State of the Industry

Finally, some good news: Gifts & Decorative Accessories' annual survey of stationery manufacturers and vendors indicates that the lingering negativity in the wake of September 11 and the subsequent economic downturn has begun to dissipate. This cautious hopefulness is reinforced by Department of Commerce figures that suggest the stationery market expanded slightly in 2002: Stationery and writing supplies were up 1.6 percent at retail, while greeting cards rose 0.7 percent.

Survey highlights include:

• The number of respondents who thought that sales would increase in the coming year rebounded somewhat, to 75 percent. That figure was 70 percent last year, a sharp drop from 2001's upbeat 78 percent.
• The two strongest design directions of last year, Patriotic and Spiritual/Inspirational, lost ground. Meanwhile, the designs that tied for third place last year — Handmade/Handcrafted and Traditional/Formal — rank first and second, respectively.
• After the percentage of vendors who produced them fell in last year's survey, greeting cards, holiday items, albums, social/business stationery, and blank books and journals rebounded with aplomb. In addition, manufacturers seem to be broadening the categories they offer.
• 90 percent of vendors expect prices to stay the same for eight of the 17 product categories mentioned, with those expecting either price increases or decreases drastically reduced this year.
• Most vendors surveyed still sell through specialty gift and stationery stores. But the number doing business with bookstores, department stores, and florists increased significantly.

Despite a paucity of clear-cut trends, the terrain has shifted in terms of taste. The biggest news is that Patriotic, a design that was the second most popular last year with 43 percent of vendors carrying it, dissolved to 6 percent. Spiritual/Inspirational also slid, from 48 to 37 percent.

Meanwhile, Handmade/Handcrafted (40 percent) and Traditional/Formal (39 percent) gained ground to fill the number one and two spots. Consumers respond to anything that communicates extra time, thought, or care invested in its manufacture. Top-notch examples of Handmade/Handcrafted range from Clover Creek's sumptuous invites, whose use of natural elements typifies the growing trend, to If'n Books' albums, with distinctive hand-sewn bindings that set them apart.

Climbing up the chart is Modern/Contemporary at 37 percent. This design indicates anything pared down and simplified, from the streamlined desk selections at Wingard to bold, simple graphics featured in such card lines as Peaches 'N Pears and Compendium Publishing.

Items in the Traditional/Formal category often overlap with the Nature/Florals category, which also placed high at 31 percent. Punch Studio's catalog lends credence to this, as do the continued appeal of toile and emerging design themes such as cherries.

Also making big strides in the survey is the Retro/Pop trend, climbing to 29 percent from last year's 14 percent mark. This category's importance is mirrored by the growing popularity of Anne Taintor, whose tongue-in-cheek collages grace a wide array of products including a new line of napkins from Paper Products Design. Less overtly humorous representations of this look are abundant, as are those that take a cue from pop art's mod windowpane, stripe, and dot designs.

The top six categories offered by vendors remain the same as last year. Greeting cards regained their preeminence, and are included in the product lines of more than two-fifths of vendors surveyed.

Meanwhile, holiday items, blank books/journals, social/business stationery, and albums have all regained the ground they lost last year, and then some. The number of vendors offering frames, on the other hand, has continued to steadily increase since 2001.

In order to give retailers more coordinated offerings, vendors appear to be broadening their lines. From 1999 through 2002, the number of product lines offered by 20 percent or more of vendors has hovered between five and six. This year, ten categories are being offered by at least a fifth of vendors. Making the jump into the "over-20" group are magnets (27 percent), desk/home office accessories (23 percent), books (23 percent), and calendars/date books (20 percent).

According to the survey, almost two-thirds of vendors expect price points to stay the same across all product categories. When asked about whether their price points would increase, decrease, or stay the same, 90 percent of vendors expected prices to stay the same for eight of the 17 product categories listed.

Some are forecasting increases and decreases. Last year, ten categories were expected to experience increases by at least one-fifth of the vendors. This year, there are only four: imprintables/invitations (36 percent), greeting cards (30 percent), holiday items (26 percent), and social/business stationery (22 percent).

Meanwhile, 10 percent or more of vendors expect lower price points in only two categories, and both categories were listed last year, when they were two of seven expected to show lower price points. Photo/scrapbooking album prices are forecast to drop by 12 percent of vendors. Thirteen percent see a price reduction coming for frames. This might suggest a glut in these categories, or it could simply mean that vendors are looking to set themselves apart with lower prices.

Gift specialty stores (86 percent) and stationery/card shops (77 percent) remain the primary distribution channels for stationery. When asked which channel accounted for the greatest percentage of their business, 49 percent of respondents said gift specialty stores, 10 percent said stationery/card stores, and 9 percent said bookstores.

Book venues skyrocketed as a stationery distribution channel, up from 14 percent in 2002 to 57 percent this year. Other channels gaining in importance include department stores (from 34 to 43 percent), florists (32 to 42 percent), and discount department stores (16 to 21 percent). Resort/museums (42 percent) is a new venue.

More than 100 vendors responded to the survey, conducted during the first two months of 2003. Approximately 29 percent reported annual sales of less than $250,000; 11 percent reported sales between $250,000 and $500,000; 13 percent had sales between $500,000 and $999,000; 33 percent had sales of $1 million to $4.99 million; 4 percent had sales of $5 million to $9.99 million; and 12 percent reported sales of $10 million or more.

Gifts & Decorative Accessories' research team, led by Judi Fulbright, with assistance from Diane Hoth and Cynthia Myers, conducted the survey.