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Fall 2002 Outside the Envelope

In You’ve Got Mail, rival booksellers Meg Ryan and Tom Hanks get to know each other (or not) entirely via email. But the movie is a remake of The Shop around the Corner (1940), which keyed on letters on real paper tucked into real envelopes, delivered to real mailboxes. Audiences related to the Ryan/Hanks version, which critics and commentators considered a realistic reflection of the paperless age.

But what of the stuff of “real” letters? Is personal stationery a paper dinosaur? Is the handwriting on the proverbial wall? And what’s ahead for specialty retailers who sell it?

e-volution

No doubt about it: fast, cheap and easy wins. And that’s at the heart of email: its ease, immediacy, and no (or low) cost revolutionized personal communication. It’s also at the heart of the stationery industry’s fear: who’s going to go out and buy a birthday card and a stamp when you can click and send one for free? Messaging technology—email, e-cards, instant and text messaging—has added adigital dimension to all kinds of relationships, while stationery sales are stagnant industry-wide. The question, of course, is whether email will continue to erode profits and eventually erase them in the stationery industry.

In an interview with Greeting Card Writer magazine, Devin Glenn, an editor for Hallmark Cards, says there’s no doubt that e-cards in particular are having a negative impact. But she says there are three facts of the matter. First, “traditional print-card sales are in a slight decline across the market.” Second, “e-cards help people remember to send cards more often… for special occasions they’d rather send a permanent, printed card,” whereas e-cards help people keep in touch in between. And third, not everyone has a computer. So while e-cards and other forms of e-messaging are “a factor to watch,” they’re not an immediate threat. Here’s another reason: email doesn’t evoke the pleasant emotion of a handwritten note. A stack of print-outs doesn’t have the romance of love letters tied with ribbons. And many peopledon’tfeel properly “greeted” unless they have a real card and envelope they can hold in their hands.

A more concrete indicator that stationery is alive is that mass merchandisers and chain drugstores and groceries now sell a wider selection of stationery and related products. Those stores wouldn’t have gotten into or expanded the category at this stage of the game if the market were in decline. But they did. The big guns are selling a large, often quite stylish selection of stationery and cards to a paperless society. And that creates a quandary for specialty retailers: Is there room for them in this viable category, or is it better to stay out of it?

Despite stagnant sales, retailers have managed to transform a decline into expansion two ways: by broadening the category, and by marketing stationery products as gifts. Today, the stationery category includes not just cards, traditional stationery and pens, but also calendars, gift wrap and ribbons, blank journals, magnets, scrapbooks and supplies (such as single-sheet papers, “scraps,” transfers and die-cuts), stickers, stamps and “stamping” supplies, picture frames, desk accessories, plush toys, mugs, balloons and party ware. All of it was featured at this year’s National Stationery Show (held each May at the Jacob Javits Center in New York City). So large is the category these days that “it’s hard to get a grip on what the stationery industry is anymore,” says David Leytus, owner of Village Arts Press (Los Angeles), a stationery designer and manufacturer. “We need a new word!”

Survey says?

imageThe range and diversity of products add to sales, of course. Nonetheless, 61 percent of the 300 retailers surveyed by The Research Network and Giftware magazine say that stationery (letter) papers, note cards and greetingcards remain far and away their strongest sellers. Furthermore, most believe that consumers’ use of email and other electronic greetings (e.g., instant messaging) hasn’t affected greeting-card sales. “Retailers find that selling greeting cards is profitable because they can put hundreds of cards in a small space,” says Dean Michaels, president of The Wonderful Card and Poster Company (Grenada Hills, CA), which features original designs by the company’s two artists. “[And] you don’t need to educate the sales staff. Cards sell themselves, they require no maintenance, and they move fairly fast.”

Other top-selling stationery products (in descending order): invitations and imprintables, party goods, journals, desk accessories, calendars, datebooks, scrapbooks, stamps and stickers. Of those surveyed, 34 percent said floral themes are the customer favorite. Other popular themes: nature/wildlife (11 percent), love/inspiration (10 percent), seasonal (7 percent), handcrafted (4 percent), fine art/museum (3 percent), licensed (3 percent), and pets, gardening and gourmet (2 percent each).

