It’s been said that for the greeting card industry to be able to survive, the industry is going to need to begin becoming more creative. Digital communications are causing disruptions within this industry and let’s face it – the internet isn’t going to go away any time soon.
From 2010-2015, Hallmark slashed its workforce from 22,000 FTEs to 10,500 FTEs worldwide.
If you were a good employee in the greeting card industry, then it was said that you had a job for life. Now that certainty is all but gone. In the next 5 years, the downward trends are expected to remain the same for this industry. That means losses of 5% every year.
The Issue for the Greeting Card Industry Isn’t Sales
- According to the Greeting Card Association, the sales of greeting cards has actually held steady for the last several years. This means about 6.5 billion greeting cards are purchased in the United States every year.
- The annual retail sales of greeting cards is estimated to be between $7 to $8 billion in total.
- As reported by NPR, the issue is that greeting cards are nowhere as profitable as they used to be.
- Part of the issue for the greeting card industry is the fact that numerous companies have flooded the market with digital greetings and delivery systems that can be personalized, but without much profit associated to them.
- According to Sarah Turk, who is an analyst with IBIS World, the online portion of the greeting card industry isn’t lucrative enough to offset the weaker sales that are seen in stores.
- Christmas cards are the most popular seasonal cards for the greeting card industry, with 1.6 billion purchased each year. Valentine’s Day and Mother’s Day see more than 100 million cards sold.
- Women purchase an estimated 80% of all greeting cards. Women spend more time choosing a card than men, and are more likely to buy several cards at once.
- Greeting card prices can vary from 50 cents to $10 – with a price point for every consumer. The cost of a typical counter card, however, is between $2 and $4.
- Cards featuring special techniques, intricate designs and new technologies and innovations – such as the inclusion of sound chips and LED lights – as well as handmade cards, are at the top of the price scale.
- 70% of people who purchase greeting cards say that having them is either absolutely essential or almost essential to how they communicate with others.
- Twice as many people who purchase greeting cards say that they will increase their purchases in the coming year compared to those who are decreasing their purchasing levels.
- According to data from Hoover’s, almost 100% of the revenues for the US greeting card industry come from the top 50 companies in this category.
Here’s the hidden data within these key points. If twice as many people plan to purchase cards next year, but the industry itself is expecting a 5% decrease, then the customers the industry is losing are its biggest spenders. Add in the fact that Millennials are the most tech-savvy generation to date and the potential for growth becomes even more dismal. Birthdays are acknowledged more today than every before, but that’s because people can send a simple message over Facebook instead of sending a greeting card in the mail.
A Shrinking Market Means Shrinking Opportunities
- The global sales of greeting cards is expected to decline to $21 billion in total by the year 2020.
- Compounded annual growth in greeting card sales in the APAC region are expected to top 3.3% through 2020.
- Growing postal rates and increasing levels of DIY greeting cards will add to the pressure that e-cards have placed on the industry today.
- Greeting cards sold in boxed sets, such as value packs and assorted boxes, comprise about 12.4% of total revenues for the industry.
- 90% of households in the US still purchase greeting cards, with the average household purchasing about 30 per year. Many cards are purchased for special occasions only today instead of providing a method of general correspondence.
- The total value of single cards sold in the UK in 2014 stood at £1.39 billion with 878.8 million single cards being sold in this period. When compared with 2013, value is up 7.77%.
- In the UK, the overall value of everyday card sales stood at £1.057 billion compared to £1.022 billion in 2013, an increase of £34.6m.
- Why is the UK market strong when others are weak? The UK card industry is acknowledged to be ten years ahead of the rest of the world in terms of design.
- The card publishers belonging to the Greeting Card Association also account for nearly 95% of US greeting card industry sales.
- In Australia, just two companies contributed to over 50% of the sales in the industry.
- More than 500 million e-cards are sent each year, with many of them having no cost associated with the card being sent to the individual.
- Online greeting cards are expected to see 3.8% annualized growth according to IBIS World over the next 10 years, but only 2,150 people are currently employed by this sub-component of the greeting card industry.
- Online greeting cards are also expected to see a 7.3% growth rate in the number of companies that are providing this product to consumers over the next decade.
So here’s the issue: the UK is strong, but a majority of sales for the industry occur in the US and that market is weak. What is the UK doing that the US is not doing? For starters, the per capita level of greeting card publishers in the UK is very high. There are over 1,000 publishers currently operating and most of them have 5 FTEs or fewer. There are over 400 members in the Greeting Card Association’s UK branch and over 350 of them are either small or micro-businesses. This allows the industry to meet the personalization needs that the online market current provides for the US market. This is where there is some potential for the industry to grow, but only if it is willing to make changes in the immediate future.
Why There is Hope on the Horizon for the Greeting Card Industry
- Greeting card designers are working to create designs that are more attractive to younger consumers and a positive response has occurred because of it.
- Millennials typically describe themselves with labels like “progressive,” “open,” “fun,” or “casual.” Greeting cards are reflecting these values by offering new cards that are appropriate for the LGBTQI+ community. There are also language changes occurring that make the greeting card more reflective of the actual attitude being expressed.
- This means that the declines in the greeting card industry may be a reflection of the fact that there has been a failure to speak in the voice of the consumer. Changing that may change the expected 5% losses that are anticipated each year for the next 5 years.
- Although individual cards are dropping in sales, boxed cards remain a strong point for the industry. This indicates that outside of customization, consumers are looking for value purchases. Meeting this need may also help to drive sales upward.
- Handmade and 3D greeting cards have experienced a significant surge in growth, but struggle if consumers do not perceive a unique or innovative approach to the card itself.
- This is why companies like LovePop, which raised $23,000 through crowdfunding on Kickstarter, have the chance to do more than just disrupt the greeting card industry. They can transform it into the juggernaut it once was so that the stories of massive layoffs do not have to be the defining stories of the decade for the industry.
- According to Inc., LovePop has seen their revenues grow by more than 10x in 2015 and nothing seems to be slowing them down in 2016. The lessons learned here could change how the greeting card industry approaches customers in the future.
- The average person receives more than 20 greeting cards in a year, about one-third of which are birthday cards.
- Other personalization methods, such as photo greeting cards, are bringing in other businesses like Shutterfly who have not normally been associated with this industry. Their impact is new enough that it cannot be accurately evaluated for long-term influences.
People might communicate by email frequently, use Facebook Messenger, and other online mediums, but nothing is quite like the experience of receiving a greeting card in the mail. There’s a certain prestige which comes when you open up a greeting card that was picked out especially for you. Emails and IMs just don’t bring that same feeling. This is why there will always be some hope on the horizon for the greeting card industry. As long as adaptations can be made to changing consumer preferences, there will be an opportunity for growth.