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Greeting cards amp up sales with sound technology

BY Mike Duff

Greeting cards sales may have slowed, but they continue to advance despite—and maybe even because of—the recession, as consumers remain determined to make personal connections.

Research firm Mintel estimated that greeting card sales grew by 3.9% in 2008, after a period of healthy expansion from 2004 when expensive, specialized cards contributed significantly. An increasingly acute consumer focus on value in the recession has eroded growth, however, and Mintel expected only a 1.5% gain in 2009, followed by a gradual upturn to 2.5% in 2010 and 2.8% in 2011.

Yet, trends suggested that opportunities exist in both inexpensive and more elaborate greeting cards. Dick Byrns, a USA Drug buyer, said he has been working with American Greetings and Hallmark category managers to fine-tune greeting card offerings, with one result being that music cards are “blowing off the shelves. The 99-cent cards always sell, but they have all the merchandisers out there for the music cards, and we’re going to go over resets. And, in our larger stores, we’re probably going to put in at least 4-ft. sets of strictly the music cards. It may be an 8-ft. set, but it will probably be a 4-ft. endcap wrap around.”

Walgreens spokeswoman Vivika Vergara noted, “Sound cards continue to sell well and are holding their own. While customers seem to purchase the 99-cent cards, many still traded up to the sound-recording cards.”

Innovation can sell in the recession, suppliers said. American Greetings just introduced sound-wired envelopes designed as value-added substitutes for plain paper mailers provided with a card. Music available ranges from “What I Like About You” by The Romantics to “Happy Birthday.” At $3.49, said American Greetings spokesman Frank Cirillo, the envelopes can affordably enhance an inexpensive card. They also demonstrate how the company takes such innovative features as sound enhancement and then learns to manufacture them more efficiently and drive them down the range of price points.

Recent innovations, Cirillo said, include cards with a button controlling a range of sound effects. Yet, technology is not an end in itself. “It’s just a way to enhance the experience of receiving and sending a card. It makes it a little more personal and special,” he said.

Hallmark recently upgraded its lower-end cards to make them more attractive to consumers whose budgets might otherwise make them marginal purchases. “Our age-old desire to reach out to one another is always important, especially in times of difficulty,” said spokeswoman Sarah Kolell. “We want to be able to provide a great selection of 99-cent cards. We revised them in March with more dye-cut cards, more glitter cards.”

Hallmark is balancing the value that cards offer consumers and what they regard as valuable in a product. “We’re finding that the things consumers regard as valuable are things like a child’s voice on a Mother’s Day card,” Kolell said.

Fun is valuable, too, and Hallmark’s Big Time Cards—a line that provides special merchandising fixtures for specialty and drug stores, including Walgreens—has enjoyed a strong response. “We do hear from consumers that at times they end up giving cards as opposed to gifts today, and most people agree that the card does have an intrinsic emotional value,” Kolell said.

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Kroger declares quarterly dividend

BY Michael Johnsen

CINCINNATI The Kroger Co. announced that its board of directors declared a quarterly dividend of 9 cents per share to be paid on Sept. 1 to shareholders of record at of the close of business on Aug. 14.

Kroger, one of the nation’s largest retail grocery chains, employs more than 326,000 associates, who serve customers in 2,475 supermarkets and multi-department stores in 31 states.

On Thursday, the company announced that its president and COO Don McGeorge was retiring. McGeorge has been replaced by W. Rodney McMullen.

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Walgreens to test diabetes care model

BY DSN STAFF

NEW YORK Walgreens continues to flesh out its revamped strategy to be the nation’s most convenient and accessible provider of pharmacy and health-and-wellness services.

 

The latest plank in that platform is its plan to test a pharmacy-driven outreach and support program for patients with diabetes.

 

Diabetic-care services and product presentations are nothing new in the nation’s chain and independent drug stores; every pharmacy leader knows that diabetes is a major, (often undiagnosed) health challenge and a “gateway” disease that usually subjects its sufferers to a slew of other related conditions involving the circulatory system, the skin and other organs. It’s also no secret that diabetics generate far more in annual drug store sales to treat these related conditions.

 

What makes Walgreens’ pilot program worthy of notice are two things.

 

 

First, with some 6,800 retail pharmacies, 350 in-store and worksite clinics and a network of specialty pharmacies across the United States, the company wields enormous potential power in the healthcare marketplace. If it expands its fledgling diabetes pilot beyond the test stage, it has thousands of “points of care” through which it could offer diabetes support programs and other disease management offerings. It’s a huge potential resource to offer diabetic patients and their employer-based or government-sponsored health plans, not to mention those patients’ overburdened, time-constrained primary care doctors.

 

 

Second, Walgreens is very deliberately positioning its diabetes care offering as a part of a much broader, integrated healthcare platform that links patients in the program to all the company’s health-and-wellness capabilities, said Walgreens CEO Greg Wasson. And it dovetails neatly with the Obama administration’s call for “more preventive care and better access,” in the words of Walgreens’ top manager.

 

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