Ever since TNS ceased providing greeting cardindustry data based on a massive consumerspending panel, there has been a conspicuouslack of market information about ourindustry. The big two American ownedpublishers and the GCA, both looked hard tofind an alternative, but after kissing manyfrogs, concluded that what was on offer inthe market was…A: Not very accurate, and B:did not represent value for money, for what itprovided.

Therefore the industry should begrateful to Mintel for producing its latestreport on the greeting card industry, as it atleast gives us some facts and figures tochew on.

However it is evident, uponreading, that whoever has compiled‘Greeting Cards - UK – April 2007’ isInternet obsessed. Hardly a pagegoes by without some reference toe-cards. The first main theme is‘Technological shifts are creatingre a l a l t e r n at i ve s t o t h econventional greeting card’ –

something that most in the industry woulddispute. The report does later admit that thisrisk appears small for the present at least‘although this may well change’, but it doesnot seem to prevent the authors mentioningit at every available opportunity!

Emails, text messaging, free e-cards anddigital cards generated by digital cameras areall described as being potential threats to theindustry, yet its own research figures seem toshow that the sending of e-cards has actuallydeclined from 17% of its market sample in2003 to just 15% in 2006.

However, most in the trade would find ithard to disagree with Mintel’s overallconclusion as to the state of the UK greeting

card market - that ‘The UK greeting cardmarket is large but mature, with limitedopportunities for growth in volume sales inparticular’. It does however, provide comfortwith the statement that the industry has seensteady sales growth since 2002, taking themarket value to an estimated £1.4 billion in2007. It continues that, ‘The strongest growthhas been at the edges of the market ratherthan in the mainstream – for instance, inhandmade craft cards and through non-coreretail outlets like bookstores and galleries,

plus online’ – althoughvirtually no evidence is givento substantiate this assertion.

Mintel estimates that themarket was worth £1,406million in 2006 and will growby 1% in 2007, although theresearch company thinks thatvolume sales will still be lowerthan in 2004.

Another comment madeis that the most frequent cardbuyers have responded well todesign creativity in the market,and restored at least some ofthe volume sales lost in adisappointing 2005. It states

INDUSTRY ISSUE

The MintelMinting

PROGRESSIVE GREETINGS WORLDWIDE 77

Above right: The Mintel Report panel’sbuying habits show that adults buy anaverage of 5.1 occasions cards a year. Theseoccasion cards are an OokiePookie age card from Maxandsid (left) anda design from Liz and Pip's newrange (right).Right: Hallmark's dynamic duo, Hoops &Yoyo was first launched online. The e-cardswere available before the cards hit theshops.

Mintel has just produced its latest report on the UK greetingcard industry, and given the lack of industry research nowavailable, this is very welcome.

While many of its quantative findings make interestingreading, some of the editorial conclusions should be taken witha healthy handful of salt. PG reviews the Mintel report.

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‘This is impressive in a large andmature sector with only limitedgrowth opportunities’.

Mintel’s view is that, theintroduction of the Royal Mail’snew postal charging system (PIP)based on both size and weight,went relatively smoothly, givingcredence to both to Royal Mail’sadvertising campaign, and by theuse of the GCA-initiated logo forthe backs of greeting cardsdetailing which postal rate isrequired. Yet PIP, recent postalstrikes and lack of confidence inRoyal Mail gave Mintel anotheropportunity to bang on about e-cards! ‘One real benefit offered bye-cards, is their speed of delivery.People can be pretty sure that ane-card and still more an e-mail ortext message will arrive on time…. While thiswarning may not be justified, it is anothersmall negative factor for this market, perhapshelping to further boost e-cards at theexpense of greeting cards’.

All through there p o r t t h e re a recontinuing referencest o s m a l l o n - l i n eo p e r a t o r s w i t hnegligible turnover butno mention of major,£multi-million playersl i ke I n t e r n at i o n a lGreetings, Watermark,

The Regent Group, Is It Art or Wishing Well.Both Kingsley Cards and KCNY are referred toas major players even though they were thesame company and went into administrationin April 2006.

Mintel also seems a little unsure ofitself on the size of the trade market, (ie thevalue of the cards sold by publishers toretailers and wholesalers). For instance,Mintel puts Paper House’s value marketshare at 3% which, extrapolated in turnover,would put its value at around £300 million.It also estimates that Hallmark and UKGreetings have 62% of the market, which tomany in the trade would seem to be on thehigh side. Most industry observers wouldprobably reckon on the trade market valuebeing in the region of £470 – 500 millionrather than £300 million.

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INDUSTRY ISSUE

Average Price Paid For A Card2002 2004 2006 % Change

2002-2006Birthday £1.05 £1.09 £1.11 +5.7%Christmas 18p 18p 18p -Other everyday £1.23 £1.35 £1.38 +12.2%Spring £1.72 £1.78 £1.80 +4.7%

Source: Mintel

Willingness To PayFrom Mintel’s research, half of consumers put a limit of £1.99 on their outlay and the greatmajority would not spend more than £2.99

Interestingly, males and younger pre or no-family consumers are the most prepared to spendover £3 on a greeting card, doubtless because they buy on fewer occasions than average.

In general, consumers are prepared to pay more for a card for a romantic occasionthan for a more everyday event, with Valentine’s Day topping the list. Men are as likely tobuy a Valentine’s card as women, whereas they are obviously far less likely to be involved inall other areas of card purchases.

