Shutterfly 2011 Annual Report Download - page 9

Competition
The market for digital photography products and services is large, evolving and intensely competitive, and we expect competition to
increase in the future. We face intense competition from a wide range of companies, including the following:
We believe the primary competitive factors in attracting and retaining customers are:
We believe that we compete favorably with respect to many of these factors, particularly customer trust and loyalty, quality and breadth of
products and services, and customer service. Many of our competitors promote their products on the basis of low prices or the convenience of
same-
day availability for digital photos printed in drugstores or other retail outlets. Generally, we distinguish ourselves from such competitors
principally on the basis of product quality and innovation, rather than price or same-day delivery.
Intellectual Property
Protecting our intellectual property rights is part of our strategy for continued growth and competitive differentiation. We seek to protect our
proprietary rights through a combination of patent, copyright, trade secret and trademark law. We enter into confidentiality and proprietary rights
agreements with our employees, consultants and business partners, and control access to and distribution of our proprietary information. We
have licensed in the past, and expect that we may license in the future, certain of our proprietary rights to third parties.
Table of Contents
● Online digital photography services companies such as Kodak EasyShare Gallery, Snapfish, which is a service of Hewlett-
Packard,
American Greetings
’
Photoworks and Webshots brands, Vistaprint, SmugMug, SeeHere and others;
● “Big Box” retailers such as Wal-Mart, Costco, Sam’
s Club and others that are seeking to offer low cost digital photography
products and services. These competitors provide in-store fulfillment and self-
service kiosks for printing, and may, among other
strategies, offer their customers heavily discounted in
-
store products and services that compete directly with our offerings;
●
Drug stores such as Walgreens, CVS/pharmacy and others that offer in
-
store pick
-
up from their photo website internet orders;
●
Regional photography companies such as Ritz Camera that have established brands and customer bases in existing photography
markets;
●
Internet portals and search engines such as Yahoo!, AOL, and Google that offer broad
-
reaching digital photography and related
products and services to their large user bases;
●
Home printing service providers such as Hewlett
-
Packard, Epson, Canon, Kodak and Fuji that are seeking to expand their printer
and ink businesses by gaining market share in the digital photography marketplace;
●
Photo
-
related software companies such as Apple, Microsoft, Corel, Picnik and FotoFlexer;
●
Social media companies that host images such as MySpace, Facebook, and Twitter;
●
Specialized companies in the photo book and stationery business such as Hallmark, American Greetings, Tiny Prints, Minted,
Picaboo, Blurb, MyPublisher, Mixbook, MOO, Smilebox, Creative Memories and Inkubook;
●
Photo hosting websites that allow users to upload and share images at no cost such as Picasa, Flickr, Photobucket and Slide; and
●
Self
-
publishing companies and services such as Lulu, CafePress, Amazon's CreateSpace and Zazzle.
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brand recognition and trust;
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quality of products and services;
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breadth of products and services;
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user affinity and loyalty;
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customer service;
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ease of use;
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convenience; and
●
price.
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