Greeting Cards Aren’t What They Used to Be
In order for the greeting card industry to survive, the industry is going to need to become more creative. Digital communications and social media are causing disruptions within this industry.
According to Hallmark, their workforce went from 22,000 FTE’s to 10,500 FTEs worldwide from 2010-2015. In the next five years, the downward trend is expected to remain the same, that means losses of 5% every year.
Sales of traditional greeting cards have plummeted in recent years. Greeting card sales have fallen by nearly 30% in dollar terms over the last decade when adjusted for inflation – to an estimated $6.1 billion cards between 2011 and 2013, according to the U.S. Postal Service.
The industry has responded to the digital age with apps that allow consumers to digitally write a message or annual e-card subscriptions for around $1 per month. Including the new Amazon Prints. This move could spell doom for big players in this space like Shutterfly and Snapfish which now have to compete with the e-retail giant Amazon who has a significant advantage. There are well over 50M U.S. Amazon Prime members who can download an unlimited number of photos at no additional cost over their Amazon Prime membership of $99/year.
But here are four occasions that call for a real, signed, non-electronic card:
Wedding anniversary – there’s no worse way to say that you love someone than a hastily composed Facebook message.
Sympathy cards – If someone has a family member who dies the poignancy of a handwritten card cannot be overlooked.
Mother’s Day – She went through hours of labor and nine months of pregnancy, and has given more thought to your wants and needs than anyone on the planet – don’t you think she deserve five minutes to send a proper card?
Spouse/Partner’s birthday – “We are definitely on a collision course with old traditions and current expectations,” Jason Krafsky, who co-founded the advice site The Social Media Couple says. Giving a signed card is imperative. In fact, it’s so easy to cause offense, he also sends his wife a Facebook birthday message, posts a greeting on her Timeline and, as if that weren’t enough, he tweets about it. “Then, I text her and, even after all that, I look her in the eyes and tell her Happy Birthday,” he says. He does, however, stop short of creating a meme and uploading it on Instagram.
Despite this, the issue isn’t just sales. The annual retail sales of greeting cards are estimated to be between $7 to $8 billion in total. However, greeting cards are nowhere as profitable as they used to be due to boxed sets and value packs. Twice as many people who purchase greeting cards say they will increase their purchases in the coming year.
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.
A Shrinking Market Means Shrinking Opportunities
- The global sales of greeting cards is expected to decline to $21B in total by the year 2020.
- Growing postal rates and increasing DIY greeting cards will add to the pressure that e-cards have placed on the industry today.
- Online greeting cards are expected to see 3.8% annualized growth according to IBIS World over the next ten 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.
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. 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 five years.
Although individual cards are dropping in sales, boxed cards remain a strong point for the industry while handmade and 3D greeting cards have experienced a significant surge in growth. Other personalization methods, such as photo greeting cards, are bringing in other businesses like Shutterfly who have not normally been associated with this industry.
What ever happened to the cards that sing to you?
Graphic by Brandon Gaille, CEO of GailleMedia.com