It always amazes me, as I contemplate what has gone on in the industry over the past 12 months, how little has changed and how little I think will change over the next 12 months and beyond. The greeting card industry historically has experienced very slow unit growth -- 2 to 4 percent from the end of World War II to the mid-1980s and 1 to 3 percent since -- a rate of growth I think will continue until about 2015. With this slow rate of growth, the industry is not really in a position to -- nor does it need -- change all that rapidly. Having said that, here's what I see as trends in the greeting card industry.
The business of greeting cards
I am basically upbeat on the industry! On the plus side, the economy continues to improve. As a result, there should be a modest acceleration in the card business in 1995 and that should translate into better results at all levels of the industry. Also, while there is not a lot "new" within the industry, there are some developing trends that should also help business. None, save the increased importance of computers, will rock the industry. Each one, however, indicates that card companies continue to respond to consumer needs.
As was the case last year, today's biggest negative continues to be the constant erosion in the ranks of smaller retailers. When I started to track the industry, it was estimated that as much as 40 percent of all cards were sold through gift/card shops; today, I estimate that this figure is probably less than 30 percent. An example of this problem is a recent Hallmark agreement to let Hallmark branded product be carried by a major drug chain with stores in close proximity to Hallmark shops. When Hallmark finds it necessary to take such a step, it is clear that gift/card retailers will continue to be under considerable pressure. And while not totally displaced, at least reduced in importance.
About the cards
As is always the case, I cannot ignore the impact personalization is having on the industry. It should be a part of any expansion retailers are planning, especially as new products are added. The fact that one card company is even testing putting its designs on Internet should be a strong indication of where the use of computers is going in the industry. The advent of computer-generated cards, which has increased male usage -- twice as many men buy cards at computer kiosks than at traditional outlets -- has resulted in more cards with masculine themes emerging from traditional publishers. As men become more comfortable buying cards, more traditional outlets should benefit.
Beyond this, green marketing is gaining: recycling and cards that support environmental causes are becoming increasingly important. Handmade cards, never a big part of the business, are increasing their share of market simply because consumers are looking for the new, the unique and the more personal. Ethnic cards are now big business and getting bigger all the time. This is another part of the market that has to be addressed, regardless of where a store is located. There is also the progressive card -- beyond alternative; the card that speaks openly and frankly about such subjects as sexual orientation, divorce, terminal illness and breakups. These issues are addressed more directly than they have been in the past.
Finally, from a distribution standpoint, there is the expanding universe of master distributors, companies that can take a small card company's product into the major retail chains as part of an overall program. Just another of the challenges facing today's card and gift retailers!
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