State of the Industry

The results of Gifts & Dec's annual survey of stationery manufacturers and vendors indicates that the category wasn't as negatively impacted by the events of September 11 as predicted. Nevertheless, that seminal day and its aftermath altered the landscape for greeting cards, social stationery, albums and journals, photo frames, and related products.

Some of the survey highlights are:

• While 70 percent of respondents expect their 2002 sales to be better than 2001 sales, that number shows a slight decline from last year's 78 percent who predicted sales increases over the previous year.
• Vendors are producing fewer greeting cards and less social and business stationery than they did in the past two years. However, this may reflect a move to high-end product, rather than a decline in consumer interest.
• A glut of stationery products will feature patriotic and spiritual/inspirational designs. Retailers will have to choose products carefully in order not to end up with unsold merchandise when the trend peters out.
• Most vendors expect prices for most of their products to remain stable during the course of this year.
• Vendors are selling more to gift specialty stores than they are to stationery and card shops.

Respondents were asked what design directions they thought stationery and related products would take in 2002. Their answers corresponded roughly to those for 2001, with two notable, though unsurprising, exceptions: Spiritual/inspirational and patriotic were the top responses. Neither of these themes was reported as a significant design direction in last year's survey.

Almost half of the respondents (48 percent) cited spiritual and inspirational themes as a leading design direction. An example of a traditional entry in this theme category is the greeting cards of Amberley Greetings' Many Blessings line, which fuse encouragement, faith, and healing words with scriptural quotes. "Edgier" examples, such as a Max & Lucy line that uses cartoon-like angel icons (with a devil often thrown in as a counterpoint), are equally "spiritual and inspirational," appealing primarily to young urbanites.

About two-fifths (43 percent) of respondents predicted that patriotic themes would be as important for the remainder of 2002 as they were in the months following 9/11. Without a doubt, red, white, and blue will be the predominant colors at this year's National Stationery Show, and retailers should keep in mind that the huge supply will eventually overwhelm demand. Like any trend, consumers will tire of the same treatments, themes, and colors. The best advice is to seek out product that either incorporates patriotic elements in a larger design, or in a distinctive style, such as Victoriana.

While traditional/formal and handmade were two other design directions the respondents saw as important (36 percent each), modern/contemporary, cited by 31 percent of respondents, was also strong. No doubt the influence of large urban markets reflects that direction.

The fluctuation in the five top stationery product categories cited by survey respondents in 1999, 2001, and this year suggests that consumers' buying patterns and tastes are changing. (The 2000 survey focused exclusively on the Internet.) Although tops among products manufactured by respondents, greeting cards have dropped to 32 percent from 43 percent in 1999. The anthrax scare may be partially to blame, as consumers became wary of mailing or accepting unsolicited letters. One producer commented that he had the "worst sales ever in 14 years [during] the three months after 9/11." However, the need Americans have expressed to connect with one another may cause greeting cards to bounce back quickly.

Frames have demonstrated renewed strength, with 31 percent of respondents offering them in their product lineup in 2002. Collective trends such as cocooning and family closeness should drive this category through the rest of the year, as framed photographs take on special meaning.

Last year's number one category, blank books/journals, declined from 38 percent to 30 percent, probably as a result of the over-saturation predicted in last year's report. Meanwhile, holiday items have steadily declined over the past two years, which may be a reflection of consumers' desire to purchase, and decorate with, more permanent accents.

The social/business stationery product category, which surged last year, fell below its 1999 level (to 23 percent), and photo/scrapbooking albums dwindled to just 16 percent. It seems that consumers are opting for technology (such as e-mail and digital cameras) over traditional methods of corresponding and recording. Those who stick with tradition are often faced with more expensive product selections.

Most vendors expect price points to remain stable. One vendor commented, "The economy has prompted us to hold off on price increases until 2003."

Those categories expected to have rising price points seem to be regarded by consumers as indulgences. As such, they don't mind paying a little extra for them. Forty-seven percent of respondents anticipate increased prices for imprintables, 35 percent for social and business stationery, 30 percent for desk or home office accessories, 26 percent for craft or scrapbooking supplies, and 23 percent for both holiday items and calendars.

The percentages for vendors expecting lower prices were smaller, with notable categories being desk or home office accessories (17 percent), photo or scrapbooking albums (17 percent), books (16 percent), frames (13 percent), writing instruments (11 percent), and craft or scrapbooking supplies (11 percent) (Categories with expected price increases and decreases suggest the presence of both high- and moderate-priced merchandise.)

Gift specialty stores, rather than stationery/card shops, account for the greatest percentage of respondents' business. Ninety percent of surveyed vendors sell to gift specialty stores, while three-fourths sell through stationery and card shops, and two-thirds through catalogs.

The majority of the survey respondents sell through more than one channel of distribution. More than half sell through four or more channels; 30 percent use five or six channels.

Some 140 vendors answered this survey, which was conducted during the first two months of 2002. About a quarter reported annual sales of less than $250,000; 12 percent had sales of $250,000 to $500,000; 12 percent had sales of $500,000 to $999,000; 35 percent had sales of $1 million to $4.99 million; 7 percent had sales of $5 million to $9.99 million; and 10 percent reported sales of $10 million or more.

Judi Fulbright was the lead researcher for the survey, which was conducted by Gifts & Decorative Accessories' research department in Greensboro, North Carolina.