GM set to move into high gear; greeting cards and one-time-use cameras will fuel category

Drug Store News, Jan 9, 1995 by Allene Symons

As life gets more high tech with every digital beat of the clock, consumers are spending more in a spirit of give and take--giving more greeting cards and taking more photographs.

For 1995, these two categories are among Drug Store News' picks for greatest growth. Other categories, including stationery, offer select opportunities in 1995.

Photo to go

The photo category is expanding in drug chains thanks to several drivers--growth of one-time-use cameras and installation and upgrading of instore labs, resulting in greater photo department impact.

One-time-use cameras are growing from a still-modest base. It's no surprise that one large chain buyer said he expects double-digit sales growth in one-time-use cameras this year.

Those cameras are consumable, so greater household penetration doesn't lead to a saturated market. For one-time-use cameras, 65.1 percent of purchasers are females, who are likely to be the family's social planners, picking one up for kids' birthday parties and outdoor fun when a camera might get damaged or be forgotten.

Business users are spending more in drug chain photo departments as decorators, real estate agents and sales reps discover that a drug store is a handy place to pick up a camera on the road.

Curiosity is a strong driver of one-time-use cameras. Most households surveyed said they "just wanted to try one" as the reason for this camera purchase, according to the 1993 Photo Marketing Association Consumer Photographic Survey.

This upswing is sure to continue in 1995: Only 20.3 percent of households had used one-time-use cameras in 1993, up from 11.3 percent in 1992, according to the same survey.

The daylight and daylight-with-flash cameras are still the leading formats, but waterproof is also a good performer in obvious markets like Florida and California, as well as in less obvious places like rainy Seattle.

The one-time-use habit is contagious. As more people see others using them and, above all, having fun with these worry-free cameras at parties, on the beach and at weddings, more pictures will be taken.

That means more rolls will be developed, as well as extra prints and enlargements. Most of this business is incremental--those frames wouldn't otherwise have been shot.

Since they are loaded with 35mm film, the negative quality of one-time-use cameras is good for enlargements, and customer satisfaction leads to further photo processing sales.

As a category driver, in-store or one-hour labs deliver more than fast photo processing profit. Drug chains that have recently installed additional or upgraded one-hour labs report increases in film sales and overnight photo processing.

More drug chains are outfitting their high-volume stores with larger one-hour labs from Gretag, Noritsu and Fuji. All these labs have enlargement and stretch (panoramic) print capability.

The in-store lab draws service traffic and gives consumers more reasons than over to shop at a chain drug store while a prescription is filled.

Many messages

Usually showcased in a center-store location, the greeting card selection in drug chains is expanding to fit the nation's demographic wave: an increasing number of elderly consumers, growing baby-boomer families and a more multi-ethnic population.

Drug chains are a good fit for greeting cards, and in 1995 this retail channel is expected to draw a high percentage of the heaviest users--women and older shoppers. As a demographic group, older consumers buy the highest percentage of greeting cards. This segment is likely to shop drug stores more frequently than other mass market channels.

Traditional cards are still the lion's share of the business for standard occasions like birthdays and anniversaries, as well as the top cardsending holidays. The top five are Father's Day (101 million cards sold), Mother's Day (150 million), Easter (160 million), Valentine's Day (1 billion) and Christmas (2.7 billion).

In the past year, some drug chains have reported an increase in boxed Christmas card sales. This growth appears to be the result of more drug chains expanding their greeting card selection to create a destination department. It's a trend expected to continue in 1995.

Greeting card manufacturers are growing the business in partnership with retailers. Replenishment allows adjustment of stock by consumer segment to fit a store's specific market.

Manufacturers of alternative cards are attracting younger shoppers, as well as some older consumers, by creating more card-giving occasions, including new kinds of friendship and encouragement. Some cards celebrate non-traditional occasions from pet birthdays to divorce decree day. This expanding offering is helping people express themselves with funny and even outrageous cards for friends, or cards for tough times or to help someone get through a hurt.

Ethnic cards are another way this category is growing, especially in cards for Hispanics and African-Americans who might otherwise bypass the card department or make fewer card purchases. By understanding social expression for different cultures, card manufacturers are growing business in holidays like the African-American Kwaanza, and are developing lines for Hispanic consumers who like elaborate cards for occasions like Mother's Day when cards are given as a special gift.