It's the weekend before Valentine's Day and the dozen or so shoppers at the American Greetings store in midtown Manhattan are wandering through a sea of Mylar balloons, heart-shaped tchotchkes, and rows upon rows of paper greeting cards. (Valentine's Day is the second-most-popular card holiday, behind Christmas and just ahead of Mother's Day.) The vast majority of shoppers are women, and only one appears to be under 40. The manager estimates that just 10% to 15% of customers are under the age of 20, prompting the adolescent sales clerk to hammer home that the clientele is predominately "middle-age women." That is not just anecdotal evidence but acknowledged fact at American Greetings, which generated $1.7 billion in 2007 revenues. Its annual report reveals that women buy 80% of the cards in the United States, and their median age is 47. Not exactly the Facebook crowd. To gen-Yers, a snail- mail card is as antiquated as getting a $5 birthday check from grandma.
But American Greetings isn't letting its business fade into sepia tones. "We sell emotions," says Rajiv Jain, CTO of American Greetings Interactive. "Even younger people need help saying better what they want to say." Enter Kiwee.com, AGI's repository for emoticons, video winks, postcards, graphics, widgets, and glitter text for all the major social-networking sites and instant-messaging services. Its content is being downloaded 1.2 million times per day, a harbinger of its parent company's adjustment to a world where paper cards are passé.
Kiwee and AGI are a consumer lab for American Greetings. A 47-year-old housewife may not be interested in the winking-turd emoticon that her 15-year-old son adores, but scrutinizing the root appeal of all the content — particularly, trend analysis on colors and language — can be used to create new greeting cards. "Sharing information lets all of us make better content," says Josef Mandelbaum, CEO of AGI.
The social messages also let the company experiment with new revenue models. "We tried a pay-per-piece model," Jain says, "but there's only a small percentage of people who wouldn't balk at paying." Plus, as he notes, following the real-world model of selling cards meant dealing with seven different currencies in 15 countries, and supporting 11 languages and a number of different payment types. Kiwee considered a subscription model, since AGI has had success selling e-card subscriptions (again, mostly to middle-age women); currently, 3.4 million people pay $14 a year for unlimited e-cards. But Kiwee's under-18 crowd "doesn't have a mechanism to pay."
So Kiwee has moved to advertising to generate revenue, attracting companies such as JCPenney,
In February, Kiwee attracted 12 million unique visitors. Young folks may not send paper anymore, but being remembered — that's universal.
A version of this article appeared in the May 2008 issue of Fast Company magazine.