WWW.IBISWORLD.COM Greeting Cards & Other Publishing in the US May 2019 1
Sending condolences: Industry revenue is expected to contract as external competition grows
This report was provided to Emerald Expositions (2134005483) by IBISWorld on 08 October 2019 in accordance with their license agreement with IBISWorld
IBISWorld Industry Report 51119 Greeting Cards & Other Publishing in the US May 2019 Tanvi Kumar
2 About this Industry 16 International Trade 31 Regulation and Policy 2 Industry Definition 17 Business Locations 31 Industry Assistance 2 Main Activities 2 Similar Industries 19 Competitive Landscape 32 Key Statistics 3 Additional Resources 19 Market Share Concentration 32 Industry Data 19 Key Success Factors 32 Annual Change 4 Industry at a Glance 19 Cost Structure Benchmarks 32 Key Ratios 22 Basis of Competition 33 Industry Financial Ratios 5 Industry Performance 23 Barriers to Entry 5 Executive Summary 23 Industry Globalization 34 Jargon & Glossary 5 Key External Drivers 7 Current Performance 25 Major Companies 9 Industry Outlook 25 Hallmark Cards Inc. 11 Industry Life Cycle 26 American Greetings Corporation 27 CSS Industries Inc. 13 Products and Markets 13 Supply Chain 29 Operating Conditions 13 Products and Services 29 Capital Intensity 14 Demand Determinants 30 Technology and Systems 15 Major Markets 30 Revenue Volatility www.ibisworld.com | 1-800-330-3772 | [email protected] WWW.IBISWORLD.COM Greeting Cards & Other Publishing in the US May 2019 2 About this Industry
Industry Definition This industry comprises publishers that calendars, coloring books, yearbooks and primarily publish greeting cards in print more. This industry excludes newspaper, or electronic form. Some companies also magazine, book, directory, map, atlas, publish products such as postcards, database and music publishers.
Main Activities The primary activities of this industry are Greeting card publishing Art print publishing Calendar publishing Catalog (i.e. mail order or store merchandise) publishing Clothing pattern publishing Coloring book publishing Diary and time scheduler publishing Discount coupon book publishing Postcard publishing Yearbook publishing
The major products and services in this industry are Business, trade and professional publications Consumer publishing Greeting cards sold in boxed sets Single greeting cards Other
Similar Industries 45322 Gift Shops & Card Stores in the US This industry retails a range of gifts, gift wrap, novelty merchandise, souvenirs, greeting cards, party supplies and seasonal and holiday decorations.
51111 Newspaper Publishing in the US This industry produces and distributes print newspapers. Companies that solely publish online news are excluded from this industry.
51112 Magazine & Periodical Publishing in the US This industry produces and distributes magazines and other periodicals. Operators gather, write and edit articles and sell and prepare advertisements for print or electronic publication.
51113 Book Publishing in the US Operators carry out the design, editing and marketing activities necessary for producing and distributing books. These establishments may publish books in print, electronic or audio form.
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About this Industry
Additional Resources For additional information on this industry www.bea.gov Bureau of Economic Analysis www.greetingcard.org Greeting Card Association www.publishers.org The Association of American Publishers www.census.gov US Census Bureau
IBISWorld writes over 1000 US industry reports, which are updated up to four times a year. To see all reports, go to www.ibisworld.com
Provided to: Emerald Expositions (2134005483) | 08 October 2019 WWW.IBISWORLD.COM Greeting Cards & Other Publishing in the US May 2019 4 Industry at a Glance Greeting Cards & Other Publishing in 2019
Key Statistics Revenue Annual Growth 14–19 Annual Growth 19–24 Snapshot $4.6bn -2.2% -2.0% Profit Wages Businesses $357.4m $800.4m 709
Revenue vs. employment growth Consumer spending Market Share Hallmark Cards 30 4.0 Inc. 20 3.5 40.4% 3.0 10 American 2.5 Greetings 0 Corporation % change % change 2.0 19.0% -10 1.5 -20 1.0 Year 11 13 15 17 19 21 23 25 Year 12 14 16 18 20 22 24 Revenue Employment SOURCE: WWW.IBISWORLD.COM p. 25 Products and services segmentation (2019) 4.1% Key External Drivers Business, trade and professional publications External Competition for 4.3% the Publishing industry Other 12.5% Consumer spending Greeting cards sold in boxed sets Demand from gift shops and card stores Demand from book stores Number of children 54.6% Single greeting cards aged nine and younger 24.5% Consumer publishing
p. 5
SOURCE: WWW.IBISWORLD.COM
Industry Structure Life Cycle Stage Decline Regulation Level Light Revenue Volatility Low Technology Change Medium Capital Intensity Low Barriers to Entry Medium Industry Assistance Low Industry Globalization Medium Concentration Level Medium Competition Level High
FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 32
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Executive Summary Over the five years to 2019, the Industry profitability has experienced proliferation of paperless substitutes has downward pressure as its downstream dampened revenue for the Greeting markets have increasingly been Cards and Other Publishing industry. characterized by online retailers rather Many industry products, such as greeting than brick-and-mortar businesses. For cards, day planners and calendars, have example, large-scale e-tailers, such as increasingly been rendered obsolete as Amazon.com Inc., have become key more consumers prefer digital distributors for publishers, enabling this alternatives, aided by the ubiquity of the downstream market to negotiate low smartphone. Additionally, many of the costs for industry products. Industry consumers that purchased greeting cards profit is expected to account for 7.7% of for holidays and birthdays in the past revenue in 2019, a drop from 8.5% in now reach out to their friends and family 2014. Furthermore, industry revenue is via social media. Moreover, as many expected to decline an annualized 2.2% over the five years to 2019 to $4.6 billion, including a projected 1.6% The industry will likely continue to struggle decline in 2019 alone. To remain afloat, to generate revenue due to mounting many publishing companies have focused on creating or licensing their external competition products, thereby reducing their reliance on distributors. downstream markets have consolidated, Over the five years to 2024, the such as brick-and-mortar book store industry will likely continue to struggle to retailers, the industry has grappled with generate revenue due to mounting fewer retailers selling industry products external competition. As a result, revenue on their shelves. In response, many for the industry is forecast to decline an publishing companies have consolidated annualized 2.0% during the outlook as well, enabling some industry players to period, dropping to $4.2 billion. Many reduce their operational costs, increase publishing companies will consolidate, production volumes or integrate similar enabling these industry operators to brands to enhance their product secure superior contracts with portfolio. In addition, industry downstream markets. For example, some consolidation has strengthened some publishing companies will expand their publishing companies’ ability to negotiate portfolio of electronic greeting cards and favorable contracts with downstream cater to nontraditional downstream suppliers and artists. markets, such as clothing retailers.
Key External Drivers External Competition for has hastened the shift toward companies the Publishing industry that solely provide digitally based Although the Greeting Cards and Other substitutes. External competition is Publishing industry includes companies expected to intensify in 2019, posing a that publish both print and electronic potential threat to the industry. products, it does not include companies that solely publish their products Consumer spending digitally. Consumers are increasingly able A rise in consumer spending may lead to to access alternatives to industry products more consumers purchasing high-cost on their mobile phones and tablets, which greeting cards, such as interactive
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Industry Performance
Key External Drivers greeting cards. Furthermore, revitalized store consolidation has caused the continued discretionary spending among consumers complete liquidation of some stores, such incites businesses to purchase mail order as Borders Group Inc., resulting in an catalogs from industry publishers. oversupply of stocked items. Therefore, Consumer spending is expected to fewer book stores have required greeting increase in 2019, representing a potential cards and other industry products. opportunity for the industry. Demand from book stores is expected to decrease in 2019. Demand from gift shops and card stores Gift Shops and Card Stores industry Number of children aged products include greeting cards, art nine and younger prints, posters, calendars and postcards. Children are major recipients and As gift shops and card stores exhibit purchasers of greeting cards, coloring larger sales volumes, they will require books, posters and art publications. more industry products to stock their Furthermore, educational institutions retail shelves. In 2019, the Gift Shops and students represent a major market and Card Stores industry is expected to for yearbooks. Therefore, growth in the grow modestly. number of children aged nine and younger bolsters industry revenue. The Demand from book stores number of children aged nine and Book stores typically sell greeting cards younger is expected to increase and other publishing products. Book minimally in 2019.
