Rising postal rates and e-cards will threaten industry profitability
Los Angeles, CA (PRWEB) December 09, 2013
The greeting card retailing industry includes sales for greeting cards from all major retail channels, including specialty stores, general merchandisers and internet retailers. Over the five years to 2013, technology has rapidly altered the competitive landscape for greeting card retailers, as rising external competition from digital greeting cards, along with the emergence of social media, has hampered revenue growth. To this end, greeting card retailers have struggled to compete against external competitors that provide similar products at a more affordable price. In addition, demand for greeting cards is expected to decline as postage rates trend higher during the five-year period.
According to the Greeting Card Association, 60.0% of greeting cards are sent through the United States Postal Service. As such, rising postage rates likely exacerbated consumers' shift toward digital substitutes. As a result, IBISWorld expects revenue for the greeting card retailing industry to decline at an annualized rate of 1.9% to $6.0 billion over the five years to 2013, weighed down by an anticipated 1.8% drop in the greeting card retailing industry revenue in 2013.
According to IBISWorld Industry Analyst Brandon Ruiz, “In addition to rising external competition, greeting card retailers have struggled to capture a younger customer base, which has also contributed to the declines in overall revenue.” In the past, consumers went to brick-and-mortar novelty shops or department stores to purchase greeting cards; however, consumers aged 24 and younger are increasingly deferring to digital services instead. Younger demographics are also opting to use social media websites, such as Facebook, as a substitute for purchasing greeting cards.
Greeting card retailers are expected to continue to suffer during the five years to 2018, due to rising postal rates and the growing popularity of e-cards. “Nevertheless, there are individual retail segments that are expected to thrive, supporting industry profit margins in the process,” says Ruiz.
For example, internet retailer's share of overall revenue is expected to increase as more consumers have access to the internet and retailers develop a stronger web presence. Additionally, disposable income is expected to increase, which will likely cause consumers to purchase more costly greeting cards that are more profitable for retailers. Nevertheless, IBISWorld expects industry revenue to fall over the five-year period.
The greeting cards retailing industry has a low market concentration. Furthermore, the different kinds of retail segments have varying degrees of concentration. For instance, the gift shop retail segment, which brings in the most market-specific revenue, is very fragmented, thereby reducing overall market concentration. In the five years to 2013, the market has become more concentrated. In particular, drug chain stores, supermarkets, supercenters and warehouse clubs have taken over a greater portion of market revenue.
For more information, visit IBISWorld’s The Retail Market for Greeting Cards in the US industry report page.
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IBISWorld industry Report Key Topics
Companies in the greeting cards retailing industry sell greeting cards. This report shows the size of the retail market for this product and includes sales from all major retail channels, including specialty stores, general merchandisers and internet retailers.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.