cards has helped some dealers.
Hallmark began selling budget-oriented cards at Dollar Tree stores in June, including a 2-for-$ 1 deal. The move led to a double-digit increase in quarterly card sales in the quarter, says Dollar Tree CEO Gary Philbin to investors in November.
Philbin said the company is "extremely pleased" with the partnership.
Seeking connection in a digital age
Still, the industry is still challenged to appeal to digitally oriented consumers.
Engaged couples, for example, are increasingly sending digital storage cards and asking invited to RSVP online for wedding invitations instead of sending cards through the post, Flake said.
"There are many fewer cards and gifts for weddings," she said. "The card and gift table has become smaller and smaller because people choose to send something through an online gift register."
IBISWorlds Kumar said customers also send fewer cards between the three major short breaks: Christmas, Valentine's Day and Mother's Day. Birthday card sales, for example, are still the most popular non-holiday cards, but they fall out of favor among some consumers as they send greetings via Facebook and other digital means.
It has led Hallmark, for example, to respond by introducing a new series of cards under a brand called Just Because. The hope is to encourage people to think of each other with a paper card instead of just sending a text or Facebook message.
"We see a good growth out of these because people just need a little good in their lives," said Hallmark's Roy.
People want to pay for a personal touch, said Lovepop's Rose. That's why the startup gives customers the opportunity to customize a message when they buy Lovepop cards online.
"The underlying human need to connect is as strong as it has ever been," he said.
Follow USA TODAY reporter Nathan Bomey on Twitter @ NathanBomey .
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