Consumer spending Demand from gift shops and card stores
4.0 2
3.5 1
3.0 0
2.5 -1
% change 2.0 % change -2
1.5 -3
1.0 -4 Year 12 14 16 18 20 22 24 Year 11 13 15 17 19 21 23
SOURCE: WWW.IBISWORLD.COM
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Industry Performance
Over the five years to 2019, the Greeting Current Cards and Other Publishing industry has Industry revenue contended with growing competition from Performance 0 low-cost digital alternatives and no-cost social media interaction. The industry excludes companies that solely publish -2 industry products online, including art prints, greeting cards and calendars. As -4
more companies have benefited from the % change lower costs associated with publishing and -6 distributing products exclusively online, the industry’s level of external competition -8 has increased. Furthermore, as some Year 11 13 15 17 19 21 23 25 downstream brick-and-mortar retailers have consolidated, the industry has SOURCE: WWW.IBISWORLD.COM grappled with fewer outlets to generate industry revenue. these messages over social media In March 2019, major retailers CVS platforms such as Facebook or Twitter. Pharmacy and Walmart Inc. (Walmart) These factors have contributed to the announced that they would be would be industry’s decline. Over the five years to cutting back on greeting card sales. 2019, industry revenue is anticipated to Executives at both companies stated that decline at an annualized rate of 2.2% to they believed their stores had dedicated $4.6 billion, including an expected 1.6% too much aisle space to greeting cards in decline in 2019 alone. At the same time, a time where everything seems to have the average industry profit margin is gone digital. Many consumers that once expected to have drop to 7.7% of revenue, purchased greeting cards for friends and largely as a result of operators family members are now simply sending experiencing declining demand.
Intensifying Many digital technologies have caused a result, external competition for the competition consumers to view some industry industry has intensified. products as obsolete. For example, The trend of customization has also many businesses and consumers alike had mixed effects on the industry. For have started using applications for example, many consumers have preferred calendars and schedulers on their to design and customize their own mobile devices, thus lowering demand greeting cards online; this has spurred for industry products. Moreover, the some companies that solely offer online proliferation of e-cards, or electronic publishing services to tap into this greeting cards, has had mixed effects on market, adding to external competition. the industry. While many publishing In response, many industry publishers companies have expanded their digital have offered products with additional presence to increase sales volumes, features, such as animated digital there has also been the emergence of pictures and voice-recording companies that solely publish products technologies. However, these new online, which are included in the product offerings have failed to drive the Internet Publishing and Broadcasting industry to growth. As consumers industry (IBISWorld report 51913b). As become increasingly busy, the process of
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Industry Performance
Intensifying purchasing stamps and mailing greeting IBISWorld estimates, the number of competition cards presents another obstacle for students in primary and secondary school continued industry growth. has risen over the past five years. With In contrast, demand for industry more students enrolled in school, there products aimed at the educational has been an increasing number of market, such as yearbooks and school students to purchase yearbooks, school planners, has improved. According to calendars and other industry products.
Shift toward Many big-box retailers and mass Smaller companies have interactive greeting merchandisers, such as Target Corporation cards and Walmart, have increased their begun tailoring their leverage to negotiate low-cost contracts with greeting card publishers, which has message to relate to a failed to generate sufficient sales volumes youthful audience to offset marked down greeting card prices. Nevertheless, some industry There is also a surge in younger operators have moved toward developing a consumers purchasing greeting cards. market niche by offering greeting cards Smaller companies have begun with technological additions. For example, tailoring their message to relate to a many publishers began offering youthful audience, creating cards that technological elements, like recording take on a more casual tone. In features and light-emitting diode (LED) deploying humor and irony, these lights, to create interactive greeting cards. operators rely on consumers who These cards, along with greeting cards spend more on one high-value card made from recycled materials, have instead of purchasing in bulk. Though slightly buoyed the industry’s profit small operators have benefited from margins as consumers were attracted to popularity in niche markets, they often these higher-priced products. While many lack the operational resources, such as holidays have bolstered demand for high-volume production capabilities greeting cards, particularly Christmas and and a robust distribution network, that Valentine’s Day, poor off-season sales enable large players to dominate the during the five-year period mitigated these industry. These factors have hastened holiday-related sales volumes. industry consolidation.
Consolidation Over the past five years, the industry has manufacturer of eco-friendly greeting exhibited an uptick in acquisition and cards, prior to the current period. The consolidation activity. Many key industry company also acquired Papyrus, a luxury players have acquired smaller players to card manufacturer, to merge the two create synergies with similar brands, acquired companies into the subsidiary combine manufacturing facilities and Papyrus-Recycled Greetings Inc. As a increase their leverage to negotiate result of some consolidation, the number favorable pricing with downstream of industry enterprises is expected to markets (e.g. retailers). For example, decline at an annualized rate of 1.7% over American Greetings Corporation acquired the five years to 2019 to total 709 Recycled Paper Greetings Inc., a specialty independent operators.
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Industry Performance
Consolidation Consolidation has been a key strategy smartphone users to personalize cards, continued for industry operators to close including adding photos and their underperforming locations, reduce signature, and pick up the card at the overhead costs, divest secondary nearest Walgreens Company store. This businesses and product lines, adopt trend, coupled with consolidation, has newer technologies and outsource some enabled industry operators to hire fewer printing activities. As more industry employees. As a result, the number of operators have offered digital services, industry employees is expected to the need for a large workforce has decline at an annualized rate of 3.3% declined. For example, Hallmark Cards during the five-year period to total Inc.’s Go Cards application has enabled 18,532 workers.
The Greeting Cards and Other Publishing billion, which can be partly attributed to Industry industry will struggle to generate revenue many large-scale downstream markets Outlook over the next five years as a result of negotiating lower costs for industry mounting external competition. As more products. Additionally, industry profit digital publishing companies that are not margins are expected to contract over industry-relevant inundate the market, the five years to 2024. This is partially external competition will continue to due to the rising cost of paper, a key heighten. Moreover, the continued input commodity for publishers, adding consolidation of brick-and-mortar book to operational costs and cutting into stores will cause industry publishers to profitability. While industry publishers grapple with lower demand for calendars, can markup product prices to offset greeting cards, time schedulers and other higher raw material prices, growing industry products. competition from companies that solely Over the five years to 2024, industry publish their products online will revenue is forecast to decline at an prevent many industry publishers from annualized rate of 2.0% to total $4.2 raising prices.
Trends and Over the next five years, the industry will The industry’s landscape technology continue to grapple with growing competition from digital substitutes. In will change as publishing particular, the advent of smartphones has caused many industry products, such companies expand their as paper-based calendars and time online presence schedulers, to be considered obsolete by consumers. Additionally, many The industry’s landscape will continue companies are going paperless to cut to change considerably as many waste and implement more eco-friendly publishing companies expand their business practices. As a result of this online presence. According to data from trend, demand for paper-based desk the Greeting Card Association (GCA), calendars, time schedulers and other Americans purchase more than 6.0 industry products are expected to billion greeting cards each year. While steadily decline, dampening industry younger and more technologically savvy revenue growth. consumers are currently driving online
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Industry Performance
Trends and sales volumes for the industry, according emojis. Overall, this trend is indicative of technology continued to the GCA, this will likely expand to the industry seeking new methods to include more demographics during the expand both its customer base and its use outlook period. For example, major of digital platforms. More greeting card player Hallmark Cards Inc. has publishers will move toward the attempted to attract a diverse customer customization trend by providing base with its online greeting card services innovative ways for users to write card that enable consumers to print cards in greetings or become more involved with Spanish, French and other Latin- card design. Additionally, industry language diacritical marks. operators that offer greeting cards that Moreover, American Greetings integrate well with technology will develop Corporation (AGC)’s justWink brand has a market niche. AGC’s video e-cards enable recently developed an Apple Watch users to send personalized videos and pick application that enables users to send lyrics for the card’s birthday song.
Consolidation While integrating industry products with The industry will continues technology will buoy demand for many industry operators, the industry will still consolidate to have the contend with fewer brick-and-mortar retailers, such as book stores, stocking financial resources to industry products. Furthermore, poor enhance its digital presence industry performance has incited some operators to offer low-price industry downstream markets will still be wary of products in dollar store chains, which will entering into long-term contracts with likely fail to produce sufficient sales greeting card publishers. Rising postage volumes to become a lucrative option for stamp prices, coupled with increasingly generating industry revenue. time-strapped consumers, will likely Additionally, consolidation in deter many consumers from mailing downstream markets, such as office greeting cards. supply stores, will increase their ability to Over the five years to 2024, the negotiate low prices for industry number of industry enterprises is products, hampering industry revenue. expected to decline at an annualized rate Since the Book Stores industry’s of 1.9% to total 645 independent (IBISWorld report 45121) revenue is operators. The industry will continue to expected to decline over the five years to consolidate to have the financial 2024, the industry will contend with resources necessary to invest in fewer retailers stocking greeting cards enhancing their digital presence, as well and other industry products in their as implement new digital applications product portfolios. Nevertheless, the Gift that enable consumers to personalize Shops and Card Stores industry (45322) their greeting cards. Meanwhile, the is expected to exhibit growth, expanding number of industry employees is at an annualized rate of 0.3% during the expected to decrease at an annualized outlook period, stimulating demand for rate of 1.9% during the same period to premium greeting cards from industry reach 16,841 workers as the industry operators. While this trend will prompt consolidates and hires more part-time demand for industry products, employees to cut costs.
