New cards alter discount convention

Discount Store News, August 24, 1998 by Mike Troy

The classification of cards broadly referred to as "alternative" are widely credited with providing growth in a $7.1 billion category where sales would otherwise be flat. However, alternative cards can be defined many different ways by both manufacturers and consumers.

Generally, the term "alternative" is used to describe cards that offer offbeat humor or inspirational messages. Alternative cards can appeal to a specific age or interest group; they don't contain content tied to a special occasion such as Valentine's Day; and generally they relay a more casual way of communicating.

Regardless of the definition, understanding why alternative cards have become popular is easy. Greeting card customers lead complicated lives. Family structures, relationships and the pressures people face have changed, which in turn influences how they communicate. In response to the trend, greeting card companies have had to revamp their card offerings to provide art and verse that let people communicate differently.

The challenge for retailers, especially discount stores, is deciding how alternative to be. If an alternative card is too alternative, its limited appeal could result in an unproductive use of space.

However, it seems clear that at the very least discount stores have to experiment with product lines on the forward edge of what is considered alternative, or they risk losing out on sales to retail venues more willing to push the alternative envelope.

Judging from the limited data available and the wider distribution of cards, that may already be happening. While specialty formats such as Factory Card Outlet and relative newcomer Card$mart are taking a category killer approach to the market, other specialty retail segments are using card sections to build incremental sales.

To combat the influx of retail competition, many of whom benefit from the trend toward alternative cards, discount stores have distinct advantages. Since many greeting card purchases are unplanned, discount stores take full advantage of the high customer counts by prominently featuring cards near the front of the store to guarantee maximum exposure. The resources of the nation's two largest greeting card companies also helps. Both Hallmark and American Greetings have become more aggressive in offering retailers the type of cutting edge cards which allow customers to express themselves in new ways.

American Greetings' "All New American Way" initiative announced earlier this year saw the company redesign about 80% of its cards. The alternative segment was a major area of focus, with new lines and merchandising vehicles introduced. The company identified nine lifestyle trends impacting the communication needs of consumers and developed products to meet their needs. Some of the trends identified included a return to spirituality, cultural diversity, an impersonal world and new family dynamics.

"Our new alternative card merchandising options offer a broader variety of programs to meet more consumer needs in the same amount of space," said Steve Laserson, executive director of everyday cards.

At Hallmark, Lee Koch, business manager of everyday cards, alternatives and promotables, said the challenge with developing alternative cards is to make sure they will be productive in the mass retail environment.

Another way the alternative trend is influencing the card business is the speed with which manufacturers develop new lines and the trickle down effect to conventional cards.

Hallmark, under its Expressions from Hallmark brand, created 10 alternative card lines for its 1998 Summer Flex Alternatives program. According to Koch, if particular cards work well in an alternative line, artistic components and verse can find its way into conventional cards.

The competition for greeting card customers is stronger than ever and despite the efforts of its suppliers, discount stores find themselves in a predicament. The retail channel is as mainstream as it gets, so the prospect of alternative cards seems an oxymoron. For a card to meet productivity standards in a discount store it has to have broad appeal, which conflicts with the whole concept of alternative. That's where the issue of defining alternative comes in.

"Part of what being alternative means is just being new," according to Georg White, general manager of Bullseye Productions, the Gibson division focused on alternative cards.