It's a wrap in stationery - book on it; gift wrap, greeting cards, party supplies and books are adding value to and dressing up the stationery category - Regionals

Discount Store News, August 15, 1994

"Value" is the message regionals are trying to impart with their stationery categories.

By adding value, particularly into such highly profitable parts of the stationery business as greeting cards and party supplies, regionals can offset the commodity aspects of the traditional Back-to-School items--which many mass retailers are paring--and office products assortments. For some chains, such moves are breathing new life into a once staid area of the store.

"By providing party centers, kits, party planners... and offering wider variety, regional chains can differentiate themselves," against WalMart, said American Greeting's director of advertising Tom Traynor.

Ames has received the message. The Rocky Hill, Conn.-based discounter recently unveiled an 80-linear-foot party center adjacent to its expansive crafts department.

One 40-ft. Run shelves color-coordinated paper supplies such as napkins, plates, cups and tablecloths, while the facing run carries a vast supply of licensed party goods such as favors, signs and goody bags in a host of hot licenses dominated by Power Rangers, Disney characters and The Lion King. Party favors from Lisa Frank abound as well.

Rose's, another regional that has recognized the importance of the party goods department, plans to include the merchandise in its new superstore concept, which is slated to be 50% apparel.

Jamesway, too, has identified greeting cards and stationery products as a growth category. Merchandised between snacks and toys, greeting cards and stationery products are considered a primary or "core" category for the discounter.

The chain favorably views the merchandise for its high volume and profit potential, strong customer appeal and, equally as important, the opportunity to differentiate itself from national retailers. Since the category is an important one, it is located at the front of the store.

Caldor, one of the few remaining retailers committed to a book department, is featuring a fairly upscale selection of Back-to-School supplies this year, including Nike licensed goods from Mead, and is merchandising the offerings next to books. The department is located on the rear power aisle and makes a big statement for the regional discounter.

In addition, Caldor and others are boutiquing top licenses in an effort to reap big dividends. Power Rangers and Disney's the Lion King are the focus of much of that activity this season.

Also, chains like Caldor and Bradlees have made strong statements by boutiquing Crayola products. Crayons (in units of 8 through 64), markers, pencils, magnets, stamp pads, portable table top desks, drawing kits--one that includes a 30-minute video--are clustered together in a sea of trademark colors orange and blue.

Wrapping paper, in the greeting card area, is also subject to patterns of big-eyed lions, big-eared mice and big-haired Barbie, all pulling in strong margins for the manufacturers and discounters.

Clustering office products for the home around supplies for personal computing is common, too. At ShopKo's latest prototype, desk and personal computer paraphernalia, including disk file boxes, PC tool kits, interface cables, mouse and mouse pads, and floppy discs occupy a 7-ft. section. Price points soar as high a $79.99 for Texas Instruments Graphic Calculators.

Aside from the popularity and sales draw of licenses, department location can be almost everything in stationery products. A recent study by Ambassador Greetings suggested that within a week, 65% of customers entering discount stores have a need for cards, gift wrap or party goods, yet only 15% ever make it to the card department. Of those who do get there, more than 80% exit the store with a card purchase.

Greeting cards and party supplies also carry margins of about 50%, making a front-and-center location ideal.

Pamida doesn't do much with books, but its stationery department is the No. 1 profit maker in dollar volume for the chain, said chairman Steve Fishman. The chain's new prototype stores have moved the department up to the front of the store. "The further forward cards are in the store," said Fishman, "the more business you do in stationery."

Hallmark's Ambassador division is set to take over supply of greeting cards to the entire chain this month.