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Focus On: American Greetings

BY Seth Mendelson

Know the consumer, officials at American Greetings say, and you will be successful in the social expression category at retail.

That is the angle officials at the 112-year-old company are taking these days as it and the category seek to stay, not only relevant, but crucial to the success of brick-and-mortar retailers in the future.

It is no secret that the greeting cards market has been under pressure since the dawn of the digital age nearly 20 years ago. Consumers now have many choices to get their messages to their friends and family, and many industry officials worried that greeting cards would join film, music and books as a victim of the Internet and its power to quickly connect people.

Actually, it never happened. As officials at the Cleveland-based company noted, the social expression category has held steady through the years, now generating as much as $6 billion in annual sales on two billion unit sales, and helping retailers build sales and profits. Perhaps as importantly, the category has served to help retailers develop an image at crucial times of the year, including Valentine’s Day, Mother’s and Father’s Day and the fourth-quarter holiday season.

But it has not been easy. “We have really emphasized the need to focus on who the customer is and what he or she wants from our category,” said Steve Laserson, senior vice president for North American sales at American Greetings. “We spend a great deal of time and money making sure we know who our consumer is and learning about their evolving tastes and preferences.”

That is not as easy as it sounds. While older consumers have long used greeting cards as their first choice to communicate with someone for a holiday or event, younger consumers, including those hard-to-define and attract millennials, have somewhat different needs when it comes to the category.

“Years ago, we made the decision to look ahead and develop the strategy to get to know what consumer preferences were and what they were going to become,” said Laserson, an American Greetings employee since 1995. “It quickly became pretty clear that they did not want the same things as their parents. We then took the approach that we had to develop a portfolio that was more attractive to a diverse consumer base.”

In their research, American Greetings officials found that younger consumers have different ways of communicating with other people, want their personalities to shine through more often and are more emotional with their feelings. Products were created to satisfy the needs of this growing and much more discerning group of shoppers.

“These consumers are much more discriminating when it comes to picking cards, especially since they have so many different ways of reaching people,” he said. “Even the younger men are more engaged than older men are. We have to work harder to find the right products for these shoppers.”

Working with retailers to maximize sales in the category also is at the top of the agenda for American Greetings officials. Stressing that the category always is in a rapid state of change and becoming more complex by the moment, Laserson said that company executives go to great lengths to work with merchants to develop the right assortment of product, promotions, displays and timing, and to give them advice on how to attract more shoppers into the section and the store, in general.

American Greetings sales reps can work with retailers to merchandise their stores on an individual basis, basing the size of the department and the selection of product on store demographics and shopping patterns. “We realize how important it is for the retailer to make a special connection with the consumer with greeting cards,” Laserson said. “This is a very different category than any other in the store because of the level of partnership with retailers and the level of trust they put in our company.”

The intricacies of the category, which include cards, gift packaging, stationery and party goods,  make it that much more important for a good working relationship between greeting card manufacturers and retailers. “We think we have become much more valuable to the retailer over time, especially as the greeting cards category has become more complex,” he said. “Many retailers look to us today to balance this all out for them. We have become a much more important partner with them in a very consultative way.”

Laserson noted the value of the social expression category to enhance the image for the entire store, especially during key holiday periods. Placing the social expression section near the front of the store, in a highly visible location, will go a long way to helping the retailer define the moment at hand. “Greeting cards signal the season,” he said. “When consumers see Valentine’s Day cards in the set, for example, it sets the tone for the overall store and allows the retailer to build sales in other categories.”

Of course, that also is a call from Laserson to encourage retailers to create secondary displays for cards throughout the store, including near the perimeter sections and with the related floral category. “We have no doubt that these displays will lead to incremental sales for the retailer from greeting cards and from other sections of the store,” he said.

And, he believes that American Greetings is well-positioned to be the industry leader in this category. Though founded in 1906, the company experienced its major growth late in the last century, both organically and through the acquisition of other companies. It purchased Gibson Greetings in the 1990s and followed that up with the purchase of both Papyrus and Recycled Greetings in 2009.

Currently, American Greetings, a fourth-generation family-owned business, operates five plants in Arkansas, Kentucky and Tennessee. The company employs around 5,000 full-time workers and 13,000 part-time workers, with many working at retail locations throughout the country setting up the section’s planogram.

So what does the future look like? Laserson said it is excellent, surprisingly adding that digital greeting cards can complement traditional greeting cards and help lead to more retail sales. Noting that the Internet has increased communications between people, he said that the company is taking steps to keep consumers engaged in both platforms.

“I think we are in a great spot right now,” he said. “We are super focused on the consumer and their needs, and we offer a broad portfolio of brands that create a significant advantage for our retailers. Together, we think that offers a great vehicle to keep our company growing, while satisfying the end user and our retail partners.”

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Fred’s names Anto CFO

BY David Salazar

Fred’s has a new executive overseeing its finances. The Memphis, Tenn.-based company has named Joseph Anto its executive vice president and CFO, effectively immediately. He succeeds Jason Jenne, who will remain in an advisory capacity until Feb. 26 to ease the transition.

“We are pleased to welcome Joe to the Fred’s team full time,” Fred’s CEO Mike Bloom said. “Joe’s experience and expertise is invaluable as we continue to implement our strategic initiatives to drive increased traffic and comp sales, reduce SG&A, generate free cash flow and optimize our balance sheet. Joe is a proven financial and business development executive, and brings a diverse set of skills and experience that will help position Fred’s for long-term success.”

Anto was most recently senior vice president of strategy and M&A at MediaNews Group, where he had worked in various capacities since 2013. At MediaNews Group, he was involved in efforts to drive digital revenue and reduce organization expenses. In addition to his experience at MediaNews Group, Anto will bring to the company seven months’ experience of working with Fred’s, with which he has been working in a consulting capacity. As CFO, he will oversee the company’s financial and risk management, information technology and real estate strategy.

“I am thrilled to join Fred’s at this important time in the Company’s transformation,” Anto said. “I look forward to working with Mike and the rest of the senior leadership team as we develop and execute on the strategic priorities that will deliver long-term sustainable growth, cash flow and value creation.”

Bloom also thanked Jenne for his work at Fred’s. “On behalf of the Board of Directors and the entire Company, I thank Jason for his contributions to Fred’s as well as his continued support during this transition period. We wish Jason all the best in his future endeavors.”

 

 

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ProFoot comes to the rescue

BY DSN STAFF

ProFoot is expanding its Heel Rescue line with the addition of Heel Rescue Epsom Salt Foot Gel. Officials at the Brooklyn, N.Y.-based company said that Epsom salt is a remedy used as aaloe vera to relieve muscle aches and pains as well as reduce inflammation.

The epsom salt gel joins two other products in the Heel Rescue line — a moisturizing foot cream and foot peel.

The product comes in a gel form, making it an easy-to-use item that requires no foot bath. Company executives add that it is ultra-concentrated, offering seven times more uses versus a typical Epsom salt bag. They noted that it is made with 83% aloe vera to soothe, calm and moisturize, as well as cooling peppermint oil and wintergreen leaf extract to revive.

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