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Industry Performance Life Cycle Stage There has been a contraction in industry activity Consumers are demanding lower-priced products Competition from substitutes is increasing
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Industry Performance
Industry Life Cycle Industry value added (IVA), which Furthermore, many publishers have measures the Greeting Cards and Other contended with mounting competition Publishing industry’s contribution to from digital substitutes such as e-cards This industry is the overall economy, is expected to and electronic organizers. While the in Decline decline at an annualized rate of 2.6% industry includes companies that publish over the 10 years to 2024. both paper-based and electronic greeting Comparatively, US GDP is anticipated to cards, yearbooks, calendars and other grow at an annualized rate of 2.2% products, it excludes companies that solely during the same 10-year period. This operate online. As many downstream indicates that the industry is in the markets have consolidated, such as book declining life cycle stage, which can be stores, the industry has grappled with attributed to more consumers and fewer revenue streams to generate businesses using digital substitutes. For industry revenue. In response, the industry example, greeting cards, calendars and has consolidated, with the number of day planners are increasingly being enterprises falling at an estimated considered obsolete by consumers due to annualized rate of 1.8% during the 10-year mobile phones offering similar services. period to 645 independent operators.
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Supply Chain KEY BUYING INDUSTRIES 32212 Paper Mills in the US Paper mills supply paper for printed products. 32311 Printing in the US Many publishers outsource printing to commercial printers.
KEY SELLING INDUSTRIES 42412 Office Stationery Wholesaling in the US Office stationery wholesalers distribute some industry products 42492 Book, Magazine & Newspaper Wholesaling in the US Book, magazine and newspaper wholesalers distribute some industry products 44511 Supermarkets & Grocery Stores in the US Supermarkets and grocery stores are distribution channels for greeting cards and other publications. 45121 Book Stores in the US Book stores sell greeting cards and other publications. 45211 Department Stores in the US Department stores sell greeting cards and other publications. 45311 Florists in the US Florists sell greeting cards. 45321 Office Supply Stores in the US Office supply stores sell calendars and organizers. 45322 Gift Shops & Card Stores in the US Gift shops and card stores sell greeting cards and other published products. 61111a Public Schools in the US Public schools and their students purchase yearbooks, atlases and maps.
Products and Services The products and services segmentation also divided into two broad categories: within the Greeting Cards and Other seasonal cards and occasional cards. Publishing industry has remained fairly Occasion greeting cards comprise the consistent over the five years to 2019. largest portion of greeting card sales. In While a range of products and services is particular, the most popular occasion included in the industry, the segments card is for birthdays, followed by other depend on many of the same demand secondary occasions that include: determinants and often have similar Sympathy, Thank You, Wedding, fluctuations in revenue. Therefore, Thinking of You and Get Well, among segmentation by share of revenue is other greeting cards. relatively stable. Christmas cards comprise the largest portion of seasonal cards, with 1.6 billion Greeting cards purchased annually, accounting for Greeting cards sold individually comprise 75.0% of the most popular seasonal an estimated 54.6% of total revenue in cards. This is followed by cards for 2019. Comparatively, greeting cards sold Valentine’s Day (6.8%), Mother’s Day in boxed sets, such as value packs and (6.2%), Father’s Day (4.2%), Graduation assorted boxes, comprise an estimated (3.1%), Easter (2.7%), Halloween (1.0%), 12.5% of total revenue. Greeting cards are Thanksgiving (0.7%) and St. Patrick’s
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Products & Markets
Products and Services Products and services segmentation (2019) continued 4.1% Business, trade and professional publications 4.3% 12.5% Other Greeting cards sold in boxed sets
54.6% Single greeting cards 24.5% Consumer publishing
Total $4.6bn SOURCE: WWW.IBISWORLD.COM
Day (0.3%), according to data from the period, which has expanded the largest Greeting Card Association. Over the past market for this segment to account for five years, this product segment has 24.5% of industry revenue. remained relatively stable. Business, trade and Consumer publishing professional publications The consumer publishing product This product segment includes products segment includes products published for published for businesses, trade and consumers, excluding newspapers, professionals; however, it excludes periodicals and books. Yearbooks make publications for newspapers, periodicals up the largest share of this segment, and books. This product segment followed by calendars and other includes catalogs, diaries and time products. This segment also includes schedulers. Over the past five years, this coloring books, pattern books, postcards product segment has contracted to and posters. Over the past five years, this account for 4.1% of industry revenue; this product segment has expanded due to can be attributed to the popularity of more students enrolling in schools. electronic organizers, including mobile According to data from the US Census calendar applications, which have Bureau, the number of individuals replaced the need for printed schedulers enrolled in school (measured as the total and date books. Further exacerbating this number of students enrolled in trend, many businesses have gone elementary school, high school and paperless, lowering their demand for college) increased during the current industry products.
Demand The major determinants of demand for consumers and businesses alike are Determinants Greeting Cards and Other Publishing confident in the economy, they will industry products include the level of purchase more industry products. For promotion by publishers and retailers, example, businesses, such as book, household disposable incomes and magazine and newspaper publishers, that businesses’ corporate profit. When experience an uptick in their profitability
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Products & Markets
Demand will demand more printing services. 10 card buyers consider greeting cards Determinants Meanwhile, consumer sentiment and essential, while eight out of 10 buyers continued personal disposable income are the expected their purchases to remain stable primary determinants in the quantity of in future years. greeting cards and other publishing Meanwhile, sales of products aimed at purchases by household consumers. the school market, such as yearbooks, Women are the primary source of children’s coloring books and journals, demand for some industry products, are supported by growth in student most notably greeting cards. According to numbers. The number of enrollments at the Greeting Card Association, women all levels of education affects demand for purchase an estimated 80.0% of all these products. Industry changes will greeting cards. However, this historically stem largely from the use of personal steady demographic may be shrinking as computers, the internet, smartphones publishers are successfully targeting male and portable tablet computers such as customers. Men generally buy a single Apple’s iPad. These changes will likely card at a time, while women are more have an adverse effect on demand for likely to buy multiple cards at once. Over many of the industry’s products. For the five years to 2023, demand for example, some external competitors have greeting cards is projected to continue added to competition for the industry by declining; however, the industry is offering publishing products solely expected to retain its core consumers. online. In response, many industry According to a survey conducted by the publishers have also begun offering Greeting Card Association, seven out of digital cards online.
Major Markets Major market segmentation (2019)
12.7% Individuals aged 24 and younger 21.6% Individuals aged 65 and older 14.6% Individuals aged 35 to 44
17.8% Individuals aged 55 to 64 16.1% Individuals aged 25 to 34
17.2% Individuals aged 45 to 54 Total $4.6bn SOURCE: WWW.IBISWORLD.COM
Individuals aged 24 and younger Card Association (GCA), 60.0% of In 2019, individuals aged 24 and younger millennials bought a greeting card in 2016 account for one of the smallest Greeting (latest available data). In particular, some Cards and Other Publishing industry individuals within this demographic market segments at an estimated 12.7% of have demanded witty greeting cards that total revenue. According to the Greeting reference social media. Moreover, some
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Products & Markets
Major Markets greeting card companies have have limited the number of holidays or continued manufactured greeting cards that feature occasions that require greeting cards. emojis to attract and strengthen demand For example, according to the GCA, from this demographic. Over the next many consumers, including individuals five years, this market segment is within this demographic, recognize expected to expand. birthdays via Facebook and other social media platforms, lowering demand for Individuals aged 25 to 54 greeting cards. Individuals aged 25 to 34 account for an estimated 16.1% of total revenue in 2019, Individuals aged 55 and older while individuals aged 35 to 44 and aged In 2019, individuals aged 55 to 64 and 65 45 to 54 comprise an additional 14.6% and older are estimated to comprise and 17.2% of total revenue, respectively. 17.8% and 21.6% of total revenue, Some individuals within this respectively. According to the US Postal demographic have favored customized Service, older individuals typically send greeting cards, such as greeting cards the largest volume of greeting cards each that enable users to upload their own year. Over the next five years, some artwork and design the card layout or greeting card companies may potentially message. Moreover, some companies cut into demand from this key enable users to upload business logos to demographic by expanding their product their greeting card. While demand for portfolio to include witty greeting cards greeting cards from this market segment that feature social media references, thus has been relatively robust, many appealing to millennials rather than this individuals within this market segment core customer base.
