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“My parents went to New York, and all I got what this lousy t-shirt.” Sound familiar? It should! Well not “ New York ” and “t-shirt” per se, but the exclamation should at least ring a bell. With an estimated 85,702 U.S. establishments, the gift, novelty, and souvenir shop industry is huge, and no matter where you go, chances are you will come across several of these shops. This immense industry generates $21.4 billion, continues to grow annually, and employs more than 300,000. Wow!

The gift, novelty, and souvenir shop industry is highly fragmented; it is characterized more by the diversity of products than similarities among industry leaders. Classified among them are:

• -balloon shops
• -art crafts
• -gift baskets
• -party favors
• -greeting cards
• -souvenir shops
• -trading cards (sports memorabilia)
• -holiday decorations
• -other novelty shops

In 2003, editors from Gifts & Decorative Accessories identified the top three most popular products sold: greeting cards (46%), holiday items (39%) and frames (38%).

How has the greeting card industry fared with the emergence of e-mail? Interestingly enough, the Greeting Card Association states that “the increased use of electronic forms of communications seems to be bolstering rather than reducing sales of traditional greeting cards.” How is this possible? Sociologists conclude “the Internet allows people to maintain a greater number of relationships.” These relationships are thus strengthened by traditional greeting cards, for they “establish an emotional connection that can be saved and cherished”.

With so many establishments in the industry, one has to wonder how these shops become and remain profitable? Several factors contribute to this but the most profitable stores are found in high tourist areas. Customers coming to a specialty shop expect to pay higher prices, seek a better shopping experience, demand better service and wish to “make a connection” at the local level. In sum, the specialty retailer has to be more aggressive in courting today's consumer, competing offensively.

References:

The Greeting Card Association (trends)

Source: http://www.greetingcard.org/thegreetingcard_trends.html

Gift Novelty and Souvenir Shops

Source: http://www.referenceforbusiness.com/industries/Retail-Trade/Gift-Novelty-Souvenir-Shops.html

Gifts & Decorative Accessories' - State of the Industry

Source: http://www.giftsanddec.com/article/CA230066.html?text=state+of+the+industry

Zapdata.com

Source: http://www.zapdata.com/HomePage.do

Industry Snapshot: Gift and Greeting Card Stores

Take a look at our full industry report on gift and greeting card stores (PDF Format). If you are interested in other industry snapshots, visit our SBDC Business Advisors' Toolkit.

Links of Interest

The Greeting Card Association- http://greetingcard.org/

Trends in the industry- http://greetingcard.org/thegreetingcard_trends.html

Resources for owning and operating a card and gift shop- http://greetingcard.org/resources_pubs.html

Starting a Greeting Card Business- http://www.powerhomebiz.com/guide/cases/cheryl.htm

Gifts & Decorative Accessories for news and new products plus a "State of the Industry" report (registration required)- http://www.giftsanddec.com

Publications from Museum Store Association including the Museum Retail Industry Report for purchase- http://www.museumdistrict.com/pubs/MSAPublications.cfm

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Are You Paying Attention to
Demographic Trends?

The 2005 Hispanic percentage population estimates for the top five states were as follows:

43.2% New Mexico ( 1,914,908)

35.2% California ( 36,430,227)

34.5% Texas ( 22,865,855)

28.1% Arizona ( 5,854,746)

22.0% Nevada ( 2,391,581)

2005 estimates from Experian & Applied Geographic Solutions (shown partially above) are not yet available for states directly and indirectly impacted by Hurricane Katrina.

The following states offer the respective projections for Hispanic population growth from 2005 to 2010:

35.8% Georgia

34.0% Nevada

33.0% North Carolina

29.3% South Carolina

29.1% Virginia

28.9% Kentucky

28.1% Arizona

27.9% District of Columbia

27.1% Oregon

26.5% Alabama

The only two states projecting a Hispanic percentage increase of less than 10% during this same time period are:

9.0% New Mexico

3.1% West Virginia

Source: Applied Geographic Solutions powered by SRC

by J. Eric Lomeli

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