Print-and-paper Hallmark faces digital era challenges
Philadelphia — Hallmark turned 108 years old last month.
With more than a century as an emotional connector, the conglomerate with $4 billion in annual sales creates 10,000 new and redesigned greeting cards every year. On Valentine’s Day, this Wednesday, Hallmark’s busiest day of the year along with Mother’s Day, it plans to roll out new vinyl record cards, with 45 rpm discs.
There also are Hallmark movies, home and decor products, accessories, and clothing for women and babies. It even acquired the Crayola brand out of Easton, Northampton County, in 1984.
Hallmark spokeswoman Jaci Twidwell said that “Our company has endured and prospered because we address the need to strengthen relationships and foster emotional connections. Needs that consumers will always have.”
Mary Fran Bontempo of Southampton, Pa., a Hallmark loyalist, agrees: “Does anyone think anything else when they think cards? They tug at your heart, make you laugh, and those darn commercials make you cry. ... Hallmark is the grand dame of card companies. They are my go-to for sentimental touching and heartfelt messages.”
The Kansas City, Mo.-based company’s products are distributed in Walgreens, CVS, Walmart, Kroger, Tesco in the United Kingdom, and dozens of grocery store chains and online through Hallmark.com and Amazon.com. Beginning next year, Hallmark products will also be sold in all Dollar Tree stores.
But some say the family-owned firm has muddied its brand with shoppers and been slow to innovate online. They question whether a company founded in 1910 on sentimentality through the written word can thrive in the digital world.
“Hallmark is a classic example of a brand and retailer being upended by shifts in consumer habits, and is battling two separate and massive trends at the same time,” said Andrew Blachman, chief operating officer of Tophatter.com — a shopping app. “First, anchor tenants at shopping malls have been shuttering as consumers find what they need online, which has reduced foot traffic that smaller stores like Hallmark rely on. Second, Hallmark may have strong brand recognition, but brand matters to consumers much less today than it did a decade ago, especially with younger shoppers.”
Hallmark employs 28,000 worldwide through its six divisions. It sells gift wrap and greeting cards in more than 30 languages with distribution in more than 100 countries and 100,000 stores. Its biggest competitor is American Greetings Corp.
Hallmark Retail operates 2,000 Hallmark Gold Crown stores in five countries.
In 2000, the company formed Crown Media to compete in the television entertainment space. Crown Media Family Networks includes three cable TV channels — Hallmark Channel, Hallmark Movies & Mysteries, and Hallmark Drama — as well as Hallmark Movies Now, a subscription video on-demand service, and Hallmark Publishing.
A recent study of U.S. consumer companies’ brand reputations put the Hallmark brand on its top-10 list. With a score of 82.4 points, it ranked No. 4 behind Rolex, Sony, and Lego, according to the 2017 Consumer RepTrak report from the Reputation Institute, a research and advisory firm.
Placing No. 4 was a drop for Hallmark’s brand from No. 2 in 2016. The biggest decline in its reputation came from a 5-point decrease in its measurement of “delivers on its promise.”
Hallmark’s old message was about “when you care enough to send the very best,” and it offered “a promise of caring, quality, great service, premium, and personal expression,” noted Stephen Hahn-Griffiths, the institute’s chief research officer. A Hallmark moment “is highly emotional.”
But in late 2015, he said, “Hallmark walked away from that” to focus on rational messages involving choice, value, connecting, and self-help,” he said. “Hallmark was also slow to deliver on innovation, and was late to the e-cards business relative to American Greetings, Blue Mountain, its competitors.”
Hallmark’s new slogan — “when you care enough, you can change the world” or #CareEnough — was introduced last year.
“It’s a real time of confusion for Hallmark of what they are trying to do and what they really stand for,” said Pamela Danziger, president of Unity Marketing, a marketing consulting firm in Lancaster County, who recently wrote a white paper on Hallmark. “When consumers start asking who you are and what you are trying to do is really disastrous for a brand.”
Twidwell argues that because of its diversified portfolio, Hallmark can touch more people than ever, and that the brand is embracing the online world. With Hallmark.com, she said, consumers can “purchase online and pick it up at a participating Hallmark Gold Crown store the same day, typically within three hours.”
Twidwell said the company’s revenues have been flat at $4 billion for the last two years. But she said that cards still occupy the most square footage in Hallmark Crown stores and the most aisle space in department stores that carry the brand.
Hallmark is selling cards with age/word wheels, cards for coins and bills, cards with food, cards with seeds, cards featuring properties, cards with sound, recordable cards, cards with attachments/gifts and cards with gift cards.
This year’s Valentine’s Day offerings include on-trend vinyl record greeting cards that the company says have been popular with millennials. Hallmark is also partnering with singer Michael Bublé and actor-singer Taye Diggs to help promote its premium card line Signature.
Most of the 107 independently owned Hallmark Gold Crown stores in Pennsylvania are concentrated in the Pittsburgh and Philadelphia areas. There are 68 Gold Crown stores in the Philly region, including South Jersey.
Twidwell cited the latest statistic from the trade group Greeting Card Association, that more than six billion greeting cards continue to be exchanged annually — with about half given in person, and half sent through the mail.
“Consumers today are more focused on connecting with others than ever before through social media posts and texting,” Twidwell said. “But consumers tell us that when they really want to show someone they care, greeting cards with handwritten notes inside often are the preferred source of communication.
“Personal, heartfelt connections help cut through today’s digital clutter.”