Of those who sell greeting cards, 59 percent deal with one, two or three greeting card suppliers. However, because product diversity is so important, 15 percent said they deal with 10 or more suppliers, a sharp increase from the previous year; 14 percent said 4 to 6 suppliers; and 5 percent said 7 to 9 suppliers. Because stationery products are often impulse items, 79 percent said the price point that attracts most consumers is $10 or less. Only 17 percent said shoppers are willing to spend as much as $20.

In the cards

Since the late-19th century, greeting cards are a staple in personal communications. Today, the opportunities for sending them seem limitless—holidays, personal events (birthday, anniversary, etc.), and so much more. According to the Greeting Card Association (GCA; greetingcard.org/gca), “there appear to be cards for every relationship, every occasion, every ethnicity, every age group, every gender and every special interest group,” and cards for no occasion other than expressing feelings or keeping in touch. The GCA cites some “significant changes” in the industry, including an increase in the number of card publishers (now as many as 2,000 in the US), the demand for “more emotion-based, me-to-you” greeting cards in the marketplace, and increased sales of everyday/general friendship cards.

Today, consumer purchases of 7 billion greeting cards generate more than $7.5 billion in retail sales. Of all cards purchased each year, roughly half are seasonal and half are “everyday card-sending situations,” says the GCA. Cards are available for more than 60 holidays, including those of ethnic origin such as Kwanzaa and Chinese New Year. Seasonal card sales are highest at Christmas (61 percent), followed by Valentine’s Day (25 percent), Mother’s Day (4 percent), Easter (3 percent) and Father’s Day (2.5 percent). These top five “card-sending holidays” account for 95.5 percent of individual seasonal card sales. As for “everyday card-sending situations,” themost popular is still Birthday, accounting for the 60 percent of everyday cards sold. Following that are Anniversary, GetWell/FeelBetter, Friendship/Encouragement, and Sympathy, which together account for approximately 87 percent of everyday cards sold, trailed by “Other” (Thank You, Wedding, Baby, etc.).

Who’s buying all these cards? The GCA says “people of all ages and types exchange greeting cards.” Ninety percent of all US households buy at least one card a year, and the average household buys 35 a year. Women are still the primary consumers, buying 80 percent of all cards priced from $.38 to $10, with most cards at $2-$4.

Card stock

imageWith countless designs available, how can you know what to stock? Insiders say that one of the biggest errors retailers make is to stock what appeals to their taste, not their customers’. In an interview for GiftLine.com, Neil Gelineau, the owner of Does Your Mother Know, a San Francisco greeting-card store, told writer Rachael Kelly that it was a challenge to select appropriate cards for his customers, 80 percent of whom are gay. When he bought his shop more than eight years ago, it was difficult for him to include the risqué styles his customers want, but he quickly learned to put their wishes first. Stationery retailers who experience listless sales can follow Gelineau’s lead: even if your customer base is less distinct or narrowly defined, know who they are (e.g., age, lifestyle, income level) and track the kinds of cards they buy (traditional, humorous).

If you’re new to cards and other stationery products, or you need to freshen your inventory, get news and advice about the latest trends by asking your vendors. They can usually offer insight on what’s selling for their retail clients. Another possibility: talk directly to the owner or designer, especially at small companies interested in building relationships with retailers. “I’ve appreciated the feedback I’ve gotten from retailers about… ideas for products or sales racks,” says Shelley Dietrichs, owner of Rare Mediums-Well Done (St. Louis, MO). “I’m open to anything they can suggest to further the cause.” Whatever you learn, though, keep in mind that some designs and messages that play well in one part of the country might flop in another. You need to know your own customers in order to make good product choices.

One of the surest ways for small stationery retailers to compete successfully against larger ones is to select new or unknown card lines that can’t make it into the major chains. “Look for interesting art and images, and be sure they have an emotional appeal,” says Trip Van Roden of Wellspring (York, PA), a stationery manufacturer. “Every company has its own style. In this industry, there are only a few large card companies, but there are hundreds of small ones. The best way to find them is to contact sales reps.” Also check greeting-card and stationery trade publications.

One small company that makes a big impression is The Great Cosmic Happy-Ass Card Company (Ashville, NC), which bills itself as creating art for the “spiritually challenged.” Diane English, the artist and owner, puts her cartoon art and sassy quips on cards, prints, T-shirts, mugs and mouse pads. Her designs range from the inspirational (“Friends Are Angels”) to the offbeat (“Blessed Are the Cracked”), and then some. “My cards are for the jaded card customer. I speak to the irreverent in all of us,” says English, who once owned a metaphysical bookstore. “I say what a lot of people are afraid to say. You’ve got to be outrageous.” Apparently, “outrageous” pays: her invitation-sized cards, which come with matching envelopes and clear plastic sleeves, get snapped up at $2.50 each. One small, independent bookstore sold 20 in one day, and sold out its entire Happy-Ass stock within a week.

