The new president of Hallmark Canada, Cindy Mahoney, visits the Hallmark Gold Crown store in Markham, On. Hallmark Cards in Canada is rolling out a new line of French cards geared specifically toward Quebeckers.Glenn Lowson
Hallmark Cards Inc. is changing its approach to the Canadian consumer as the greeting card industry tries to stay relevant in the digital age.
From cards that play pop songs to those bedazzled in rhinestones, consumers have more choice than ever when it comes to the messages they send on holidays, birthdays and other special occasions. But Cindy Mahoney, president of Hallmark Canada, says the company can do a better job of speaking to the diverse needs of Canadians.
Hallmark has about one-third of the Canadian market for greeting cards, "and that lags where we generally run globally. I'm here to change that," said Ms. Mahoney, who moved from the Kansas City, Mo., head office to Markham, Ont., in March to take on the job. She plans to bring in more local Canadian artists, boost the company's presence in Quebec and better match the company's distribution of products to the shifting retail landscape.
Ms. Mahoney is seeking growth at Hallmark at a time when industry profits are projected to decline. In the five years through the end of 2016, revenues are expected to have declined at an annualized rate of 6 per cent to $401.7-million (U.S.), according to a July trend report by research company IBIS World. Projections out to 2021 show further revenue declines and fewer sales outlets for greeting cards.
The report says that some of the slowdown is due to the rise of the Internet, which made it possible for consumers and businesses to send e-cards and create their own digital prints. There are still other challenges, such as the rising costs of wood pulp and other materials. Postage prices are also on the rise.
Ms. Mahoney counters that the types of people who buy cards may have more ways to connect, but their buying habits haven't dramatically changed. When someone's getting married, an e-card just doesn't cut it. And a cool talking Star Wars card can lure parents preparing for their kids' birthdays. She is used to being asked about these trends.
"I have had that question many times in my years at Hallmark. We're always watching for that. But the industry has remained relatively stable. When you look at 25 years ago compared to today, slight declines. But relatively stable," she said.
Hallmark Cards has been run by the Hall family and headquartered in Kansas City for 106 years, initially selling postcards, then Christmas cards and Valentines. In the decades that followed, the business grew internationally.
As of 2015, the company had 27,000 employees, distributed products in 100 countries and controlled several subsidiaries, including the Crayola brand. The company is still privately owned, but reported $3.7-billion in consolidated revenues last year.
After travelling across Canada meeting with retailers and some of the company's 900 employees in this country, Ms. Mahoney was struck by the differences in the Canadian market, compared to the United States.
The market is largely split between consumers who want one of the affordable cards available in discount retailers such as dollar stores, and high-end cards that light up or are covered in feathers and fabrics. In the United States the appetite for cards in the middle price range is larger. Hallmark's cards range in price from 99 cents to about $10.
"It's apparent to me that the way that [Canadian] consumers rely on retail, the trading areas, how people shop value versus high end seems different to me," Ms. Mahoney said. Hallmark cards are sold through retailers such as grocery stores, Walmart and about 130 specialty Hallmark Gold Crown stores, either franchised or corporately owned.
One of Ms. Mahoney's first major initiatives in Canada will be to roll out a new line of French cards called Voeux du Coeur, or wishes from the heart, geared specifically toward Quebeckers. This is a smaller market among Canadians, but one Ms. Mahoney says is underserved. The cards will be on store shelves this autumn.
"We're literally completely revamping and relaunching our French line," said Ms. Mahoney. She said the company uses editors that can discern between Parisian and Québéçois French, and aims for humour that is "a bit more edgy."
While most Hallmark cards are still printed in the United States, ornate cards that require assembly by hand are manufactured in several factories in Asia. These fancier cards, called Signature, take up to six months to be produced after creative inception. Signature cards have become unexpectedly popular among Canadian consumers in recent months and Hallmark is struggling to keep up with demand.
Competition in this realm could come from the Papyrus brand, owned by American Greetings Corp., the large card company that also owns Carlton Cards. The company has a 12.8 per cent market share in Canada, according to IBIS World.
To target the younger, digital-savvy demographic, Hallmark rolled out a line of meme-like greeting cards designed by millennial artists and writers. These cards can be produced simply, moving from the creative team to printed card in as little as three weeks.
Ms. Mahoney said keeping up with these trends will be integral to Hallmark's success, but the company also works to avoid overreacting to any flash in the pan.
"We're constantly trying to evaluate what do people really want at any given time?" she said. "Research is good, but what consumers tell you with their own money tells you even more."
Editor's note: A previous version of this story said American Greetings Corp. is the largest publicly traded greeting card company. In fact, the company has been privatized.