Supermarket NONFOODS Business: Greetings from a new perspective

Greeting card companies are in the business of practicing what they preach. A card conveys a feeling. It sends a message. It's designed to touch an emotional chord with the recipient, to deliver the right message at the right time. As greeting card makers see the future of their supermarket business, they are trying to do the same thing with customers by building attractive displays and a diverse market for niche cards in an evolving society.

"We need to remind the consumer of her needs as she is walking through the store, using good merchandising and good signage," says Dan Moraczewski, v.p. of supermarkets for Cleveland-based American Greetings. "She has the need; she just hasn't put it on her grocery list."

Adds Wayne Strickland, sales v.p. for Hallmark mass brands, "We focus on product mix, price, captioned displays, ethnicity, and demographic research to build departments that yield outstanding profitability for retailers." Kansas City-based Hallmark's greeting card offerings include the Expressions From Hallmark and Ambassador lines. "The bottom line is that when Hallmark meets consumer needs, retailers are successful," Strickland says.

Meeting those needs is a changing process for greeting card makers. Cultural, social, and demographic changes have altered most aspects of life, and the companies have adjusted.

"Today's culture is a mix of ethnic groups, non-traditional and extended families, work relationships, and several generations—more than in the past due to increased longevity," says Strickland. "Today's consumers feel the pressure of not enough time. They want the right card in a convenient setting, displayed informatively so that the perfect card is easy to find. For them, convenience equals time. They also want value, which includes price, convenience, quality, and brand."

That creates opportunities for new merchandising approaches and new ways to push the message to customers. "The traditional supermarkets have most been affected by the supercenters, but we're certainly still focused on supermarkets. We see good potential to grow that business," says Moraczewski. "The supermarket customer is coming in about 2.5 times a week, but we're only getting card purchases about 3.8 times a year, and she purchases two cards on each trip. So our potential to grow the category is there.

"As we talk to supermarket people, we talk to them about featuring greeting cards in their ads. There are a lot of supermarkets where shoppers shop strictly off of the shopper ad. If greetings cards aren't in there, it's not on the top of their mind. We're also doing more outposting, meeting the shopper where she is—putting pet cards in the pet aisle, baby cards in the baby aisle."

Name recognition

There have been a number of licensing agreements between card companies and major figures in publishing and entertainment that are designed to attract the attention of card shoppers in new ways. American Greetings has built a strong licensing deal with Nickelodeon, the king of kids' TV programming.

Licensing deals with Nickelodeon program characters such as Jimmy Neutron, Dora the Explorer, and SpongeBob Squarepants have a strong impact on the kids' market and carry over into the party supply area.

"Licensing is very strong now," Moraczewski says. "We've got a strong relationship with Nickelodeon. We're not really focused on the movie market, but more on the TV market." Jimmy Neutron, which was nominated for an Academy Award as a movie, will open as a TV series this fall on Nickelodeon.

Hallmark has a number of lines with licensed names. One, from poet laureate Maya Angelou, is called Life Mosaic and includes more than 100 everyday cards and specialty items.

"One of the strongest areas is religious and inspirational," Moraczewski says. "We've come out with a new card line called In His Name. It features Bible quotes in a variety of art looks." American Greetings has also licensed the popular Chicken Soup for the Soul books for a greeting card line.

Expressions from Hallmark and Ambassador both offer collections ranging from the DaySpring line of religious cards to casual, contemporary collections such as Glad Mornings and Joyfully Yours Fresh Faith. A Hallmark en Espanol collection called Caminos al Alma (Pathways to the Soul) offers 52 culturally relevant designs for a variety of situations and occasions for the Latino market.

And at the other end of the spectrum, there's humor.

The strongest emotion greeting cards seem to generate is laughter. A funny card from a friend or relative can be the difference between a good day and a bad one, and greeting card companies try to stretch the funny bone as far as they can.

American Greetings created the Twisted Whiskers line, with oddly formed pets making a strong and funny visual statement. They've been a quick hit with consumers. "In a Fred Meyer store, we cleaned out two feet of cards in three weeks," says Moraczewski.

Hallmark's humorous greetings "are choices that allow retailers to expand their offerings while adding freshness and excitement to the card department," says Strickland. They also maintain the commitment to a diverse card offering, as Hallmark's three ethnic lines, Mahogany, Tree of Life, and Hallmark en Espanol (for African-American, Jewish, and Latino consumers) include humor selections within them.

Cultural and social changes have impacted card offerings. "Captions for stepfamily members and blended families reflect today's lifestyles. Cards for relationships with co-workers mirror today's workplace," says Strickland. "Designs for twins, apology, chronic illness, 100th birthday, second marriage, bon voyage, parents-to-be, good luck, ordination, and encouragement are examples of special captions within the core line."

Building on strengths

Both executives say the changes in the marketplace have affected the way cards are seen, and that an initiative needs to take place to freshen that look among retailers and consumers. "The supermarket market share is flat right now at about 15 percent of the industry. A lot of things have affected that," says Moraczewski. "The departments grew for a number of years, and supermarkets were putting in bigger departments in better locations. That's not happening now."

"Americans have a high need to keep in touch, to mark milestones, to observe traditions—all the things that give meaning to life. This trend has been intensified by events surrounding and following the Sept. 11 attack on America," says Strickland. "Greeting cards are a culturally ingrained way to nurture relationships and they offer a tangible keepsake of special moments."

One trend has been the increase in e-greetings. Both companies have Web-based electronic greeting card sites, but Moraczewski says growth in that area hasn't impacted store cards as dramatically as might be expected.

"There are certain events for which you're not going to send an e-greeting—sympathy and weddings, for example. It does take away some sales, but not as much as people think," he says.

Of greater concern to Moraczewski is improving placement in the shopping mix. In many retail outlets, greeting cards come after the frozen food aisle, and the desire to get ice cream and frozen dinners to checkout before they defrost may take time away from a visit to the card display.