Jots, a stationery line by Village Arts Press, has a distinct vibe, Leytus says—simple but bold. Colorful cartoon images are on greeting and note cards, notepads and cubes, notebooks and matchbook-sized memo pads small enough to tuck into a purse or backpack. The designs that Leytus and graphic designer Ellen Vener create don’t follow trends—they lead them, he says. “The simplicity of our designs hits a chord with the audience, and the style appeals to people across the board.” Leytus says their designs “have a hand-drawn feel, and we use big icons. We pair strong colors like chartreuse and fuchsia, which appeal to younger people, and blues and greens, which older people seem to like. You would never mistake our products for someone else’s.”

Where Jots has an edgier, more urban style, Wellspring’s products are country. Florals, fruits, domestic and wild animals, birdhouses, beehives and whimsical beach scenes decorate the company’s boxed note cards, pen-and-pad gift sets, magnets and clips, journals, and recipe books and cards. Although hardly a trendy niche, country sees its share of changing consumer tastes.” Fish were big one year but “roosters are very big this year, and toile is a very strong look,” van Roden says. “Our artists work with the leading-edge designers who create fabric designs and paint colors, so they know what consumers will want this year and next.” Wellspring is making a strong effort to tap into the gift market with their stationery products—for example, their notepad-and-pencil sets, and sets that include an ornament that matches the art on the pad.

Believing that kids should know that writing isn’t just for email, Dieterichs created a stationery line for the younger set. Her impetus: “I have a niece and a nephew who never sent thank-you notes or even picked up the phone and called after they received a gift,” she says. “I thought, ‘Darn it, I’m going to get thank-you’s!’” Thus were born Good Buddy Notes in five designs—Best Buddies, At School, Vacation/Camp, All Together, and Please Write—each with whimsical illustrations of kids and pets. They come in packages of 10 sheets and 10 printed envelopes. Her other products for kids include the Postcard Kit, and the Keeping in Touch with Grandparents Kit, each with eight postcard notes and two sheets of color stickers; the Travel Kit for Kids, with three draw-your-own postcards, a mini-box of crayons, and a brochure with word games and tic-tac-toe; and Kid’s Thank You Notes. Terrific for harried parents is the Emergency Birthday Party Kit, which includes eight party invitations with envelopes, and eight goodie bags. Other products include party invitations, Kid’s Party wrapping paper, gift enclosure cards, and a cute birthday card. The young set also gets a kick out of the party and camp/vacation stickers that add a fun touch to photo albums, scrapbooks and memory books. There are also the “New Baby” (newborn) and “New Addition” (adoption) lines of announcements, cards and more.

On display

image

Even the most intriguing or engaging greeting-card inventory won’t sell if the cards aren’t well displayed. Since they don’t offer the flexibility of a three-dimensional product, it’s tough to merchandise them creatively—especially since they have to face out, so that customers can see each design and easily pick it up to read it. Some retailers find that displaying them at the cash register spurs impulse purchases. Some non-stationery retailers cross-merchandise cards with other gift items, although the cards can get lost in such displays.

Jon Bonsignore, owner of the Nuvo card store in Dallas, treats greeting cards like works of art, widely spaced for maximum viewing. In an interview for Giftline.com, Bonsignore said that in 2001, he sold $180,000 worth of cards in just 1,015 linear feet of space. At his store, clear acrylic shelves let customers see each card’s full face; and each card and each shelf is spaced far apart from the next. As a final touch, his employees check on the cards at least every 90 minutes so that the displays stay orderly. And as with art galleries and bookstores, good lighting is a priority at Nuvo: after all, cards are both art and reading matter.

Since customers constantly look for new designs, retailers can boost sales by getting inventory monthly. For new products in window and counter displays, GiftLine.com offers ideas such as hanging cards on a “clothesline,” propping them on easels, framing them, or putting them in baskets, bowls and pots—all to catch the attention of shoppers. Replace cards that don’t sell within a month, but stick with proven sellers no matter how old they are.