International Trade Imports and exports are not significant create touch-sensitive components. in the Greeting Cards and Other Furthermore, labor-intensive cards, Publishing industry. However, such as cards that require handwork, publishers often outsource the printing may be sourced from global of their products to overseas-based manufacturers as well. While the manufacturers. Many greeting card and industry derives an insignificant amount other publishers may require input of revenue from exports, many industry commodities from globally based operators have expanded to include manufactures, such as electronic international locations in their circuits. For example, many greeting operations. For example, American card companies offer smart cards, which Greetings Corporation operates in North have recording features, and interactive America, the United Kingdom, Australia cards, which use electronic circuits to and New Zealand.
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Products & Markets
Business Locations 2019
est AK 0.1 e a d
ME reat M d 1.8 akes t a t c 1 2 NY 3 WA ND 9.1 4 MT 0.0 5 3.4 0.5 MN 4.4 WI ock 0.9 MI PA 6 SDP a s 2.7 2.6 OR 0.3 7 3.4 Mou ta s ID IA OH 9 8 0.5 WY 1.1 1.6 0.4 IN VA NE IL 1.4 WV 0.3 4.3 0.1 2.5 KY est NV 0.5 1.2 NC UT MO 2.0 0.9 CO KS 2.7 2.5 1.5 TN 1.1 SC CA 0.3 14.0 OK AR out east 0.7 0.7 GA AL 1.7 AZ MS 0.9 1.8 NM 0.1 0.6 out est LA TX 0.5 FL 5.2 9.0
est Establishments (%) HI Less than 3% 0.3 Additional States (as marked on map) 3% to less than 10% 1 VT 2 NH 3 MA 4 RI 10% to less than 20% 1.0 0.4 3.1 0.5 20% or more 5 CT 6 NJ 7 DE 8 MD 9 DC 1.5 2.7 0.4 0.9 0.6
SOURCE: WWW.IBISWORLD.COM
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Products & Markets
Greeting Cards and Other Publishing Business Locations Distribution of establishments vs. population industry operators’ locations are influenced by historical factors (i.e. where 30 major players have located their headquarters and production facilities),
population and economic activity 20 concentration, production costs and the
supply of skilled labor. The regions that % account for the largest share of industry 10 activity include the Western region (with an estimated 22.4% of industry establishments and 17.3% of the 0 population), Southeast region (19.2% of West establishments and 25.7% of the Plains Southeast population) and Mid-Atlantic region Southwest Great Lakes Mid-Atlantic (16.2% of establishments and 15.2% of New England
the population). Establishments Rocky Mountains In the greeting card segment (the Population largest segment in this industry), the two SOURCE: WWW.IBISWORLD.COM major players’ US operations are located predominantly in the Plains region establishments), New York (9.1%) and (Hallmark Cards Inc., with the region Florida (8.9%). While industry overall accounting for 10.2% of industry establishments are concentrated in establishments) and the Southeast highly populated areas, manufacturing region (American Greetings facilities are typically located in the Corporation). States with the highest Midwest region because of its proximity concentration of industry establishments to both the west and east coasts, which include California (14.0% of lowers transportation costs.
Provided to: Emerald Expositions (2134005483) | 08 October 2019 WWW.IBISWORLD.COM Greeting Cards & Other Publishing in the US May 2019 19 Competitive Landscape Market Share Concentration | Key Success Factors | Cost Structure Benchmarks Basis of Competition | Barriers to Entry | Industry Globalization
Market Share The Greeting Cards and Other Publishing concentrated. US greeting card publishers Concentration industry exhibits a high-to-moderate range from small, independently run level of market concentration. In 2019, organizations to major corporations. the top three players are expected to However, in general, the greeting card Level collectively account for 62.0% of total business is extremely concentrated. Concentration in this industry revenue. Market share In comparison, the yearbook product industry is Medium concentration has been steadily segment is less concentrated. increasing over the past five years due to a Nevertheless, the majority of the market string of acquisition activity among the for yearbook products is divided among industry’s major players. For example, just a handful of companies, including Hallmark Cards Inc. acquired SpiritClips Jostens, American Achievement, Herff prior to the outset of the five-year period, Jones, Lifetouch Inc. and Walsworth enabling the company to expand its Publishing Company. Additionally, digital greeting card product portfolio. industry operators are shifting However, the level of concentration varies manufacturing of low-cost cards to between different product segments. The high-end cards to compete with boutique greeting cards product segment is highly card makers.
Key Success Factors Access to niche markets Automation – reduces costs, particularly Publishers must be able to identify a those associated with labor niche market, and then effectively Automation benefits industries producing IBISWorld identifies serve it. mass quantities of specific products. It 250 Key Success helps reduce costs, increase capacity Factors for a Effective cost controls utilization and may increase consistency business. The most Price competitiveness and access to of quality. important for this steady supplies at reasonable prices are essential to success. Establishment of brand names industry are: Having a strong brand name can bolster Production of premium goods/services sales volumes and profit margins. Quality products (e.g. creative content and quality paper and print) and services Control of distribution arrangements (e.g. providing advice to customers and Strong distribution networks can be very replenishing retailers stocks on time) can important to some products and in some support sales. market segments.
Cost Structure The Greeting Cards and Other Wages Benchmarks Publishing industry’s cost structure In 2019, wage expenditure is estimated to varies between companies operating in comprise 17.2% of total industry revenue. the industry. For example, a company’s Wage costs typically do not include size, product offerings, production outsourced or contracted content volumes, creative production costs, as production (e.g. artistic or editorial well as the level of technology and print work). In the Greeting Cards and Other quality used, all influence a company’s Publishing industry, many operators hire individual cost structure. outsourced workers to create greeting
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Competitive Landscape
Cost Structure cards that require labor-intensive Material costs vary considerably between Benchmarks handwork. Over the five years to 2019, companies. Some publishers have continued total industry wages as a share of revenue in-house printing operations, while have declined slightly. This can be others outsource printing. attributed to industry companies For example, American Greetings increasingly outsourcing tasks and Corporation (AGC) employs printing implementing laborsaving technologies, techniques that facilitate the production lowering production and manufacturing of short runs and multicolor printing that inefficiencies and reducing overall wage can be converted to direct-to-plate costs. As a result, companies were able to technology, increasing their product reduce their workforce in line with turnover. AGC has a vertically integrated declines in revenue. supply chain, which lowers purchasing costs by enabling the performance of all Purchases procurement, manufacturing, The manufacturing process includes distribution, service and ordering product specification, creative design, activities within the company’s sheet arrangement, lithography (the manufacturing facilities. process of printing from a flat surface Operators are increasingly using higher that repels ink in some areas), sheetwise quality images and printing papers for (card finishing is applied while the card is many of their products. Printing plates, on the sheet) and cardwise finishing blocks, ink, paper, adhesives and (finishing has to be applied to card photographic film make up the majority manually) and packing and distribution. of purchase costs. For example, greeting
Sector vs. Industry Costs
Average Costs of all Industries in Industry Costs sector (2019) (2019) 100 n 7.7 P r o fi t 17.5 n Wages n Purchases 17.2 80 n Depreciation n Marketing 26.4 n Rent & Utilities n Other 60 40.0 15.3 40 5.1 Percentage of revenue Percentage 4.2 3.0 1.7 3.5 1.8
20 28.0 28.6
0 SOURCE: WWW.IBISWORLD.COM
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Competitive Landscape
Cost Structure card manufacturing processes usually unable to include large marketing Benchmarks involve printing, die cutting, hot stamping budgets in their expenditures. Well- continued and embossing. Overall, purchasing costs recognized brands have greater access to account for an estimated 40.0% of major retailers; therefore, they are more industry revenue in 2019. likely to secure favorable supply agreements and coveted shelf space with Profit those retailers. Average industry profit, as measured by earnings before taxes and interest, is Rent estimated to comprise 7.7% of revenue in Rent varies among operators, with the 2019. This represents a decrease from greatest determining factor being 8.5% in 2014. Typically, the greeting card whether or not an operator outsources product segment is more profitable than printing. For those print industry other industry products such as products within rented facilities, rent yearbooks and calendars. Industry costs are higher. However, rent still operators can bolster their profit margins makes a small portion of industry by providing a product portfolio of revenue at 1.3%. high-margin greeting cards, such as custom cards that enable consumers to Utilities include their own personal photos. In Utility costs are also low in the industry general, low levels of competition have at 0.5% of revenue. Over the past five kept profit margins high over the past five years, rent and utility expenditures have years. However, this has changed slightly steadily declined as the trend of as the price of paper has increased. consolidation reduced the number of greeting card manufacturing facilities. Depreciation Depreciation in the industry is Other estimated to account for 1.7% of revenue Other costs accounted for in this segment for the typical publishing company, include insurance, legal costs, which includes write-downs of company recruitment, compliance with assets during a specific period. environmental regulations, distribution Depreciable assets for this industry and human resource management include computers, software, expenses. In particular, government taxes manufacturing equipment and office and license fees make up a significant furniture. Over the past five years, share of other costs. However, the deprecation has increased. greatest expense under this bracket includes the costs associated with Marketing outsourcing. Operators often hire third- In product segments where brand party contractors to create, design and recognition and development are crucial write greeting cards and other industry for consumer demand, marketing products. Additionally, larger operators expenses are much higher than the 3.0% have begun shifting production overseas, industry average. While key players will further contributing to outsourcing costs. typically incur substantial marketing These other costs are expected to account expenditures, smaller companies will be for 28.6% of industry revenue.
