Shutterfly 2014 Annual Report Download - page 5

exceptional customer service. Tiny Prints makes it easy for customers to connect, keep in touch and
transform life’s joys into lasting impressions.
Wedding Paper Divas offers stylish and personalized save the dates, wedding invitations, thank you
cards, bridal invitations and more — all designed by leading artists in the industry. Unlike most
stationery brands, which simply provide a something-for-anyone offering, Wedding Paper Divas works
with talented artists all over the country to translate the hottest new trends into perfectly unique
products. Regardless of style or budget, Wedding Paper Divas offers better-than-boutique service with
one-on-one design and etiquette expertise from wedding stationery specialists. Wedding Paper Divas
uses the highest quality paper and offers a promise of complete satisfaction.
ThisLife is a new service that gathers and organizes photos and videos and makes it easy to find,
share and enjoy them anywhere. Its smart technology includes facial recognition, search functionality
and easy photo importing. With ThisLife, our customers can easily manage their photos and find just the
ones they want to turn into Shutterfly photo books, cards and gifts.
MyPublisher is where our customers can create custom photo books, share great memories and tell
their stories using their own photos. MyPublisher allows our customers to create, customize and share all
of their favorite moments. We have a variety of book sizes for any occasion from our smallest Mini
Books and Pocketbooks to our larger Classic Hardcovers and Deluxe Hardcovers.
BorrowLenses is a premier online marketplace for high-quality photographic and video equipment
rentals. This service includes photo and video equipment rentals, sales of used photo and video
equipment, exceptional customer service and dependable and convenient shipping and pick-up options.
We generate the majority of our revenues by producing and selling professionally-bound photo books,
greeting and stationery cards, personalized calendars, other photo-based merchandise and high-quality
prints ranging in size from wallet-sized to jumbo-sized 20x30 enlargements. We manufacture most of these
items in our Fort Mill, South Carolina, Phoenix, Arizona, and Shakopee, Minnesota production facilities.
In 2013, we entered into a lease for a new production facility in Tempe, Arizona, which is expected to be
operational in 2015. By controlling the production process in our own production facilities, we are able to
produce high-quality products, innovate rapidly, maintain a favorable cost structure and ensure timely
shipment to customers, even during peak periods of demand. Additionally, we sell a variety of photo-based
merchandise that is currently manufactured for us by third parties, such as calendars, mugs, canvas prints,
mouse pads, magnets, and puzzles. We generate substantially all of our revenue from sales originating in
the United States and our sales cycle has historically been highly seasonal as we generate more than 50%
of our total net revenues during our fiscal fourth quarter.
Our high-quality products and services and the compelling online experience we create for our
customers, combined with our focus on continuous innovation, have allowed us to establish premium
brands. We realize the benefits of premium brands through high customer loyalty, low customer acquisition
costs and premium pricing.
Our customers are a central part of our business model. They generate most of the content on our
service by uploading their photos and storing their memories. In addition, they share their photos
electronically with their friends and families, extending and endorsing our brand and creating a sense of
community. Finally, by giving our branded products to colleagues, friends and loved ones throughout the
year, customers reinforce our brands. Through these various activities, our customers create a viral
network of new users and customers.
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