Ink on paper

Customers need to sign the greeting cards they buy, so it makes sense to stock an assortment of pens—especially if they’re priced and positioned as impulse buys. Shoppers might also buy pens as gifts. (By the way, you could carry postage stamps, and have a little map or sign that shows the nearest letterbox or post-office drop.)

Sandy Bush knows about pens. Bush left her high-powered job as an engineer at the Ford Motor Company, moved to Maine, bought a small lathe, and began making pens from 50 different kinds of wood, including red cedar, bee’s wing eucalyptus, tiger myrtle, violet rosewood, and tulip wood. Incorporating the highest quality titanium-gold alloy, the pens are carefully finished and placed in velvet envelopes and pouches, and come with a lifetime guarantee—all for $15-$75 retail. “My challenge as an entrepreneur is getting past retailers’ initial impressions when I tell them I sell pens, because they’ve seen a lot of junk,” Bush says. “But when they see my products, they change their minds.”

Letters are still alive, too, and so is the demand for letter paper. Retailers can make their mark with sales of boxed stationery by offering a variety of designs, colors, textures and quality. Handmade paper in particular has grown popular with upscale consumers looking to revive the art of handwritten letters, or to give a “luxury” gift without spending a fortune. These papers are made from a variety of materials that often include wallpaper prints, various textiles and textile dyes, and may also incorporate surprising elements such as dried flowers and leaves, threads, or even metallics. And since these papers are made by individuals and not machines, each batch of a particular paper will be slightly different, giving it a custom, artistic look and feel. Right now, the hottest papers are those made from banana fiber, and embossed papers.

Journals and gift wrap are two other products that are naturals for stationery retailers. Once popular mainly with students, scholars, writers and sometimes travelers, “blank books”—journals, notebooks and even sketchbooks—have rocketed into the mainstream in recent years. After Oprah promoted “journaling” and keeping a “gratitude journal” (from Sarah Ban Branaich’s book, Simple Abundance), the demand for purse-sized notebooks withelegant or fun covers soared. “The cover is very important,” says Angelia Ohman, creative director of product development at Andrews McMeel Publishing (Kansas City, MO). “We think of it as fashion on a book.” Until very recently, adult women were virtually the only purchasers, but in what may be a new take on “Dear Diary,” the market has expanded to tween and teen girls.

But men of any age haven’t caught on to scribbling their daily observations or inner thoughts. So while female customers buy blank books for themselves or their female relatives and friends, few buy masculine-themed journals (e.g., hunting, golf, aviation) for the men in their lives, even as gifts. But that could change: Ohman says their stamped journal featuring World War II homefront pens is a hit, especially with military types, as are designs that appeal to travelers. Whatever the theme, buyers prefer spiral-bound notebooks over the more rigid “perfect-bound” journals. Also very popular are notebooks with pre-printed topics such as “News about friends and family” or “People and things that brighten my day,” and task-related themes such as home décor and party planning.

If you plan to stock journals, carry a wide variety of themes, spiral- and perfect-bound, with lined and unlined pages, and in standard, large and travel sizes. As for display, “it’s not enough to display the journals on a shelf,” Ohman says. “Show how the journal can be incorporated into the customer’s life.” Because most of the buyers are women, one way is to display journals grouped with other types of merchandise targeted to them, such as spa/stress relief, garden, or home décor.

Once you’re in the “paper” business, and since many stationery products are purchased as gifts, you might be tempted to carry gift wrap, too. But insiders caution that the gift-wrap market is saturated, and that it’s difficult for specialty retailers to sell when gift wrap, bags, ribbons and stickers are sold just about everywhere. Consumers who want inexpensive wrap and trimmings often buy them at mass merchandisers and dollar stores. The good news, though, is that customers seem willing to pay a little extra for gift-wrapping service. So experts suggest that specialty retailers offer gift wrapping with purchase—in plain paper at no charge, and printed paper, boxes, ribbons and stickers for a modest fee. The fancier wrap can be featured on display-wrapped gifts with all the trimmings, as background for other displays, or even framed.

The envelope, please

Is stationery a winner? It certainly can be. Whether you’re thinking of selling items in this expanding category for the first time or want to enhance your existing stationery sales, having a strong mix of products, an eye on trends, and a good understanding of customer preferences can mean sales worth writing home about.


Pamela Rohland

Pamela Rohland often writes about the joys and tribulations of entrepreneurship for a variety of regional and national business publications.

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