horizon - Progressive Greetings

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ON THE
HORIZON
While 2011 will not go down in the annuls of greeting
card history as one of the best for the industry, neither
was it the worst. And our trade is certainly faring a lot
better than many others.
PG put members of the GCA Council on the spot
and asked them to highlight a defining moment of
2011 and shine the spotlight on one issue that the
trade should be mindful of in 2012.
SOR, Post Office Deregulation
Ged Mace, managing director of The Art File:
"Looking beyond the headlines of 2011 we
can appreciate the subtle but very real
shift in the way we are all approaching our
businesses. As the world continues to
change so must we publishers continue to
adapt to the changing needs of our
customers and the market. Equally, old
industry rules that have been cast in stone
for decades simply don’t apply any longer
or at the very least are being re-written.
Sale or return, and other stringent
demands placed on publishers need to be kept in check. In this
current challenging climate it’s worth remembering that great
products, which are well designed, actually become more valuable,
whoever publishes them. Everything can be improved, so if it’s not
broken… break it!"
In 2012 the deregulation of the
Post Office for setting the 1st and
2nd Class stamp charges due to
come into effect in the spring
would have a significant impact of
card sending through the postal
service. The GCA continues to lobby
loudly on behalf of its members
with regard to this potential threat
to our industry."
Above: Ged Mace.
Right: The rise of stamp prices will affect the greeting
card industry.
Sale Of Moonpig, Ongoing Performance
Of Card Factory
Chris Houfe, sales director of Great
British Card Company:
"As far as defining moments and key
developments in 2011, the sale of Moonpig
earlier in the year, plus the outstanding ongoing performance of Card Factory, goes to
show there are still opportunities in a mature
market. Who's next to make their millions?
One ongoing issue which I feel GCA
members should be mindful of is Sale or
Return (SOR). The effects of SOR on all
publishers is massive. Whether it's the smaller retailers who use this
arrangement to enable them to offer an
even wider choice or the larger retailers
who expect full shelves, there seems no
simple answer to this growing problem."
Above and below: Chris Houfe (GBCC) and Bev Cunningham at the most
recent GCA AGM.
Left: The financial success of Moonpig shows there are some profitable
stars in the greeting card universe.
Acquisitive Action, Brokerage
Bev Cunningham, product and marketing director of
Abacus Cards and Clare Maddicott:
"The last year saw the continuing effect of the
difficult economic climate on both retailers and
publishers; with many of the main publishers
having to re-think and re-structure. Alongside
this, a difficult market has provided acquisition
opportunities for a number of publishers who
have sought growth through acquisition in a
flat market. All of this shuffling has created a
changing landscape for the players and their
traditional markets. I believe we will look back
and see these events as the beginning of a new shape to the
industry, one that is marked by winners and losers emerging
primarily from a change in market share at the top and the
opportunities this then affords medium-sized publishers to increase
their distribution. As for ongoing issues, the spread of brokerage is
significant. What began as a convenient way for supermarkets to
stock product from a multitude of suppliers, but deal with one source
of supply and invoicing, has now spread to infect other market
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sectors; with what I believe
will eventually be a
detrimental effect to the
retailer, the supplier and the
consumer alike. Put simply…
the retailers that have the
edge on their competitors are
those retailers that know their
customers and locality well,
they know how to plan their
racks to get the best pocket
turn possible; they are preeminently placed to make the
Above: Are there any signs that supermarkets such
as Tesco will ever move away from brokerage?
buying decisions and to plan their
racks, so why pass this responsibility onto a third party? The broker
understandably, after taking on the responsibility for planning and
the possible cost of racking, is going to want the lion’s share of
pockets for themselves, leaving the weaker captions for the other
publishers involved. Not only does this then not give the retailers or
their customers the best selection of appropriate product, it also
means that due to the unwieldy nature of brokerage weak designs
are slow to be replaced and new designs are not introduced as
frequently as when dealing direct with a supplier. Therefore, what on
the surface appears to be an easy solution to purchasing and
planning is, in reality, a costly exercise that strips away the unique
quality of an independent retailer and reduces customer choice.
Homogenising card retailers and their offerings in such a way will
undoubtedly switch off consumers, consequently reduce sales and
profits for retailer and publisher, and ultimately backfire on the broker."
VAT, Price Points, Working Together
Rachel Hare, managing
director of Belly Button
Designs:
"A key point of the last year has
been the rise in VAT and its
effect on shifting price points.
As for the coming year, given
the current climate, I really think
GCA members should be
looking after both retailers and
fellow publishers alike. As an
industry we really need to work
together! I have been working
within the industry for 15 years
and, from a personal business
Above: Forging links between peers and retailers is
perspective, 2011 was the
a key for the future believes Rachel Hare, seen
hardest year yet work wise, but here with her children Finlay and Daisy on the
in many ways one of the most Belly Button Designs stand at PG Live last May.
satisfying too, as we produced our fastest selling range ever –
Over The Rainbow.
Everything is just harder and work decisions are even more
considered – everybody is being careful. It is however, a time for
new ideas to flourish; we just need to have the confidence to put
them out there!"
