Invitation from Paperless Post displayed on a tabletop with mini champagne bottles, glitter, and balloons.
Paperless Post's CEO and Co-founder James Hirschfeld explains how the COVID-19 pandemic downturn "created a period of innovation" and growth for the business. — Paperless Post

Why it matters:

  • Paperless Post’s revenues plunged 85% at the start of the pandemic, but new initiatives have returned sales to above pre-pandemic levels.
  • The company has launched a party supplies marketplace that lets party hosts buy paper goods and party supplies while sending out their invitations.
  • It also has invested in technology to enable customers to use text messaging for sending and managing invitations. Paperless Post’s pivots paid off: Revenues now exceed pre-pandemic levels.

When the pandemic hit in the spring of 2020, online invitations company Paperless Post saw its revenues plunge as birthday parties, weddings, and social gatherings were put on hold indefinitely.

But the 18-month-long pandemic downturn also triggered the company’s biggest period of innovation and growth, CEO and Co-founder James Hirschfeld told CO—.

“It’s kind of amazing to me that COVID created a period of innovation for our business, given that it was such a difficult time,” Hirschfeld said.

The company launched a party supplies marketplace that lets its customers pick out themed paper goods and decorations while planning their invitations. It also added text-messaging functions to its invitation options.

Paperless is moving beyond invitations at a time when other digital competitors also are looking to further monetize their customer bases with e-commerce.

Evite, a 25-year-old online invitation company, recently added links that let party guests order gifts for their hosts.

The global party supplies market is valued at over $12 billion, and demand for themed party goods is expected to drive much of the growth in the industry.

Paperless Post’s post-pandemic expansion into party goods proves ‘positive’

As Paperless Post’s party-invite mission of bringing people together was the opposite of social distancing, it was “kind of in the bullseye of the pandemic,” Hirschfeld said.

The pandemic presented Paperless Post with a key decision, he said.

“We could try to chase pandemic trends—for example, try to go after video events, or do what I chose to do, which was create an 18-month period where the company could really focus on who we wanted to be on the other side,” Hirschfeld said.

The company made the bet that the pandemic lockdowns wouldn’t last forever, and opted to invest in technology and new product offerings to drive post-pandemic growth.

Part of that strategy was the launch of its Party Shop, a marketplace for paper goods and party supplies that customers can pair with their online invitations for themed parties.

For example, for a dinosaur-themed child’s birthday, party hosts can order dinosaur paper plates, napkins, and cups, and even a T-rex pinata.

The strategy behind the launch of the Party Shop physical goods marketplace is to move beyond invitations into more aspects of the party planning process, Hirschfeld said.

The first thing hosts do when they are planning a party is to send out the online “save the date” message or invitation, Hirschfeld said, so Paperless Post has their attention at the moment when their intent to buy is highest.

“They come to us because they see us as authorities for design and style, so I’ve always been interested in helping these users follow through with the event and bring that vision to life in the physical world,” he said.

“We have a lot of know-how about the preferences of our users and what types of events they’re celebrating and we think a lot about design,” Hirschfeld said. “I’ve always been interested in pulling those pieces together into a commerce offering that could complement the software offering.”

The strategy behind the launch of the Party Shop physical goods marketplace is to move beyond invitations into more aspects of the party planning process.

James Hirschfeld, CEO and Co-founder, Paperless Post

The Party Shop marketplace offers goods from a curated selection of vendors. It started small with products for kid birthdays, added holiday last year, and has continued to expand into new categories.

“We’re really focused on proving out the unit economics and making sure we’re growing profitably before we start building it out more aggressively,” Hirschfeld said.

The initial response has been positive, he said, with roughly a third of the party hosts exposed to the Party Shop after creating an invitation clicking through and ordering supplies.

[Read: 5 Recession-Fighting Marketing Strategies From Walmart to McCormick Spices All Businesses Should Watch]

In the future, the marketplace could also be used to help guests discover and purchase gifts for the party host or guest of honor, or to connect party hosts with local service providers such as bakers or entertainers.

“When you think of that whole ecosystem of hosts and guests, it’s tens of millions of people a year,” Hirschfeld said.

Leaning into consumers’ shift to text messaging to fuel growth

Paperless Post added text messaging functions last year as a way tap into the growing shift to texting instead of emailing for communicating with a group of friends.

“We realized that rather than view this shift as a threat because we were email-based, we could view it as an opportunity, and we could harness the behavior and leverage text [messaging] for our product and grow,” Hirschfeld said.

“It’s been very, very popular,” he said. Now 40% of Paperless Post events use text messaging to some extent, “which is incredible adoption for a new product,” he said.

Users have the option to send an invitation both by email and text depending on their contact information or a guest’s preference.

Future innovations the company is working on include new invitation platforms for businesses and organizations to use for events.

Hirschfeld and his sister Alexa founded Paperless Post in 2009. Since then, over 175 million people have sent or received Paperless Post invitations, and it has been used for over 20 million events.

[Read: Work-From-Home Revolution Yields Opportunity for Local Small Businesses]

 James Hirschfeld, CEO and Co-founder of Paperless Post.
James Hirschfeld, CEO and Co-founder of Paperless Post. — Paperless Post

Pivots pay off: Revenues exceed pre-pandemic levels

As a private company, Paperless Post does not reveal its revenues, but revenues now exceed pre-pandemic levels, and it is profitable, Hirschfeld said. For events related to Halloween 2022, revenue was up more than 70% compared to 2019, according to a company spokesperson.

Hirschfeld said it is now clear that Paperless Post made the right bet that in-person events would come back stronger than ever.

Events came back in full force starting at the beginning of 2022, “and we started to see significant growth versus pre-pandemic,” he said. “Last year was a year of tremendous growth and the trajectory has been accelerating since then.”

“Part of the momentum that we’re seeing is a return of demand, but the other part is that we took the time when COVID was impacting the world to focus on building for growth,” he said.

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