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Competitive Landscape
Basis of Competition Internal competition in this segment, but continued Due to the Greeting Cards and Other consolidation among operators may Publishing industry’s diverse product increase competitive pricing pressures Level & Trend portfolio, greeting card and other over the next five years. Competition in publishers compete on several factors. Publishers may contend with retailers’ this industry is Price-based competition is an integral terms, such as incurring costs from High and the trend basis of competition for industry payments and other concessions to retail is Increasing operators. Many greeting card and other their product under long-term publishers attempt to pass on cost agreements. Some retailers may secure savings from efficient operations to exclusive supply side contracts with consumers in the form of lower prices. retailers, which enables operators to However, many industry publishers have prevent competitors from being included developed a market niche for specialty in a retail chain’s product portfolio. products, like high-margin cards that are Product development initiatives and personalized. For example, enabling protection under intellectual property consumers to purchase cards with their laws in some product segments can personal photos or recordings, as well as provide companies with competitive cards with premium paper, have enabled advantages regarding product quality industry operators to differentiate their and design. products and gain a competitive advantage. Many publishers also compete External competition with their access to downstream markets. Many of the industry’s operators Consolidation in downstream markets, experience external competition from such as supermarkets, grocery stores and digital media. For example, publishers of office supply stores, have increased many calendars and time planners contend retailers’ ability to negotiate low prices with competition from digital substitutes for industry products, intensifying like tablets, smartphones and e-mail price-based competition in the industry. calendars. To a lesser extent, greeting Furthermore, many publishers compete card and yearbook publishers compete with their access to distribution with online substitutes like e-mail and networks. Larger publishers that are able social networking sites such as Twitter to provide industry products in bulk to and Facebook. Operators have reacted to chain retailers will remain competitive. the growing use of online communication Yearbook publishers compete on by developing and marketing products quality of service, product customization that can be purchased and sent through and personalization, timeliness, print their websites. Companies have also quality and capabilities, price and adjusted their marketing campaigns to product offerings. Historically, price has emphasize the value of more traditional not been the primary basis of competition products in the digital age.
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Competitive Landscape
Barriers to Entry Barriers to entry in the Greeting Cards and Other Publishing industry are Barriers to Entry checklist Level & Trend moderate. The industry is heavily Competition High concentrated, with key leaders Hallmark Barriers to Entry Concentration Medium Cards Inc. and American Greetings in this industry are Life Cycle Stage Decline Corporation accounting for a large share Capital Intensity Low Medium and Steady of total revenue. Accordingly, new Technology Change Medium entrants will likely cater to small Regulation and Policy Light geographic areas or markets niches. Industry Assistance Low
Some barriers to entry for the industry include start-up costs; established brand- SOURCE: WWW.IBISWORLD.COM names that are well-known at the retail and end user levels; and intellectual property, distribution. For example, downstream which can protect existing popular brands markets like Walmart Inc. and Target and designs. Industry operators design and Corporation are increasingly demanding produce products that often require lower prices for greeting cards to remain computers, specialized software and capital competitive with dollar store chains that equipment like printers and presses. Along also sell industry products. with the cost of raw materials such as Existing players’ economies of scale paper, ink and adhesives, these materials and scope also represent a barrier to new can make it a somewhat costly endeavor to entrants. For example, some greeting start an enterprise. However, new card publishers have their own technology has decreased the price of manufacturing plants, retail operations several of these inputs in recent years. The (i.e. either owned or franchised) and trend of downstream customers established websites. Some have also consolidating, such as supermarkets, is developed sales agreements and scan increasing their leverage to negotiate technology with third-party retailers. low-prices, thus heightening price-based Overall, potential industry entrants competition for publishers. Due to contend with the barrier of needing to consolidation causing fewer retailers to conduct efficient manufacturing require industry products, many publishers operations to offset large marketing, have struggled to access consumers via packaging and advertising expenditures.
Industry The Greeting Cards and Other Publishing globalization, such as the greeting cards Globalization industry has a moderate level of segment (Hallmark Cards Inc. and globalization, with a large number of American Greetings Corporation have small establishments catering for subsidiary companies inside and outside Level & Trend localized or niche markets. Some factors the United States) and, to a lesser extent, Globalization in that reduce the level of globalization in the consumer and office products this industry is this industry include the ready availability segment. In addition, several major Medium and the and low cost of printing equipment; the publishers rely on foreign manufacturers trend is Increasing jobbing nature of most work; the need for for various products they distribute. a thorough understanding of and close Similarly, manufacturing greeting cards contact with customers and end users and that require handwork, which requires a high transportation costs. labor-intensive workforce, may Nevertheless, there are some segments continually be outsourced from Asia due with relatively high levels of to reduced labor costs. However, the
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Competitive Landscape
Industry industry overall is impeded from greeting card industry makes it difficult Globalization outsourcing manufacturing facilities due for global manufacturers to meet continued to high transportation costs. Also, deadlines. Manufacturing greeting cards developing manufacturing facilities that requires a standardized production are not near greeting card artists and process and synergy between designers poses as a barrier to manufacturers and card designers, which production, as the seasonal nature of the can be impeded by global facilities.
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Major Players American Greetings Corporation 19.0% (Market Share) 40.6% Other
Hallmark Cards Inc. 40.4% SOURCE: WWW.IBISWORLD.COM
Player Performance Founded in 1910, Hallmark Cards Inc. ownership stake in the publicly listed (Hallmark) is a family-owned and Crown Media, which owns and operates Hallmark Cards Inc. operated company with headquarters in the Hallmark Channel, a cable TV Kansas City, MO. Hallmark publishes network. Crown Media also owns Crayola Market Share: 40.4% more than 65,000 card varieties and LLC, which produces Crayola brand Industry Brand Names introduces 10,000 new or redesigned crayons. In 2013, the company entered Hallmark cards yearly to more than 40,000 retail into an agreement with CaringBridge, a Shoebox outlets in the United States. The nonprofit that assists friends and family Sunrise Greetings company maintains 2,000 certified during any type of health-related event. Ambassador Hallmark Gold Crown stores, which The collaboration has enabled the includes many stores that are companies to create co-branded content independently owned and operated. designed to provide information that Manufacturing facilities in Kansas families can share, thus creating a produce most of the greeting cards supportive community network. offered in the United States, although cards that require handwork are Financial performance manufactured by the company’s suppliers Due to the company being privately held, located in Asia. Greeting Cards and Other Publishing Hallmark employs more than 30,000 industry-specific revenue is estimated. employees worldwide, including more Over the five years to 2019, IBISWorld than 17,000 part-time employees. In expects Hallmark’s industry-specific addition, the company has a majority revenue to rise at an annualized rate of
Hallmark Cards Inc. (US industry-specifi c segment) - fi nancial performance* Revenue Operating Income Year ($ million) (% change) ($ million) (% change) 2014 1,528.2 N/C 118.1 N/C 2015 1,488.1 -2.6 102.5 -13.2 2016 1,626.0 9.3 145.7 42.1 2017 1,765.6 8.6 126.3 -13.3 2018 1,884.8 6.8 128.9 2.1 2019 1,873.6 -0.6 127.9 -0.8
*Estimates SOURCE: IBISWORLD
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Major Companies
Player Performance 4.2% to reach $1.9 billion. Industry- US-based Hallmark facilities. continued relevant growth has been supported by a Furthermore, the company has slashed shift in consumer preferences toward operational costs by consolidating premium products such as Hallmark’s manufacturing facilities and increasing Signature card line. Additionally, the production volume. These cost-cutting company has secured more retail measures, which include layoffs and contracts in recent years, with Hallmark outsourcing manufacturing, have also gaining over 20 new customer contracts enabled an improvement in company or contract renewals in 2016 (latest profitability during the current period. available data). The company has focused Hallmark’s North American division on streamlining its greetings product eliminated more than 1,000 positions in development process by combining many the United States over the past five years, operations from Hallmark Canada into stemming losses in company profit.
