Chains celebrate personalized and niche growth

Drug Store News, March 1, 1993

Family ties and tight gift budgets boost greeting card sales, while personalized cards and niche marketing make the category a drug chain winner for the '90s.

The greeting card category enjoys strong growth, thanks to shoppers who continue to curb gift and travel expenses but buy more cards as a low cost way to stay in touch with family and friends.

For Valentine's Day alone, more than one billion cards were exchanged, according to industry estimates. Drug chains benefit since customers identify drug stores as a greeting card destination.

At Knoxville, Tenn.-based Begley Drug, buyer Gary Sharpton reports a 20 percent category increase in 1992 over 1991, while at Wilsonville, Ore.-based Payless Drug Stores, buyer Pat Pemberton says the chain increased its greeting card footage last year. She also notes that sales in early 1993 already show an improvement over early 1992.

Card manufacturers are devising new forms of social expression. Computer-based personalizing, niche-filling lines and an increase in blank cards all point toward category gains.

Personalizing is "one of the strongest consumer trends emerging in the 1990s," says Hallmark marketing manager Dave Mullin. The "personalizing" trend also drives partnering: The pressure to capture greeting card growth and maximize space means more customized promotions for chains by micromarket or store location.

POS scanning, like the system at Troy, Mich.-based Arbor Drug, quickly identifies greeting card trends and tracks hot SKUs. Arbor executive vp and chief operating officer Markus Ernst explains that the chain's POS system enables it "to get in front of the curve" and he adds that the "No. 1 promotion is always in stock."

Drug chains are also reworking space to offer a better assortment. Begley recently reworked all of its departments, increased its seasonal area and installed new fixtures to maximize card facings. Ernst says, "The amount of space has not changed, but the amount of cards that we are able to show has. It's not in drawers; it's up front."

Extra personal

Alternative cards show strong growth, say buyers. Ernst cites "finite demographics, such as cards designed for a niece's husband. There are more subcategories where people can really zero in." Alternative cards are also growing at Begley, according to Sharpton. Elaine Mattot, buyer at Governeur, N.Y.-based Kinney Drug say the chain does well with alternative cards, especially in its college town markets.

American Greetings recently expanded its large print card line beyond everyday to include all-seasonal offerings. The visually impaired "is an important group of people for the drug store industry," says marketing coordinator Sara Eames, who adds, "that's part of the micromarketing story.

Manufacturers are also finding new ways to cater to the Spanish-speaking market, the largest ethnic growth segment. Recycled's Spanish-language subgroups with different kinds of slang specific to Puerto Rico or Cuba, for example.

AG is fine-tuning its La Flor line, which covers everyday and seasonal cards and party papers. A dozen other foreign language cards are available in seasonal offerings from AG. In addition, this April Gibson will introduce a new African-American family card line to add to its existing ethnic card offerings.

Robo card

More greeting card consumers these days are customizing their cards with the touch of a video screen or by keyboarding a personal message, all for the going rate of around $3.50 per card.

Hallmark has offered its Personalize It! system for the past two years. American Greetings launched its CreataCard in Oct. 1992 and show has over 2,000 installations.

Begley Drug just ordered two CreataCard units, reports Sharpton. Arbor started with 15 CreataCard units and will expand the program through the 132-store chain, reports Ernst, who adds that CreataCard "sends out a beacon that something is happening here."

It could be happening everywhere in a year or two. Recycled Greetings just launched a program with Print a Little Message and Ambassador reportedly plans to roll out its own computer-based unit. Someday consumers may expect to find computers in all full-sized card departments:

Preprinted cards are aiming for the personal touch too, say manufacturers and buyers. Hallmark just introduced its new Windows line to fill what the company calls a "greeting card gap" for simple, direct, personal cards. The line features casual designs in watercolors, pastels and photographs.

Bill White, everyday product manager for Recycled Greetings (formerly Recycled Paper, Inc.) says, "We are seeing that blank cards are on an upswing. We believe this is a trend toward more personalized things." He also thinks the end of the go-go '80s means customers are looking for "softer, more personal cards" like its newly redeveloped California Dreamers line, with "more whimsical photos."

The numbers look good for whimsey such as AG's seasonal displays. In an AG holiday survey, stores with Santa's Workshop reported 10-40 percent increases in seasonal sales, according to Don Marshall, director of Retail Creative Services.