Left: The Mintel Report highlighted recent postalstrikes and lack of confidence in Royal Mail in generalas a concern for card senders, although theintroduction of PIP had run relatively smoothly.Below: The report states that most prolific card buyers arewomen aged 25-64 and those with families. In retail termscards are also easier to find since women are heavier usersof supermarkets, cardshops and department stores - Imageof Paper Passions in Putney, London

UK Card MarketBreakdown Sales by market segmentat current prices (2006):

Birthday 41%Christmas 27%Everyday 17%Spring 15%

Nature CallsMintel’s research finds that 25% ofconsumers have bought a card for a newbaby in the last year and 30% a card tomark a wedding or engagement.

Although neither marriage norbirth-rates are buoyant, each sector stilloffers considerable further growthpotential on the basis of numbers alone.In addition, perhaps the trend towardsserial marriages, and therefore divorces,could generate more opportunities initself – for instance with the creation ofmore cards designed for stepmums anddads, and more ‘Well done on yourdivorce – good times ahead’ cards.

Mintel also signals what it considers‘unmet opportunities’ for the recognition ofthe growing numbers of family units whereparents do not marry. This factor mightcome into play in relation to major eventsof significance to most families such asanniversaries, birthdays, Mother’s or Father’sDays; in each case there is a possibility ofthe ‘non-traditional’ family unit feeling notquite part of the target market and so beingless likely to buy a card.

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The Ageing PopulationMintel suggests that the ageingpopulation does not bode well forthe greeting card market. ‘Decliningnumbers of under-15s will mean lessyounger age cards and less birthdayparties, which are a key driver ofvolume sales to consumers in thefamily lifestage’ the report claims.

In addition, it makes the pointthat as the population ages therewill be less occasions to buy cardsfor, as many events triggering cardsales will have passed, eg good luckin your exams, driving tests, newbaby and weddings.

Birthday cards are of particularimportance to the market in value terms; thesector accounts for less than 20% of volumebut around 40% of total value, largelybecause of the higher-value cards frequentlychosen for special birthdays for instance, orfor giving between partners.

It makes the point though that thedeclining number of children could indirectlyhelp to increase the average price paid stillfurther, since often pricier adult cards willmake up a larger proportion of the total.

On a positive note though, in themeantime there will be growing numbers ofopportunities to send special cards to markall the ‘important’ ages from 21 up through to100. With increasing life expectancy. ‘Theolder milestones from 80-100 may take ongreater importance in the market thancurrently and drive demand for a widerchoice of cards to mark such occasions,’Mintel points out.

PROGRESSIVE GREETINGS WORLDWIDE 81

INDUSTRY ISSUE

Card Sales By Type Of Outlet2002 2004 2006 % Change

2002-2006£m % £m % £m %

Specialist cardshops 459 35 485 35 475 34 +3.5Grocer multiples 287 22 318 23 335 24 +16.7Varietal stores* 160 12 167 12 170 12 +6.3Stationers, bookshops,art shops** 135 10 147 11 152 11 +12.6CTNs, convenience stores, post offices 148 11 140 10 128 9 -13.5Other*** 117 9 123 9 145 10 +23.9Total 1306 100 1380 100 1405 100 +7.6

* Including Woolworths, department stores, M&S etc** Including Paperchase concessions. *** Includes giftshops, charity shops, galleries, garden centres, online, mail order, market stalls(Source: Mintel)

Strengths And WeaknessesMintel sums up the minus and plus points of the trade.

STRENGTHS� There is great emotional/sentimental attachment to the idea of sending cards making the practice almost universal.� Also an entrenched tradition and habit that is resistant to change.� Despite already large volume sales there is still growth potential in general everyday cards. � Men buy fewer cards than women so they represent further potential to increase sales.� Consumers buy cards both on impulse and after planning, so all types of retailer from the specialist card shop to the

gallery gift shop to the garden centre etc can take a slice of the market. � Wide availability also stimulates impulse purchase.� Easy access to the market means good opportunities to bring new ideas to the market.� Increasing competition in terms of price and availability ensures the category cannot stand still and will see constant

freshness and innovation.

WEAKNESSES� Resistance to spending more than £2.99, and the average spend is much lower at £1.95.� Consumer resistance to newer events that are seen as marketing ploys.� Men under-participating, with women almost twice as likely to send cards on five or more occasions a year (61%

compared with 37%).� Concerns for the environment could lead to more consumers turning to e-cards instead of the paper alternative (as

already promoted by Friends of the Earth with its own range).� Going forward, will younger generations buy as many cards as the families and older buyers of today?� E-cards already represent a challenge to the market and are likely to become more widely used. Technological

innovation may well bring more such alternatives.� Growing numbers of people are already creating their own greeting cards; this trend might spread further, especially

with technological advances like those made possible by digital photography.� Increasingly crowded market, becoming highly fragmented.

Right: Mintel suggests that the ageing population doesnot bode well for the greeting card market. - A carddesign from Tracks.

Mintel is offering the report titled 'Greetings Cards' toPG readers for the discounted price of £1,350 (usually£1,500). Contact Mette Holm on 020 7606 6000.

In ConclusionArguably the most useful part of the Mintelreport is its BRMB consumer study, whichinvolved almost 1,000 adults aged 15 plus.Its results from this panel’s buying habitsshow, for example, that adults buy anaverage of 5.1 occasions cards a year, withmost prolific buyers being women aged 25-64 and those with families. In retail termsthey are also easier to reach, since womenare heavier users of supermarkets,cardshops and department stores.

The report contains much detailedinformation on buying patterns andattitudes based on socio-economic anddemographic groups. The attitudinalanalysis section is interesting – some53% of the consumer sample thoughtthat cards were too expensive for whatthey are, a figure surprisingly low giventhat the question is somewhat leadingand that presumably half the samplegroup are male.

Overall however, for all itslimitations, the Mintel report is a

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welcome addition to industry discussions.