Titans grapple for dominance; consumers very willing to buy any brand - greeting cards - Power Brands

Discount Store News, Oct 16, 1995

Hallmark was the consumers' choice in greeting cards, according to DSN's exclusive Power Brands research. There's just one catch: the brand is not available in the mass channel. But this manufacturer is bent on gaining market share from discounters' overwelming favorite, American Greetings.

Hallmark, the country's largest card maker, joined forces in 1995 with its mass channel subsidiary Ambassador to create a party goods line called Party Express, available at the discount store level.

Not long after, Power Brand American Greetings began its quest to acquire Cincinnati-based Gibson Greetings. If AG can skirt anti-trust issues (the company owns about 30% of the nation's market share; Gibson, 10%) it seems that little will deter the Cleveland-based giant from a takeover and perhaps a more commanding lead in greeting cards at discount.

In addition, ethnic greeting card lines directed at African American and Hispanic groups are on the rise as are shifts in the number and location of greeting card kiosks at store level.

Recently, Hallmark said that it would pull many of its card kiosks from stores due to lack of performance. This leaves AG with its CreataCard program firmly in the lead. Sangamon was expected to introduce its kiosk program this year, but there has been no word on its rollout.

More than three-quarters (78%) of consumers surveyed said that they have a brand preference in greeting cards and their choice is Hallmark. Hallmark captured 75% of consumers with a brand preference even though Hallmark cards are not sold at discount. Hallmark's most loyal consumers are Baby Busters, with nearly 85% mentioning it as a preferred brand.

AG appealed to all ages consistently, with a mention rate of about one out of six shoppers but one out of five mentions by Target shoppers.

Despite their preferences, consumer loyalty is in short supply. About three-quarters (74%) of all shoppers said that they were willing to switch to another brand of greeting cards if their preferred brand were unavailable. This is good news to retailers considering that each discount store usually only offers one brand of greeting cards. It also offers retailers the chance to try private label merchandise. In fact, eight of out 10 consumers (78%) surveyed said they'd give private label offerings a shot, up from 73% one year ago.

Regardless of consumer willingness to try private label greeting cards, the business is dominated by brands: Hallmark and American Greetings (according to consumer responses), and AG and Ambassador (based on retailer responses for top-performing brands). As dominant as Hallmark was with consumers, AG was nearly as dominant with retailers.

AG and Ambassador were the No. 1 and No. 2 top performers by retailers, respectively, everywhere except at Kmart, where Sangamon was No. 2.

By generation, the Baby Busters were the least responsive to Hallmark's reach. Seven out of 10 Baby Busters mentioned Hallmark as a preferred brand, compared to 79% of Baby Boomers and 76% of Empty Nesters. Only one in 10 Baby Busters named Hallmark's discount store brand Ambassador as a preferred brand. AG was second to all groups, and Shoe Box was third.

Retailers' best
performing brands
  All Discounters
Brand                   1995      1994
American Greetings       64%       60%
Ambassador               26        34
Gibson                    7         5
Sangamon                  3         3
Hallmark                  3         6
Recycled Paper Products   1         4
% of tota mentions as a top-performing brand.
Source: DSN/Leo J. Shapiro & Associates, July 1995
Consumers' most
preferred brands
  All Discount Store Shoppers
Brand                   1995      1994
Hallmark                 75%       79%
American Greetings       16        16
Shoe Box                  6         4
Ambassador                2         1
Forget Me Not             1         1
Gibson                    1         1
Sangamon                  1         1
Empire                    1         -
% of total mentions as a
preferred brand.
Source: DSN/Leo J. Shapiro
& Associates, July 1995