Walmart, CVS can reduce the space reserved for greeting cards, because cards fall out of favor

Greeting card companies need a note of sympathy.

Many people are abandoning cards for digital solutions or simply sending fewer cards between major holidays like Christmas and Valentine's Day.

At present, major retailers, including CVS and Walmart, are on the verge of reducing the number of cards and greeting card companies have closed hundreds of stand-alone sites.

Admittedly, there are encouraging signs in some parts of the business, including premium cards costing over $ 10, budget cards costing less than $ 1, and custom options.

But Kevin Hourican, president of CVS Pharmacy, told USA TODAY in an interview that the company had too much space gone for greeting cards. He added that the retailer, which has about 9,600 sites, devotes more space to health products after determining that greeting cards are not selling well, using an internal analysis tool.

"More and more people are using SMS, emails and e-cards, and fewer people are buying cards, so this would be an area" where the company expects a reduction, Hourican said.

Walmart "reinvents what we put" in stores, said US company CEO Gregory Foran. "Do we really need the amount of linear footage we have in greeting cards?", He said during a conference call earlier this month.

Americans still buy more than six billion cards a year, according to the Greeting Card Association, which has not provided more detailed statistics on industry trends.

However, sales of the greeting card business are down 3% on an annualized basis by 2023, according to market research firm IBISWorld.

And sales areas occupied by greeting card stores have declined by more than 27% between 2013 and 2018, according to real estate data firm CoStar Group.

"One of the major factors impacting technology, social media and the ability to contact people for special occasions via these platforms," ​​said Tanvi Kumar, an analyst at IBISWorld, who studied the sector. "There is a sharp increase in electronic cards."

The disturbance is reflected in the traditional greeting card business.

Second largest producer, American Greetings Corp., sold its majority stake in April to private equity firm Clayton, Dubilier & Rice. And the company replaced CEO John Beeder in February after just about a year of work, announcing that former co-CEO, Zev Weiss, would return to the forefront.

IBISWorld has estimated that the business figure of American Greetings has decreased by about 16% over the past four years. The Cleveland-based company declined to comment on this story.

According to IBISWorld, Hallmark Cards, the industry's leading sales force, has cut more than 1,000 jobs in the United States over the last five years due to lower profits. The company also reduced about 28% of its square footage from 2013 to 2018, according to CoStar.

Lindsey Roy, Director of Marketing and Vice President of the Hallmark Greetings division, said the company had "experienced market-like momentum," but the cards were "rather flat".

"Our Hallmark specialty stores have declined over the years. There are fewer, "she said. But "we are really at the point where we feel we can stabilize this trend."

Millennials are still buying cards

This is not bad news for greeting cards.

For example, it is a myth that young people do not buy them.

As a millennium steeped in social media, Elizabeth Flake does not want to give up the tactile and personal experience of giving and receiving cards.

"I grew up in a family of greeting cards. My dad is a Hallmark customer enthusiast and my grandmother has always been renowned for displaying all of his cards on the kitchen table, "said Flake, wedding and event organizer at Chapel. Hill, North Carolina.

Hallmark's Roy said that, contrary to popular belief, the millennium, like greeting cards, was an interesting alternative to interactions on social networks.

"In a highly digital, fleeting and fast world, it's really important to get something that's unique," she said.

Entrepreneurs, niche card sellers and specialized players also benefit from the millennia of interest for cards.

"The most important thing that everyone tries to do is to adapt their greeting cards to young spectators," said Kumar, of IBISWorld. "They take a more casual tone, they are ironic, more comical".

Boston-based startup Lovepop has sold more than five million luxury handmade pop-up cards since its launch in 2014.

After receiving funding from Kevin O'Leary, Shark Tank's host, after taking part in the reality show, Lovepop sells 90% of his cards directly to consumers online.

The company also sells cards in 3,000 outlets, including its first-ever stand-alone store in the Hudson Yards development project in New York.

The typical greeting card of a pharmacy has lost its popularity for any reason, but that does not mean that the cards are disappearing, said Lovepop CEO, Wambi Rose.

"Consumers are starting to get tired of this offer and we are bringing a very different customer experience," he said. "Each Lovelop is laser cut and assembled by hand."

Cards usually cost more than $ 10, but recipients often see them as a souvenir to show, he said.

Hallmark, Papyrus, Paper Source and Etsy's online entrepreneurs are also benefiting from the interest in premium cards.

Paper Source, which derives approximately 15% of its greeting card revenue, has opened about 50 stores in the past five years, for a total of 128. Growth stems from the careful selection of products instead of the sale of cards. 39, mass articles, Winnie Park, CEO said. For example, the company has about 500 greeting card suppliers.

"Part of the magic of what we put on the market is a unique, perfectly organized selection," said Park. "I would say that in fact, almost half of our clientele is made up of millennia and they're definitely buying greeting cards."

On the other hand, some cash – strapped youth and other price – conscious consumers have been upset by the rising cost of cards, which IBISWorld has blamed on rising costs. paper companies and card companies seeking to make up for their losses.

"The problem I've had for a number of years is that the price of greeting cards has increased dramatically," said Flake. "I pay $ 6 for a glittering card."

The reaction against expensive cards has helped some retailers.

Hallmark began selling budget-based cards at Dollar Tree stores in June, including a bid of 2 for $ 1. The move resulted in a double-digit increase in quarterly card sales, Dollar Tree CEO Gary Philbin told investors in November.

Philbin said the company was "extremely satisfied" with this partnership.

Looking for a connection to the digital age

Still, the industry is still struggling to seduce consumers focused on digital.

Engaged couples, for example, send more and more digital backed up cards and invite guests to confirm their online presence at wedding invitations instead of sending cards in the mail, Flake added.

"There are far fewer cards and gifts at weddings," she said. "The table of cards and gifts has become smaller and smaller because people are choosing to send something via an online gift registry."

Mr. Kumar of IBISWorld said that customers also send fewer cards between the three holidays: Christmas, Valentine's Day and Mother's Day. Birthday card sales, for example, are still the most popular cards that are not holidays, but they are losing the favor of some consumers who send their greetings via Facebook and Facebook. other digital means.

This led Hallmark, for example, to react by introducing a new range of cards under a brand called Just Since. The hope is to encourage people to think of each other with a paper card instead of simply sending a text or a Facebook message.

"We are seeing significant growth in these activities because people just need a little bit of good in their lives," said Roy Hallmark.

People will pay for a personal touch, Rose Lovepop said. That's why the start-up offers customers the opportunity to personalize a message when they buy Lovepop cards online.

"The basic human need to connect is as strong as ever," he said.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.

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