Player Performance Founded in 1906, American Greetings 60.0% ownership stake in AGC in April Corporation (AGC) is a manufacturer and 2018, with the Weiss Family retaining a distributor of greeting cards and other 40.0% stake in the business. American Greetings social expression products, which Prior to the beginning of the period, Corporation includes gift wrap, party goods, AGC acquired Recycled Paper Greetings Market Share: 19.0% stationery and gifts. Headquartered in Inc. and Papyrus brand greeting cards, a Industry Brand Names Cleveland, AGC employs 24,800 people high-end line of cards and stationery; the American Greetings and operates production facilities in the two are now united as the AGC Gibson Southeast region of the United States. In subsidiary Papyrus-Recycled Greetings Recycled Paper Greetings 2013, the Weiss family, who previously Inc. Despite growing competition from Papyrus owned a small share of the company, low-value cards, these acquisitions have Carlton Cards incurred $612.0 million in costs from helped improve AGC’s average card acquiring AGC, taking the company’s prices. Prior to the current period, AGC operations private. Most recently, private sold its retail operations segment, which investment firm Clayton, Dubilier & Rice owned 341 card and gift retail stores, to (CD&R) completed the acquisition of a Schurman Retail Group; this company
American Greetings Corporation (US industry-specifi c segment) - fi nancial performance** Revenue Operating Income Year* ($ million) (% change) ($ million) (% change) 2014-15 927.0 N/C 66.6 N/C 2015-16 911.7 -1.7 105.0 57.7 2016-17 832.2 -8.7 51.7 -50.8 2017-18 813.4 -2.3 48.3 -6.6 2018-19 816.7 0.4 48.4 0.2 2019-20 805.9 -1.3 46.9 -3.1
*Year-end February, **Estimates SOURCE: ANNUAL REPORT AND IBISWORLD
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Major Companies
Player Performance operates stores under the American growth. The acquisitions of Papyrus and continued Greetings, Carlton Cards and Papyrus Recycled Paper Greetings Inc. prior to brand names. In 2012, the company the current period have helped stem acquired Clinton Cards PLC, one of the company losses. AGC has also invested largest specialty retailers for greeting in new opportunities and innovations cards in the United Kingdom. In fiscal for its online businesses. To stay 2016 (year-end February), the company competitive both within the industry derived 48.0% of its total revenue from and with external substitutes, AGC has everyday greeting cards, compared with grown its interactive online business and 25.0% being derived from seasonal expanded into social media. Customers greeting cards, gift packaging and party can now send greetings from AGC’s goods (18.0%) and other products (9.0%) website to their friends and family on (latest data available). Facebook, in addition to e-mail greetings. In terms of company Financial performance profitability, AGC is expected to benefit Over the five years to fiscal 2020, AGC’s during the outlook period from CD&R’s Greeting Cards and Other Publishing expertise in corporate restructuring. The industry-specific revenue is expected to deal, which closed right in time for the decline at annualized rate of 2.8% to start of AGC’s fiscal year, is anticipated $805.9 million. Overall, the company to improve the company’s long-term has performed in line with industry operating performance by raising profit trends, with the decline in demand for margins and provide a fresh start in a industry products stifling revenue stagnating market.
Other Company CSS Industries Inc. (CSS) began as the products include memory books, Performance City Stores Company in 1923 and scrapbooks, stationary, stickers, ribbons primarily dealt with department store and bows and floral accessories. Its Craft operations. However, after filing for line includes ribbons, trims, sewing CSS Industries Inc. bankruptcy and liquidating its assets the patterns and other craft supplies. In fiscal Market Share: 4.3% group reinvented itself as a creative 2018, the company reported generating consumer products company, the majority of its revenue (66.0%) distributing a wide range of craft and gift through its gift and craft product lines. consumer products in the United States, The rest of the CSS’s revenue is generated the United Kingdom and Australia. by its sale of seasonal products. In fiscal Additionally, the group has 2018, 24.0% of the company’s total manufacturing and distribution facilities revenue was generated through throughout Asia, as well as a purchasing Christmas related sales, within its office in Hong Kong, and employs a total Seasonal product line. The company of 2,000 individuals worldwide. CSS operates in the Greeting Cards and Other offers a wide range of gift packaging Publishing industry primarily through its items through its Seasonal division, publication of greeting cards and other including ribbon, greeting cards, stationary related products. However, wrapping paper, gift card holders, CSS’s acquisition of the Simplicity valentines and other novelty items. Creative Group (Simplicity) and The Through its Gift segment, the company McCall Pattern (McCall) company in offers products meant to celebrate life’s 2017 and 2016 respectively, substantially various special occasions. Some of these increased the group’s market share. Both
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Major Companies
Other Company of these acquired enterprises are major $64.0 million, adding to the company’s Performance publishers of sewing patterns, an net sales. IBISWorld estimates that continued industry relevant product. In fiscal 2018, industry relevant revenue will reach sales from Simplicity and McCall totaled $199.7 million in the fiscal year 2020.
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Capital Intensity For every dollar spent on wages in 2019, the Greeting Cards and Other Publishing Capital Intensity industry is expected to incur $0.10 in Capital units per labor unit Level capital costs. While the Greeting Cards 0.5 The level of capital and Other Publishing industry overall is intensity is Low typified with a low level of capital 0.4 intensity, it varies considerably between 0.3 companies and product segments within the industry. For example, some industry 0.2 operators include manufacturing and 0.1 distributing products in their operations, 0.0 whereas others outsource manufacturing Economy Information Greeting Cards to focus on product development. Over & Other Publishing the past five years, the industry has Dotted line shows a high level of capital intensity become increasingly capital intensive. SOURCE: WWW.IBISWORLD.COM Online card sales have become significantly more important for industry reach out to increasingly tech-savvy companies in recent years, as e-card consumers. These operators have sales are becoming a valuable way to invested in more technological
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Operating Conditions
Capital Intensity infrastructure, such as computers and technologies have enabled operators to continued servers, to host the e-commerce lower their required employees, thus platforms that sell these greeting cards streamlining costs and improving online. Furthermore, laborsaving operational efficiency.
Technology and Implementing new technologies enables Hallmark previously used technology Systems operators in the Greeting Cards and Other that was paper-based and required Publishing industry to compete with workers to manually operate the system. Level competitor industries such as e-cards. New technology has enabled Hallmark to However, electronic media and social insert barcodes and pricing onto card The level of networking websites will continue to templates as well. Additionally, technology change affect demand for yearbooks, particularly Hallmark’s Card Create system is Medium from universities. The growing use of streamlines the design and production electronic organizers, such as personal process, which reduces error and requires digital assistants and cell phones, has a smaller administrative workforce. adversely affected demand for paper- Innovations, such as using electrical based organizers and calendars. Also, circuits and small electronic widgets, e-mail, social websites and cell phone have enabled industry operators to messaging lowers demand for postcards. implement interactive design elements. Within the greeting cards product This technology can be applied to segment, using customized software manufacturing cards with touch-sensitive solutions automates the card design components, creating a market niche for process and streamlines efficiency. interactive greeting cards. Touch- Hallmark Cards Inc. (Hallmark) sensitive components enable industry automates its process of composing operators to manufacture greeting cards individual card design layouts by using with innovative components like software that inserts 8,000 card designs microphones, light-emitting diodes onto the card template before printing. (LEDs) and recording features.
