Business

Sales are down, but greeting card makers say they'll get well soon

A selection of greeting cards are seen at the Hallmark store in Macys Plaza in Los Angeles, California on November 17, 2011, (Glenn Koenig/Los Angeles Times/MCT)
A selection of greeting cards are seen at the Hallmark store in Macys Plaza in Los Angeles, California on November 17, 2011, (Glenn Koenig/Los Angeles Times/MCT) MCT

LOS ANGELES — The greeting card business might be in need of a get-better-soon card.

In the Internet age, with electronic greetings of all kinds now available, sales of traditional greeting cards have been on a long, gradual decline. In 1995, the national Greeting Card Association boasted that 2.7 billion Christmas holiday cards would be sold that year. This year, that number has dropped to 1.5 billion holiday cards.

Even so, greeting card makers say not to count them out. The industry estimates overall sales of 7 billion total greeting cards this year. New lines of cards and new products are being introduced every year, and the industry's second-largest card publisher, American Greetings, which has operations in Kentucky, has turned around sales in the last two quarters after a long decline. (Industry leader Hallmark Cards does not make its sales and profit public.)

"Even with the boom of social media, the death of the traditional greeting card has been vastly exaggerated," said Susan January, president of the Greeting Card Association.

Christmas is the most popular card occasion, with nearly 1.5 billion expected to be sold industrywide, according to Hallmark Cards. That is followed by Valentine's Day, with 144 million cards, Mother's Day with 133 million and Father's Day with 94 million.

Experts attribute the card-sales decline to increasing competition from e-cards and custom card services, and to more modern, and time-efficient, ways of communication.

"The industry's been really, really suffering from social media and email and the whole ability of their customers to connect with people they typically connect with by sending greeting cards," said Kathleen Ripley, an industry analyst at IBISWorld Inc.

Retail greeting cards are a $7.5 billion business these days, the Greeting Card Association estimated. There are more than 3,000 greeting card publishers in the United States, and the two largest companies — Hallmark and American Greetings — hold 82 percent of the market share, according to IBISWorld.

Hallmark's research has found that more than 20 paper cards are sent for every e-card, spokeswoman Jacyln Twidwell said.

"Our observation is that electronic communication is better for sharing information," she said, "but greeting cards are better for sharing emotion."

To help it grow amid the pressures, Hallmark has expanded its card selection and features, adding niche cards in categories that include godchildren, school bus drivers and hairdressers. It's all about staying relevant, Twidwell said. The company also has new 3-D cards, more cards with sound and even holiday cards with lights that pulse to the beat of the music.

And American Greetings is meeting similar challenges in an ever-changing marketplace. For its last quarter, the company reported profit, including a one-time gain, of $14.5 million, or 35 cents a share, up 71 percent from a year earlier. Sales rose 7 percent to $369 million.

The company is targeting younger customers. (The median age of American Greetings consumers is 46, according to IBISWorld.) It said it is keeping up with multimedia features, updating its holiday digital slide-show cards — paper cards holding LCD screens that display personal photos uploaded by the sender. And it launched its justWink line in June. These cards come with codes that, scanned by a smartphone, lead to an online app that enables customers to create virtual greeting cards.

"It's unique," American Greetings spokesman Frank said. "It meets a need that we saw in the consumers that shop our categories. It's a new way to make meaningful and fun connections."

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