Pop-up greeting card displayed on a table by Lovepop.
Lovepop is seeking to disrupt a $7 billion-plus greeting card industry with its personalization offerings and unique artistic creations. — Lovepop

Why it matters:

  • Digital operations technology enables companies to respond to seasonal market fluctuations quickly and optimize inventories.
  • Personalized, innovative and tech-enhanced cards are the fastest-growing segment of the $7 billion greeting card market.
  • Lovepop is looking to carve a differentiated niche in the greeting card aisle with 3D cards that are customizable.

Lovepop, a maker of customizable 3D greeting cards backed by “Shark Tank” host Kevin O’Leary, is tapping inventory management technology to help handle the seasonality of its business and respond quickly to consumer trends.

The Boston-based company, founded by naval architects Wombi Rose and John Wise, grew from $300,000 in annual sales to $8.7 million after winning the backing of Leary, known as “Mr. Wonderful” on the “Shark Tank” TV series, in 2015, and sales have continued to grow in double digits.

“He [O’Leary] was definitely a key part of our success early on,” Dan Nephew, director of internal systems at Lovepop, told CO—. “He helped enable us to get to where we are today.”

The company has executed partnerships with major brands and events that include the Billboard Music Awards, The Walt Disney Co. and Henri Bendel.

Sales were up 44% year-over-year in 2020, Nephew said, and the company reached profitability.

 Headshot of Dan Nephew, director of internal systems at Lovepop.
Dan Nephew, director of internal systems, Lovepop. — Lovepop

Differentiating in the greeting card aisle via personalized, 3D art

With its high level of personalization and unique artistic creations, Lovepop is seeking to disrupt a $7 billion-plus greeting card industry, which has long been dominated by American Greetings and Hallmark.

Lovepop cards feature 3D art inspired by the paper sculpture technique known as kirigami, which the founders learned about on a trip to Vietnam. Lovepop calls the system it created Slicegami, a play on the term “sliceform” that is used in ship design.

Customers can order cards online and have them shipped directly to recipients with personalized messages inside, or they can be purchased at retail outlets such as Barnes & Noble, Kohl’s and The UPS Store, along with hundreds of smaller independent gift and card shops. Lovepop uses Shopify as its customer-facing e-commerce platform.

The company also has a strong business-to-business operation, through which companies order customized cards to send to their customer or clients, for example.

[More here on personalization and the other key trends redefining how consumers shop.]

[Inventory management technology] handles the volume, but it also is flexible enough to enable the nuances that make our business more special than anybody else in the marketplace.

Dan Nephew, director of internal systems, Lovepop

Tapping inventory management tech to navigate a highly seasonal business

Lovepop has built a highly responsive system for managing its inventory and production that helps it navigate the seasonal nature of the industry. Greeting card sales spike around certain holidays, particularly Mother’s Day, Valentine’s Day and the year-end holidays. Business can fluctuate from a few thousand orders per day during off-peak times to up to about 15,000-20,000 orders per day around key holidays.

Lovepop relies on digital operations technology to manage these demand fluctuations. It uses a system from Brightpearl that Nephew said enables the company to execute at a high level in several key areas.

“It handles the volume, but it also is flexible enough to enable the nuances that make our business more special than anybody else in the marketplace,” said Nephew. “We can do a lot of customizations. It's very easy to change, and very easy to integrate. It's been hugely helpful for us.”

The system allows Lovepop to analyze sales and inventory at a highly granular level, and quickly see what specific designs are selling best as the holidays approach. It can then respond to those demands by ramping up production on the more popular designs if necessary.

That helps the brand manage its inventory, “in the sense of, we don't have to get it right, right out of the gate,” said Nephew. “We can wait till we get some indicators in-season … because of the ability to understand our data, integrate it with our planning system, and then manage our inventory effectively in terms of keeping it low until we actually need it.”

Being able to respond quickly to market changes is a key advantage in any business, and Lovepop’s systems enable that agility, Nephew said.

“The last thing I want to do … is tell my partners in merchandising and marketing, ‘Sorry, I can't make that change. It's going to take six weeks,’ and then we miss an opportunity,” he said. “I think that's one of the things we will continue to always look for in systems.”

Lovepop owns its own manufacturing facility in Vietnam and ships product to facilities in the U.S. for the final customization process. Because its products are relatively light, Lovepop is able to use air freight—which is costlier than shipping by sea, but faster—to get inventory to its U.S. outposts quickly, Nephew explained.

The company partners with Excelsior Integrated for logistics and ships its cards to that company’s facilities on the East and West Coasts of the U.S., from which it then ships the individual cards across the U.S. as well as to Canada, the U.K. and Australia.

[Read here on how inventory management and supply chain savvy helped brands weather the pandemic.]

 Person opening a greeting card from Lovepop.
Lovepop's inventory management technology allows the company to analyze sales and inventory at a highly granular level, quickly seeing what specific designs are selling best. — Lovepop

Pandemic boosts greeting card market

Research from the Greeting Card Association estimates that Americans purchase approximately 6.5 billion greeting cards each year, with annual sales estimated between $7 billion and $8 billion. Online purchasing of physical cards has become increasingly popular, particularly among younger consumers, the GCA reported.

During the pandemic, greeting card sales got a boost from consumers who were otherwise unable to visit relatives in person, according to the GCA. Its research showed that 65% of consumers agreed that receiving cards and letters in the mail lifts their spirits, and 61% said receiving cards and letters in the mail has been especially important during this time of social distancing.

Cards such as those from Lovepop that include additional features are among the fastest-growing segment of the industry, the association said.

“Cards featuring intricate designs, special techniques and new technologies and innovations—such as the inclusion of sound chips and LED lights—as well as handmade cards, are at the top of the price scale, and represent the fastest growing segment of the market,” the GCA said in its 2020 report.

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