Revenue Volatility Revenue for the Greeting Cards and Additionally, consolidation in Other Publishing industry is affected downstream markets such as by national trends in consumer supermarkets and grocery stores, which Level spending, which is not particularly retail greeting cards, have increased their The level of volatile. Demand for some products, ability to leverage low prices. As a result volatility is Low such as greeting cards and yearbooks, of this trend, industry revenue growth is often seasonal. Nevertheless, this has been constrained. Over the five years industry covers a wide range of to 2019, the price of paper, a key input products, which reduces revenue commodity for the industry, is expected volatility. However, greeting cards, to have risen; this has increased input calendars and planners are all commodity costs for many publishers. examples of industry products that While this trend has added to revenue fluctuate on a seasonal basis. Typically, volatility for the industry, it was these products generate high sales mitigated by operational efficiencies from volumes at the end of the calendar year automation, which cut production costs, or during holidays. keeping the overall level of volatility low.
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Operating Conditions
Revenue Volatility continued
Regulation and Policy There is relatively light regulation with applicable laws and regulations, applicable to the Greeting Cards and and these efforts have not generally had Other Publishing industry. Industry adverse effects on the industry’s Level & Trend players are subject to federal, state and financial condition, cash flows or The level of local environmental laws and regulations operating results. Intellectual property Regulation is related to product safety, chemical use, law is also important to industry Light and the air emissions, waste generation, the operators. For example, the major trend is Steady handling, management and disposal of greeting card companies have a variety of waste and remediation of contaminated copyrights, patents and registered sites. The industry’s major players have trademarks to protect the value of their all implemented operations to comply products and brands.
Industry Assistance Other than intellectual property law, there work to control the copying of that work. is no other significant assistance provided Industry operators may file for a patent, to the Greeting Cards and Other although their greeting card has to have a Level & Trend Publishing industry. Greeting card functional or mechanical aspect to be The level of companies have a variety of copyrights, patent eligible. Licensing of copyrighted Industry Assistance patents and trademarks, as greeting card trademarks and designs can also generate is Low and the designs and verses are protected by revenue. In the United States, the law that trend is Steady copyright. A copyright is the legal governs copyrights is Title 17 of the United exclusive right of the author of a creative States code, commonly cited as 17 USC.
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Industry Data Industry Print advertising Revenue Value Added Establish- Wages Domestic expenditure ($m) ($m) ments Enterprises Employment Exports Imports ($m) Demand ($b) 2010 6,318.7 1,902.3 1,018 956 20,424 -- -- 1,327.3 N/A 46.5 2011 6,019.2 1,772.3 991 943 21,607 -- -- 1,308.8 N/A 45.3 2012 5,757.9 1,649.0 822 781 17,777 -- -- 1,084.7 N/A 44.1 2013 5,367.9 1,412.5 840 765 21,836 -- -- 966.9 N/A 42.0 2014 5,195.2 1,439.1 808 774 21,944 -- -- 940.3 N/A 38.2 2015 5,039.0 1,343.4 814 779 20,548 -- -- 925.1 N/A 34.5 2016 4,977.0 1,261.8 816 778 19,740 -- -- 853.6 N/A 32.3 2017 4,843.1 1,322.6 790 753 19,288 -- -- 833.4 N/A 30.2 2018 4,719.6 1,257.7 766 730 18,869 -- -- 814.7 N/A 29.2 2019 4,642.2 1,236.3 745 709 18,532 -- -- 800.4 N/A 27.8 2020 4,550.6 1,210.7 733 698 18,289 -- -- 788.8 N/A 26.7 2021 4,460.1 1,178.9 719 685 17,909 -- -- 772.5 N/A 25.5 2022 4,380.4 1,156.1 706 673 17,554 -- -- 757.5 N/A 24.4 2023 4,293.3 1,128.5 692 660 17,196 -- -- 742.2 N/A 23.4 2024 4,205.1 1,100.5 677 645 16,841 -- -- 726.9 N/A 22.6 Sector Rank 33/37 33/37 31/37 25/37 29/37 N/A N/A 32/37 N/A N/A Economy Rank 607/694 615/694 568/694 539/694 587/694 N/A N/A 593/694 N/A N/A
Annual Change Industry Establish- Domestic Print advertis- Revenue Value Added ments Enterprises Employment Exports Imports Wages Demand ing expenditure (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) 2011 -4.7 -6.8 -2.7 -1.4 5.8 N/A N/A -1.4 N/A -2.6 2012 -4.3 -7.0 -17.1 -17.2 -17.7 N/A N/A -17.1 N/A -2.6 2013 -6.8 -14.3 2.2 -2.0 22.8 N/A N/A -10.9 N/A -4.8 2014 -3.2 1.9 -3.8 1.2 0.5 N/A N/A -2.8 N/A -9.0 2015 -3.0 -6.7 0.7 0.6 -6.4 N/A N/A -1.6 N/A -9.7 2016 -1.2 -6.1 0.2 -0.1 -3.9 N/A N/A -7.7 N/A -6.4 2017 -2.7 4.8 -3.2 -3.2 -2.3 N/A N/A -2.4 N/A -6.5 2018 -2.6 -4.9 -3.0 -3.1 -2.2 N/A N/A -2.2 N/A -3.3 2019 -1.6 -1.7 -2.7 -2.9 -1.8 N/A N/A -1.8 N/A -4.8 2020 -2.0 -2.1 -1.6 -1.6 -1.3 N/A N/A -1.4 N/A -4.0 2021 -2.0 -2.6 -1.9 -1.9 -2.1 N/A N/A -2.1 N/A -4.5 2022 -1.8 -1.9 -1.8 -1.8 -2.0 N/A N/A -1.9 N/A -4.3 2023 -2.0 -2.4 -2.0 -1.9 -2.0 N/A N/A -2.0 N/A -4.1 2024 -2.1 -2.5 -2.2 -2.3 -2.1 N/A N/A -2.1 N/A -3.4 Sector Rank 31/37 31/37 33/37 33/37 30/37 N/A N/A 30/37 N/A N/A Economy Rank 633/694 623/694 661/694 661/694 632/694 N/A N/A 630/694 N/A N/A
Key Ratios Imports/ Exports/ Revenue per Share of the IVA/Revenue Demand Revenue Employee Wages/Revenue Employees Average Wage Economy (%) (%) (%) ($’000) (%) per Est. ($) (%) 2010 30.11 N/A N/A 309.38 21.01 20.06 64,987.27 0.01 2011 29.44 N/A N/A 278.58 21.74 21.80 60,572.96 0.01 2012 28.64 N/A N/A 323.90 18.84 21.63 61,017.04 0.01 2013 26.31 N/A N/A 245.83 18.01 26.00 44,280.09 0.01 2014 27.70 N/A N/A 236.75 18.10 27.16 42,849.98 0.01 2015 26.66 N/A N/A 245.23 18.36 25.24 45,021.41 0.01 2016 25.35 N/A N/A 252.13 17.15 24.19 43,242.15 0.01 2017 27.31 N/A N/A 251.09 17.21 24.42 43,208.21 0.01 2018 26.65 N/A N/A 250.12 17.26 24.63 43,176.64 0.01 2019 26.63 N/A N/A 250.50 17.24 24.88 43,190.16 0.01 2020 26.61 N/A N/A 248.82 17.33 24.95 43,129.75 0.01 2021 26.43 N/A N/A 249.04 17.32 24.91 43,134.74 0.01 2022 26.39 N/A N/A 249.54 17.29 24.86 43,152.56 0.01 2023 26.29 N/A N/A 249.67 17.29 24.85 43,161.20 0.01 2024 26.17 N/A N/A 249.69 17.29 24.88 43,162.52 0.01 Sector Rank 30/37 N/A N/A 31/37 26/37 10/37 34/37 33/37 Economy Rank 392/694 N/A N/A 386/694 353/694 205/694 448/694 615/694
Figures are in inflation-adjusted 2019 dollars. Rank refers to 2019 data. SOURCE: WWW.IBISWORLD.COM Provided to: Emerald Expositions (2134005483) | 08 October 2019 WWW.IBISWORLD.COM Greeting Cards & Other Publishing in the US May 2019 33
Industry Financial Ratios Apr 2017 - Mar 2018 by company revenue Apr 2014 - Apr 2015 - Apr 2016 - Apr 2017 - Small Medium Large Mar 2015 Mar 2016 Mar 2017 Mar 2018 (<$10m) ($10-50m) (>$50m)
Liquidity Ratios Current Ratio 1.8 1.5 1.2 1.5 1.5 1.6 n/a Quick Ratio 1.1 0.9 0.9 1.1 1.0 1.2 n/a Sales / Receivables (Trade Receivables Turnover) 10.9 9.4 12.2 11.0 13.1 10.2 n/a Days’ Receivables 33.5 38.8 29.9 33.2 27.9 35.8 n/a Cost of Sales / Inventory (Inventory Turnover) 16.2 17.2 19.4 11.8 119.2 5.5 n/a Days’ Inventory 22.5 21.2 18.8 30.9 3.1 66.4 n/a Cost of Sales / Payables (Payables Turnover) 12.9 9.8 10.7 7.7 9.3 7.1 n/a Days’ Payables 28.3 37.2 34.1 47.4 39.2 51.4 n/a Sales / Working Capital 12.1 16.5 20.6 17.6 9.6 11.4 n/a
Coverage Ratios Earnings Before Interest & Taxes (EBIT) / Interest 9.6 6.5 5.7 6.5 17.7 4.6 n/a Net Profit + Dep., Depletion, Amort. / Current Maturities LT Debt n/a n/a n/a n/a n/a n/a n/a
