Greeting cards keep pace using varied prices, contemporary themes

Drug Store News, May 17, 1999 by Allene Symons

In a time of changing technology and shifting demographics, greeting cards are changing with the times. The challenge is to keep cards relevant--especially to the younger, wired generation now moving into the workplace and into household formation.

Major greeting card manufacturers continued to pursue the on-line greeting card business last year. Meanwhile, at retail, the greeting card category took advantage of a chance to gain space or change configuration in drug chains. This was due to a window of opportunity provided by store remodeling programs, such as CVS's and Rite Aid's larger stand-alone prototypes and Rite Aid's program of remodeling the three drug chains it acquired in the previous year.

But real estate dedicated to greeting cards must prove productive compared to other categories vying for space--such as convenience foods and nutritionals. This puts pressure on card manufacturers to demonstrate productivity with innovative products, formats, pricing and merchandising concepts. It appears that the pressure increased in 1998.

Overall, the year was soft for greeting cards, with the Greeting Card Association estimating a 3 percent increase in dollar sales in 1998 to around $7.5 billion (an estimated 6.8 billion units) for all channels--a slightly lower increase than the previous year. Some drug chains were more pleased than others. One regional chain, for example, reported an 8 percent same-store increase in dollar sales for the greeting card category in 1998, an increase that this retailer attributed to price inflation.

On the other hand, toward the end of last year, Rite Aid characterized the category as in the doldrums. More recently, Walgreens summed up cards in 1998 as "stagnant over the past year. The category is steady, but nothing exciting is happening," said spokesperson Y vette V enable.

Right pricing?

Some--but not all--drug chains found price resistance to greeting cards, and other mass channels, such as food and mass merchants, also pushed for lower-priced cards in 1998. Hallmark led the way with 99-cent cards, mainly in seasonal, followed by more 99-centcard offers last spring and summer.

In March of this year, Hallmark expanded this concept with the launch of its Warm Wishes 99-cent line, which has a casual style, smaller-sized card and many bright designs. It is backed by an ad campaign with the line, "Why not?" American Greetings added more 99-cent cards through its value program, but so far it has not designated a line for this concept.

The new price tier offers consumers a choice. But for some drug chains this is not a clear-cut advantage. One drug chain category manager said he had mixed feelings. The 99-cent cards are selling briskly at this chain, but this buyer wondered, "if not a 99-cent card, what would they have bought? Would they have bought a $2.25 card?"

The category is not moving totally to under-a-dollar pricing, of course. On the other end of the spectrum, card companies are also offering new kinds of value-added cards or cards-as-gifts which can range from $3.95 to about $5.95. Some occasions, notably Mother's Day and weddings, rack up permium-priced card sales.

Right images?

Greeting card manufacturers scrambled to keep pace with lifestyle changes impacted by innovations in Internet technology, imaging and telecommunications, and from a second baby boom now growing up.

The result was cards with shorter text messages, as well as cards reflecting popular images and off-beat graphics, such as manipulated photos. More non-traditional or alternative cards were available at retail than ever before last year--especially in the growing non-occasion card segment, meaning cards not themed for birthdays, weddings and other milestones.

The emerging generation--called the echo baby boom, some 90 million strong--prompted production of new cards for kids in 1998, such as American Greetings' new version of its Hey, That's Me line of personalized cards for kids, and Hallmark's new To Kids with Love line, also targeted to busy and traveling parents to give to their kids. Hallmark also launched the Shoelaces line of alternative cards for preteens.

Largely for the other end of the age spectrum, Hallmark offered new cards focused on specific caring and caregiving situations to provide comfort and even humor, while American Greetings expanded its Positively line of cards for encouragement and inspiration.

One of the strongest areas in non-occasion alternative cards is those to give from friend to friend. Hallmark introduced its new Circle of Friends line with simple designs and messages. American Greetings added Just Thinking of You, a line with short messages targeted to women.

Besides trying to attract a new and wired younger generation, the greeting card marketplace reflects more cultural diversity than ever before. This adds to the importance of images over words, including those found in popular advertising. A recent example of this approach was the introduction, in January 1999, of American Greetings' Intuitions line--smaller cards, shorter messages and photos and contemporary images with saturated colors, so the cards stand out from the more pastel shades of traditional cards. This line also tested high with males, according to AG.