House of Cards

… No, I’m not talking about the show, but rather the physical store often found in malls across the country. In fact, an estimated 6.5 million greeting cards are sold each year in the US with sales reaching $7 to $8 billion.[1] Greeting cards are so pervasively tied to our culture that we nickname some of our less popular holidays after one of the top companies (“Hallmark holidays”). When shopping for a card, there are many options: the grocery store, pharmacy, local and national greeting card stores, and even online e-cards. Although many things are shifting to digital, the feeling you get with a physical card is hard to replicate.

As this past weekend was Valentine’s Day, I made a trip to Papyrus, conveniently located in the mall and a good strategic complement to other stores (as many people are shopping for gifts). Papyrus occupies the premium market segment, selling handmade cards with its signature gold hummingbird seal for an average of $7 per card. The direct cost of the materials (paper, decorations, and labor) and design are likely a small fraction of that price, allowing them to have a high margin thanks to the emotional, social, and cultural demands of the holidays. To help drive volume, the store continuously runs a “Buy 3 get 1 free” promotion, which is what I went with. Still, spending over $20 for 3 cards is beyond my usual budget. They also had 20% off coupons for signing up for their email mailing list or completing a post-purchase survey, along with an annual rewards membership for $10, where members can save 10% on every purchase as well as be invited to special friends and family events. It’s also worth noting the company (Schurman Retail Group) also owns Carlton Card Retail and American Greetings, which extends its reach into the average and budget areas of the market.

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