Moonpig’s Advertising Campaign,
New Technology
David Orr, director of Simon Elvin:
"One of the defining moment of last year has to be Moonpig’s
effective advertising on TV and coverage of its financial
performance. Suddenly everyone outside our industry started
talking about what a big player they were in greeting cards, even
though they only represented a small percentage of the
£1.4 billion spent on cards. I was just amazed at the media
attention. It just showed me how you can propel a company into a
high profile one in a very short time. I feel that the greeting card
industry will begin to radically
change in the coming year due
to new technology. Just as
Kindle has had a major impact
on book publishing where by
you can now download a book
in seconds rather than go to
the high street bookstore or
wait for the Amazon parcel to
arrive. In my grandparents’
time, my grandfather wrote
letters from the trenches in
WW1, telling my grandmother
how much he missed her,
loved her and hoped that she
had a good Christmas.
These letters typically took weeks to arrive, but still would be
of comfort and treasured. Then along came Hallmark and
American Greetings in my parents' and my 'Baby Boomer' era.
Their cards contained all the words and expressions that you felt
but maybe couldn’t compose yourself. These publishers radically
changed the way we communicated as there were cards for every
occasion. Now it's our children’s time and "Social Networking” is
the buzzword. Facebook and Twitter are here to stay. No longer do
you have a mobile phone - you have a mobile communicator that
holds your emails, texts, photos, music and so much more.
Communication has never been so quick, easy and cheap and will
radically change our industry
forever, just as Kindle did for
book publishing. However, I
personally still prefer the
printed book. There is
nothing more satisfying
than closing your eyes
as the book slips
gently from your lap
to the floor. And
Kindles are more
expensive to
repair than a torn
book cover!"
Above: David Orr is anticipating an ever
technology-driven world impacting on the trade.
Right: A Kindle is great, but only a fool would read it in the bath.
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Fragmentation, Supermarkets’ Impact
Multi-Channel Action, Economy
Paul Woodmansterne, managing director of
Woodmansterne Publications:
Lisa Palillo, head of retail activation of Hallmark:
"A defining moment for me in
2011 was when Sharon Little
[chief executive of the Greeting
Card Association], stood up at
the Association's AGM and said
that the membership of the
GCA was now 462. I remember
when the membership was just
14. It defined the fact that we
now live in a fragmented world.
Napoleon's observation that
'England is a nation of
shopkeepers' is soon to be replaced with 'England is fast
becoming a nation of self-employed internet traders publisher/consumer ratio 1:1'.
On the issue front, supermarkets are trying to leapfrog
over other supermarkets' positions in a blind panic to retain
and grow market share. There is little time or space given for
wisdom or logic. Traditional and successful retailers are prone
to forsake their
perfectly good values
for a short-term nibble
on greener grass. I say
to them - stick to the
knitting, but if you
have to, make smaller
garments... and
be happy!"
Above: Paul Woodmansterne recalling
the ‘old days’ of the GCA with David
Hicks (Really Good) at the AGM which
took place at London’s Design
Museum.
Right: If Napoleon was around today,
Paul Woodmansterne thinks he might
well have changed his famous quote!
"I think that the influx of print-on-demand companies, and the resulting
need of the industry into taking a more 'multi-channel' approach, has
been a pretty big change during 2011. We are seeing various members of
our industry taking on a multi-channel strategy - Clintons with its own
print-on-demand offer, WHSmith buying Funky Pigeon, Card Factory
buying Getting Personal and
Hallmark continuing to develop its
own print-on-demand business. We
need to begin behaving like a lot of
other industries, accepting and
embracing the technological
changes occurring and the fact that
many shoppers now buy products
across many channels, from physical
stores to internet buying. It is also important to note how these multichannel shoppers can be more valuable to us all, as they tend to both
spend more money and be more loyal than non multi-channel shoppers.
As for issues for 2012, unfortunately, I think the predictions for the
economy are going to continue to have impact on the industry.
Consumer confidence
looks like it's not going
to improve in the
short-term and trading
will remain tough.
Although we are
fortunate to be in a
fairly 'recession proof'
industry, I'm sure we
will still be facing
some difficult trading and market conditions. News of high street
national store chains struggling and closing down is a continued threat
to us all. Consumers have been struggling with things like fuel price
increases, house price decreases and issues in the Euro Zone - all leading
to reduced disposable income and a genuine fear for the future."
Above: Lisa Palillo is all smiles with Peter Reichwald (GBCC) at a GCA AGM.
Above right: The multi-channeled world in which we live saw Card Factory acquire Getting Personal in 2011.
Majors’ Loss Of Grip, Clintons Concerns
Stephen Baker, director of Pigment Productions:
"In 2011 there has been a great rise in design standards throughout industry, great creativity etc. It feels like the
major publishers' grip on the nationals is loosening/changing and hopefully creating opportunities; I’m not sure
the grocers are happy with the existing brokerage models. This
year there are fears about:
l Clintons' sustainability in its current structure and how that
might affect the high street in 2012; The rise of Facebook and
other social networking sites affecting how people communicate
will influence the decreasing seasons such as Christmas; The
decline of post office and potential hike in price of stamps; The
growth of Card Factory and so the deflation on the high street;
There will be a growth of value and exclusive product in the grocers which will affect the
smaller publishers' ability to win space in these areas."
Above: Stephen Baker feels that the creativity among smaller publishers is challenging the larger players’ grip.
Right: Being such high profile, woes at Clintons affects the whole industry, believes Stephen.
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