Industry Snapshot

Stationery product vendors are generally optimistic about sales prospects for 2005. Of the more than 100 vendors responding to Gifts & Decorative Accessories' annual stationery survey, more than four-fifths project their 2005 sales will be higher than in 2004.

Vendor optimism comes after several down years for the industry. According to figures reported by the U.S. Department of Commerce, spending for stationery and writing supplies dropped 6 percent between 2000 and 2004. Greeting cards fared worse than the stationery category as a whole, posting an 11 percent decline. If spending for 2005 follows the same track indicated by January's preliminary numbers, spending for the overall category will edge up by 1 percent to $17.9 billion, while spending for greeting cards will remain flat at $9.9 billion.

Some of the sales increases anticipated by vendors will come from higher prices. While most vendors think that prices will hold steady, at least 10 percent see price-point increases for 12 of the 16 stationery products covered by the survey. More vendors — 20 to 30 percent — see higher prices on the horizon for greeting cards, scrapbooking supplies, partyware, giftwrap/ribbons, and photo frames.

Photo frames prices appear to be the most volatile in the category, with 20 percent of vendors expecting lower prices and 20 percent expecting higher prices.

Some lower pricing may also be seen for writing instruments, photo albums and scrapbooks, with 15 percent of vendors predicting lower prices in the coming year.

The shifting product mix being offered by vendors also reflects changes in sales and popularity of products. Significantly more vendors are offering imprintables/invitations, scrapbooking supplies, craft supplies, desk/home office accessories, and giftwrap/ribbons than in 2003. With the exception of craft supplies, these are product categories that 12 to 21 percent of vendors expect prices to increase.

In a new series of questions for this year's survey, vendors were asked if consumers' interest in the product categories they offered had decreased, stayed the same, or increased during 2004. More than half of the vendors surveyed see increasing consumer interest for giftwrap/ribbons, craft supplies, greeting cards, imprintables/invitations, social/business stationery and desk/home office accessories. Proving that anticipating consumer interest is tricky at best, about one-fifth of vendors see declining consumer interest for imprintables/ invitations and craft supplies.

Half or more of vendors see consumer interest holding steady for posters/prints, frames, calendars/date books, and plush.

When it comes to design directions, modern/contemporary, spiritual/inspirational, and retro/pop are the leaders for 2005 according to more than one-third of the vendors surveyed. Retro/pop has shown increasing strength as a design direction since breaking away from the pack in 2002. Modern/contemporary has also been a steady winner, with only a slight dip in popularity last year.

The perpetual popularity of spiritual and inspirational themes may be a reflection of major outside forces. In 2002, in the aftermath of 9/11, 48 percent of vendors saw it as a design direction for the year. In 2003 and 2004, while still among the top design directions, it slipped to third and fourth place, respectively. This year, spiritual/inspirational is back to the number two slot, considered a design direction for 2005 by 37 percent of vendors surveyed.

Humorous and whimsical designs continue to be design winners, named by 29 percent and 28 percent of retailers, respectively. Conversely, only 19 percent of vendors see traditional/floral designs as a design direction for 2005, down from nearly two-fifths in 2003.

Handmade/handcrafted designs are still seen as a design direction by one-fourth of vendors, down dramatically from the 40 percent who believed it was a design direction in 2003 and 2004.

Gift specialty stores, closely followed by stationery/card shops, still capture the lion's share of both vendors' product distribution and sales volume. Some 90 percent of vendors sell their product through gift specialty stores and 83 percent sell through stationery/card shops. The two together lay claim to 57 percent of the responding vendors' business. These two distribution channels alone outpace all other types of distribution channels, putting them clearly at the top of the heap in importance for the stationery vendors surveyed.

This year's survey, conducted during January and February 2005, includes the responses of more than 100 vendors. More than a quarter reported annual sales of less than $100,000; another 16 percent had sales between $100,000 and $500,000. Twelve percent had sales between $250,000 and $999,000. A quarter of the responding vendors indicated sales of $1 million to $3.99 million. About a fifth reported sales of $4 million to $10 million or more. Gifts & Decorative Accessories' market research department conducted this annual survey of stationery vendors. Judi Fulbright (336-605-1092), the lead research specialist, supervised the survey and analyzed the results. Cynthia Myers, database manager, provided special assistance.