A Powerful Profit Center
Carlton Cards Comments on Opportunities in the Greeting Card Category
Western Grocer magazine recently had the opportunity to catch up with Paul Werynski, Sales Director, Carlton Cards Canada, to discuss the greeting card category and how retailers can make it a powerful profit center for their store.
The greeting card category in Canada is valued at approximately $600MM CDN or over 200MM cards and, according to Werynski, grocery is the second largest channel for distribution. Since 2014, the market share of the grocery channel has grown in the West, in large part, “to the commitment to the category that we see from our partners in the region”.
What follows is our Q&A with Werynski:
WG: How has the market changed in terms of the type of cards being purchased, including e-cards?
Werynski: While e-cards and text messaging are available, they do not currently represent a meaningful share of the category. Many card giving/sending situations are very personal and a card delivered via email or text message wouldn’t necessarily be appropriate. I do think that apps like our “Just Wink” platform can absolutely play a role in how we connect with friends, etc but it’s hard to imagine sending a Mother’s Day or sympathy card electronically.
In fact, we see “heavy loyals” in the category more engaged on Social Media platforms because they value meaningful connections in their lives. So, in many ways today’s technology can augment the category rather than hurt it and for those who love the art of communication they have many social tools available to them to keep those circles growing but when those relationships are truly meaningful they reach out to our brands to help support their need for authentic connection
In terms of the category, we see continued growth in both the premium end of the category (driven by our Papyrus brand) as well as the more value based offerings available in the dollar channel. Premium cards from brands like Papyrus have shown a surge in popularity and when strategically placed in stores as a compliment to the greeting card department we are seeing a new premium shopper attracted to that department and an increase in sales
WG: What is the principal demographic for cards? How would you describe this customer base in term of its value to retailers?
Werynski: In general terms, people of all ages buy the category. However, the primary purchaser of greeting cards looks a lot like a core grocery customer: Female head of household with at least 1 child in the house, post-secondary educated with average to above average income
The greeting card customer can serve as a profitable basket-builder for the grocery channel. Greeting cards are highly profitable and can significantly increase the margin/profit generated by a basket of products
While greeting cards aren’t a ‘traffic driver’, it is a highly planned purchase with a very specific use in mind. Shoppers overwhelmingly tell us that this is a category that they enjoy browsing and will go to another store to find the ‘perfect’ card if need be. Assortment is critical in terms of driving conversion in this category, for example: you can’t have 1 ‘happy birthday daughter’ card because that daughter could be 3, 10, 25 or 45 years old and therefore you have to maintain an adequate selection for customers
WG: How does Carlton Cards design its merchandising programs with retailers? How does it help the retailer connect with those customers?
Werynski: We customize our programs to the meet the needs of the channel, chain, region, province, etc. We are fortunate to be partners with most of Canada’s leading retailers and we work with them using the tools and insights that we have in conjunction with their own shopper insights/tools such as loyalty card data
Retailers who invest in the category by providing the right amount of space in a visible location while taking advantage of our in-store marketing capabilities are the most successful in this category. Carlton Cards looks at each store individually and has a proprietary, formalized process for providing the optimal greeting card department for that store.
WG: How should retailers determine the amount of space devoted to their card sections?
Werynski: We have proprietary tools and resources that can help arrive at that answer based on the specific store location which we discuss with each of our retail partners
Our goal is to always arrive at what is optimal for the shopper, with the ultimate objective being increased conversion that drives profitable basket growth