A team of employees from card maker American Greetings Corp. have a romantic Valentine's weekend all planned. The workers will cozy up in a remote, underground location in cages with computer servers, making sure millions of electronic expressions of love do not go astray.
The electronic card business is still figuring out where it fits into the greeting card social scene, but this Valentine's Day -- when Americans, including kids in classrooms who send a lot of them, are expected to exchange nearly a billion cards -- may provide more clues to the answer.
Some consumers have embraced the idea of sending digital dancing pigs and animated Cupids to loved ones for a fee, while traditionalists wouldn't dream of it, even for free. But faced with new low-price competition from dollar stores and deep discounters for traditional cards, the nation's two biggest card companies are counting on a big e-Valentine Day and betting their online services will help them expand their businesses.
Feb. 14 is Hallmark.com's busiest single day of the year. In 2003, the online arm of the Kansas City, Mo., card giant recorded 2.6 million visits to its site. Cleveland-based American Greetings' new media subsidiary, AG Interactive, is projecting a 1,500 percent increase on Valentine's Day over a typical day. The tech staff has been preparing for two months.
"This is our best chance for getting some new eyes," said Andrea Santangeloa spokeswoman for AG Interactive.
Americans send an estimated 7 billion traditional greeting cards annually worth nearly $7.5 billion in retail sales, according to the Greeting Card Association. Christmas accounts for the biggest concentration, followed closely by Valentine's, which one research group projects will account for $950.5 million worth of cards this year.
Electronic cards have been around since the 1990s, but they represent only 6 percent of the greeting-card market and have not threatened to dent sales of traditional cards.
In fact, after 2000, e-cards followed the high-tech industry into a decline. Last year the numbers seem to rebound, and this year offers a chance to see whether that was a fluke or if e-cards have found a niche. American Greetings, the world's largest publicly owned creator, maker and distributor of so-called social expressions products, depends heavily on the paper cards that it distributes in tens of thousands of U.S. and international card shops, drug stores and anywhere else someone might need the right message.
But while rival, privately held Hallmark dominates the traditional U.S. card market with an estimated 50 percent share, American Greetings is making a bid to own the as-yet-unproven electronic side.
Through sites such as AmericanGreetings.com, Egreetings.
com and BlueMountain.com, the Cleveland company, by one analyst's estimate, now creates roughly 75 percent of all electronic cards supplied on the Internet. Nielsen/NetRatings ranked those as three of the top four greeting card sites the first week of this month, with a total of 1.79 million visits.
American Greetings has had some difficulty figuring out a working e-business model. It started out in the late 1990s selling electronic cards, then switched to free cards in 2000 to compete with an explosion of free e-card providers. After acquiring both Egreetings.com and BlueMountain.com, the company still offers a selection of free e-cards, but it is committed to convincing consumers to buy subscriptions for access to the latest, coolest designs dreamed up by a staff of 20 creative types in Cleveland.
More than 2 million subscribers paid American Greetings last year for e-cards, up from 1.9 million in fiscal 2003. Setting a basic membership at $13.95 a year for unlimited access to more than 8,000 cards, the company churns out fresh cards monthly.
The division, which turned profitable in fiscal 2003, has spent the past year adding interactive touches, such as cards that can be personalized with the sender's own voice and cards that accept several photo additions rather than a single photo. A new "7 ways to say I love you" card sends a different greeting every day for a week, plus coupons for things like romantic walks and a movie date.
Hallmark offers more than 1,000 free electronic greetings. Its Web store is aimed at directing business to the bricks-and-mortar Hallmark Gold Crown retail stores as well as selling flowers and gifts online.
"There are very different strategies for the two sites," said Kathleen M. Reed, an analyst who follows the greeting card industry at Stanford Group Co. in Houston.
There may be room for both strategies. Despite early fears that the Internet would replace traditional cards, Reed argues electronic greetings may serve a different type of card buyer. More than 80 percent of traditional card purchasers are women over 45. E-cards tend to be sent by adults under 40, often in their teens or 20s. Men account for more than 40 percent of all e-cards sent.
"We do not believe electronic cards will replace traditional card-sending for important events such as birthdays, weddings, etc., where many consumers keep the social expression product as a memory for sentimental reasons," Reed wrote in a recent research report on American Greetings. Neither she nor her firm own shares in the company or do investment banking business with it.
E-cards may instead have a future as a supplement to gifts and candy, and as a way to spread a little love to family and friends both on Valentine's and on other non-major holidays such Groundhog Day.
The e-card styles available, rather like those in card shops, can range from schmaltzy to sexy, sleazy to sweet. Hallmark has one that shows a heart monitor speeding up as the giver explains what happens when he/she is walking, running and then being with a "groovy cat like you," complete with images of a dancing cat. Various e-card sites have games involving Cupid and shooting arrows.
Slippery Rock University senior Tosha Costabile loves finding an ecard from a friend in her electronic mailbox. "If you're having a bad day, it brightens up your day," she said.
E-cards help her keep in touch with friends over the summer and family when she is at school. Costabile said she will ship e-Valentines to her parents in Uniontown and maybe her best friend at college in Johnstown.
E-card providers estimate only 5 to 10 percent of their Valentine's offerings are actually romantic. While true love may require high-quality paper, ribbons and lace that will outlast many relationships, electronic greetings seem to be perfect for those not in the throes of passion. A month ago, BlueMountain.com added a "Love Stinks" selection to serve a market the company noticed choosing similar anti-Valentine cards at its other sites.
Costabile likes the cute designs and convenience of sending electronic cards, but she has not been willing to pay for them yet. "I use free cards," she said, pleading college student poverty. She has noticed that more sites seem to be going to subscriber systems and that some of the best designs are no longer available to users like her.
Not long ago, a site called Sugarqube.com made the switch, leaving some free "everyday" cards available but explaining to users that a small annual fee will allow it to offer high-quality, animated greeting cards.
Costabile sent a free e-Valentine's Day card to her boyfriend in Monroeville but she wouldn't dream of leaving it at that. "I buy the gifts, the cards, the poems," she added reassuringly.