Demographic merchandising zeros in on niche card givers

Discount Store News, April 1, 1997 by Mike Troy

Recent initiatives by the largest greeting card companies and the nation's changing demographics are positioning mass outlets for further sales gains. The most significant development is the current rollout of the Expressions from Hallmark program, which, for the first time, enables retailers to capitalize on the brand equity of Hallmark. The program is already in 250 Wal-Mart stores and by yearend will be in most of the Wal-Mart stores that previously carried Hallmark's Ambassador brand, according to a Wal-Mart spokesman.

"The consumer looking for one-stop shopping really would like to find Hallmark quality where she shops," according to Stan Lewis, marketing vp for Hallmark's general merchandise team. Expressions' affiliation with Hallmark is clear from new overhead signage identifying the greeting cards department. Prior to Expressions' launch, Lewis said, Hallmark had a void in the mass market. Even though its Ambassador brand enjoyed wide distribution, it didn't enjoy the instant recognition of the Hallmark name. With Expressions, Hallmark believes it has found a happy medium that allows mass retailers to benefit from an affiliation with the brand name, while preserving the integrity of the Hallmark name for its chain of Gold Crown stores and certain major chain drug accounts.

The company's overall goal is to get to a point where consumers insist on the Hallmark brand. "We already have very high brand awareness and preference levels among consumers. What we are striving for is brand insistence," Lewis said.

One way that goal is being achieved is through the company's Sneak-a-Peek marketing campaign. The brand awareness campaign involved ads resembling the back of a Hallmark greeting card appearing on the back covers of 115 different magazines during 1996. In 1997, the number of magazines will be expanded to 125, according to Lewis.

American Greetings is also working to build its brand equity and recently upgraded its state-of-the-art micromarketing capabilities and consumer data-gathering abilities to maximize sales for its retail accounts. AG combines its proprietary Street Smart Analysis II demographic profile service with retailers-POS data to fine-tune its card mix.

"It's a science," said Michael Kowalczyk, a database marketing manager. "For each store, we are able to look at the competitive situation, natural barriers, demographics, traffic conditions and employment centers, and it enables us to make recommendations for the card department."

Offering two simplified examples, Kowalczyk said that if data reveals a prevalence of young families, the department's mix will reflect more party supplies. A store with an older consumer base that gives cards more frequently will have a larger department and greater assortment of get well cards.

Understanding the varying behaviors of ethnic card givers is also important to maximizing card sales, said AG product manager Jose Martinez. For example, the male to female ratio of card givers among Hispanics is 30% men and 70% women. Among the general population, men only account for 10% of card purchases. Hispanic card-givers are also younger than the general population.

Hispanics and other ethnic markets are growing in importance as their numbers and purchasing power swell. Retailers that don't merchandise the card category to appeal to these consumers are missing out on more than lost card sales, according to Martinez. "The presence of ethnic cards makes a strong statement that the retailer cares about those customers," Martinez said. "If you don't offer the appropriate assortment of ethnic cards, you run the risk of losing sales of products in other categories. The total impact of these consumers is much higher than what we are seeing because they are also buying a lot of non-ethnic cards."

Also, different holidays are of varying importance to ethnic groups. For example, Mother's Day may eventually surpass Christmas among Hispanics as the top card-giving holiday. However, Easter isn't a major Hispanic card-giving event.

The greeting card market is presently valued at about $7 billion. However, growth is forecast as the heavy card-giving older population groups grow and as mass retailers master customize their card assortments to specific markets.