Leverage Ratios Fixed Assets / Net Worth 0.3 0.8 0.3 0.6 0.1 0.3 n/a Debt / Net Worth 1.3 2.8 2.1 3.5 2.0 1.6 n/a Tangible Net Worth 18.0 18.9 11.8 15.5 10.3 24.5 n/a
Operating Ratios Profit before Taxes / Net Worth, % 30.6 22.8 18.8 25.5 n/a 25.5 n/a Profit before Taxes / Total Assets, % 9.3 5.6 7.0 8.4 15.4 5.6 n/a Sales / Net Fixed Assets 40.8 25.2 40.7 22.0 51.2 14.4 n/a Sales / Total Assets (Asset Turnover) 2.1 2.2 2.3 2.2 2.6 1.8 n/a
Cash Flow & Debt Service Ratios (% of sales) Cash from Trading 53.8 55.3 53.7 52.3 n/a 52.3 n/a Cash after Operations 9.3 6.3 7.4 6.3 n/a 5.9 n/a Net Cash after Operations 9.3 5.8 8.7 7.4 n/a 6.5 n/a Cash after Debt Amortization 3.6 0.4 4.0 1.9 n/a 1.6 n/a Debt Service P&I Coverage 6.6 2.1 5.5 5.3 n/a 3.4 n/a Interest Coverage (Operating Cash) 13.1 6.1 13.2 12.8 n/a 11.7 n/a
Assets, % Cash & Equivalents 18.2 12.2 20.3 22.2 31.6 17.7 n/a Trade Receivables (net) 20.6 25.7 21.8 20.3 17.4 22.4 n/a Inventory 20.2 13.8 18.3 18.6 18.2 19.8 n/a All Other Current Assets 4.4 4.5 4.7 3.0 4.4 1.5 n/a Total Current Assets 63.4 56.2 65.2 64.0 71.6 61.5 n/a Fixed Assets (net) 12.4 14.8 13.6 15.8 14.9 17.5 n/a Intangibles (net) 13.7 14.9 11.1 12.3 5.0 12.6 n/a All Other Non-Current Assets 10.5 14.1 10.2 7.9 8.5 8.5 n/a Total Assets 100.0 100.0 100.0 100.0 100.0 100.0 n/a Total Assets ($m) 964.1 1,024.4 896.9 791.8 28.8 319.9 443.2
Liabilities, % Notes Payable-Short Term 8.9 6.7 13.6 6.9 12.5 4.0 n/a Current Maturities L/T/D 2.0 2.9 4.1 2.6 1.0 3.3 n/a Trade Payables 12.8 16.6 17.8 17.4 13.9 21.9 n/a Income Taxes Payable 0.1 0.2 n/a 0.1 n/a n/a n/a All Other Current Liabilities 12.0 19.2 20.1 25.4 32.3 17.5 n/a Total Current Liabilities 35.8 45.6 55.7 52.5 59.7 46.8 n/a Long Term Debt 14.4 13.9 12.9 16.5 25.0 11.1 n/a Deferred Taxes 0.2 0.4 0.1 0.1 n/a n/a n/a All Other Non-Current Liabilities 17.9 6.3 8.5 3.1 n/a 5.0 n/a Net Worth 31.7 33.8 22.9 27.8 15.3 37.1 n/a Total Liabilities & Net Worth ($m) 964.1 1,024.4 896.9 791.8 28.8 319.9 443.2
Maximum Number of Statements Used 49 51 49 37 13 17 7
Source: RMA Annual Statement Studies, rmahq.org. RMA data for all industries is derived directly from more than 260,000 statements of member financial institutions’ borrowers and prospects. Note: For a full description of the ratios refer to the Key Statistics chapter online.
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Jargon & Glossary
Industry Jargon E-CARD A digital greeting card selected online (free or PERSONAL DIGITAL ASSISTANT (PDA) A mobile for a fee) that is sent to the recipient via e-mail. device that functions as a personal information ELECTRONIC ORGANIZER A small calculator-size manager. computer, often with a built-in diary application and SMARTPHONE A mobile phone that offers advanced other functions, such as an address book and calendar. PC-like capabilities. LICENSING A way for a publisher to permit others to use the publisher’s (owner’s) designs or images on their products, while the owner keeps control of the copyright.
IBISWorld Glossary BARRIERS TO ENTRY High barriers to entry mean that INDUSTRY CONCENTRATION An indicator of the new companies struggle to enter an industry, while low dominance of the top four players in an industry. barriers mean it is easy for new companies to enter an Concentration is considered high if the top players industry. account for more than 70% of industry revenue. CAPITAL INTENSITY Compares the amount of money Medium is 40% to 70% of industry revenue. Low is less spent on capital (plant, machinery and equipment) with than 40%. that spent on labor. IBISWorld uses the ratio of INDUSTRY REVENUE The total sales of industry goods depreciation to wages as a proxy for capital intensity. and services (exclusive of excise and sales tax); subsidies High capital intensity is more than $0.333 of capital to on production; all other operating income from outside $1 of labor; medium is $0.125 to $0.333 of capital to $1 the firm (such as commission income, repair and service of labor; low is less than $0.125 of capital for every $1 of income, and rent, leasing and hiring income); and labor. capital work done by rental or lease. Receipts from CONSTANT PRICES The dollar figures in the Key interest royalties, dividends and the sale of fixed Statistics table, including forecasts, are adjusted for tangible assets are excluded. inflation using the current year (i.e. year published) as INDUSTRY VALUE ADDED (IVA) The market value of the base year. This removes the impact of changes in goods and services produced by the industry minus the the purchasing power of the dollar, leaving only the cost of goods and services used in production. IVA is “real” growth or decline in industry metrics. The inflation also described as the industry’s contribution to GDP, or adjustments in IBISWorld’s reports are made using the profit plus wages and depreciation. US Bureau of Economic Analysis’ implicit GDP price INTERNATIONAL TRADE The level of international deflator. trade is determined by ratios of exports to revenue and DOMESTIC DEMAND Spending on industry goods and imports to domestic demand. For exports/revenue: low is services within the United States, regardless of their less than 5%, medium is 5% to 20%, and high is more country of origin. It is derived by adding imports to than 20%. Imports/domestic demand: low is less than industry revenue, and then subtracting exports. 5%, medium is 5% to 35%, and high is more than EMPLOYMENT The number of permanent, part-time, 35%. temporary and seasonal employees, working proprietors, LIFE CYCLE All industries go through periods of growth, partners, managers and executives within the industry. maturity and decline. IBISWorld determines an ENTERPRISE A division that is separately managed and industry’s life cycle by considering its growth rate keeps management accounts. Each enterprise consists (measured by IVA) compared with GDP; the growth rate of one or more establishments that are under common of the number of establishments; the amount of change ownership or control. the industry’s products are undergoing; the rate of technological change; and the level of customer ESTABLISHMENT The smallest type of accounting unit acceptance of industry products and services. within an enterprise, an establishment is a single physical location where business is conducted or where NONEMPLOYING ESTABLISHMENT Businesses with services or industrial operations are performed. Multiple no paid employment or payroll, also known as establishments under common control make up an nonemployers. These are mostly set up by self-employed enterprise. individuals. EXPORTS Total value of industry goods and services sold PROFIT IBISWorld uses earnings before interest and tax by US companies to customers abroad. (EBIT) as an indicator of a company’s profitability. It is calculated as revenue minus expenses, excluding IMPORTS Total value of industry goods and services interest and tax. brought in from foreign countries to be sold in the United States.
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Jargon & Glossary
IBISWorld Glossary VOLATILITY The level of volatility is determined by WAGES The gross total wages and salaries of all averaging the absolute change in revenue in each of the employees in the industry. The cost of benefits is also continued past five years. Volatility levels: very high is more than included in this figure. ±20%; high volatility is ±10% to ±20%; moderate volatility is ±3% to ±10%; and low volatility is less than ±3%.
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