Hallmark's AI Strategy: Preservationist Innovation and the Invisible Algorithm

Hallmark Spent 115 Years Selling Effort, Then AI Showed Up

TLDR: Hallmark adopted a unique AI strategy they call “Preservationist Innovation.” Instead of using AI to generate messages, they focused it on optimizing their supply chain, inventory, and workflows, keeping the AI invisible to the customer and preserving the human-to-human sentiment that is core to their product.

Summary: This case study presents a fascinating counter-narrative to the typical corporate AI adoption story. While competitors rushed to deploy generative AI for writing messages, Hallmark made a deliberate choice to use AI to augment everything but the words on the card. Their leadership recognized that the value of a greeting card is the perceived effort and human sentiment behind it, and that automating the message itself would devalue the product. Instead, they applied machine learning to the unglamorous but critical backend operations: supply chains, inventory management, and logistics. This approach, which they term “Preservationist Innovation,” is a masterclass in understanding what parts of a business AI should and shouldn’t touch.\n For architects and business leaders, Hallmark’s strategy offers a crucial lesson: AI should remove friction, not add it. A failed experiment with QR-code-based video greetings taught them that interrupting an emotional moment with technology is a losing proposition. Their successful “Sign & Send” feature, which uses computer vision to digitize and print a handwritten message, works because the AI is invisible to the user. The customer experiences convenience, not an algorithm. Furthermore, their custom-built “Recipient Graph” outperforms standard e-commerce recommendation engines by creating profiles for the people receiving the cards, not the buyer. This allows them to make contextually relevant suggestions based on relationship history, a moat that generic platforms can't easily replicate. The author is missing the point that Hallmark's private ownership structure allows them to play the long game, a luxury most public companies can't afford.

Key takeaways:

• Hallmark’s “Preservationist Innovation” strategy uses AI to protect the human core of their product.
• AI should be used to remove friction, not add it to the customer experience.
• Making the AI invisible to the user can be a powerful strategy.
• Standard e-commerce recommendation logic often fails in gifting scenarios where the buyer is not the end-user.
• Building custom data models like a “Recipient Graph” can create a significant competitive advantage by tracking relationship history.

Link: Hallmark Spent 115 Years Selling Effort, Then AI Showed Up