Shutterfly 2014 Annual Report Download - page 52

Download and view the complete annual report

Please find page 52 of the 2014 Shutterfly annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 130

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130

to consolidate all of our locations in the greater Phoenix area as well as offer flexibility for
future expansion. We expect this new facility to be operational in 2015.
• During 2014, we successfully completed the migration of our data center from California to a
new co-location facility in Las Vegas, Nevada over the course of 22 total moves. Our new data
center will help improve storage capacity, speed, resiliency, and costs over the next several
years.
• In addition, we significantly grew our Enterprise segment as we added additional programs
with existing customers and added new customers.
In 2015, we have prioritized specific areas to continue our focus on long term strategic priorities and
investments in consumer facing programs and infrastructure projects that will provide future scale and
scope efficiencies. These included the following:
• In 2015, we are beginning a 15 to 18 month process to build the next generation of Shutterfly:
a world-class memory management service connected to our personalized e-commerce
solutions. This project will incorporate our ThisLife service directly into Shutterfly.com and
consolidate our ThisLife and Shutterfly mobile apps. We believe this will enable the company
to accelerate the rate of adoption of ThisLife’s features and functionality through a simpler
customer experience (one service, one site, one set of apps, and one well-known brand) and
drive greater usage and monetization. In addition, we intend to move the TinyPrints and
Wedding Paper Divas technology base to this new Shutterfly platform. Currently, we are
duplicating investments in the Cards & Stationery and Photo Gift/Home D´
ecor businesses
across two distinct technology platforms, forcing us to make trade-offs on features and
functionality which increases time to market, cost and complexity. We will continue to invest
in the Tiny Prints and Wedding Paper Divas brands and consumer facing capabilities but our
brands will be supported by a common set of shared technology services, including cart,
checkout, creation paths, login, address book and media storage platform.
• In 2015, we decided to discontinue the Treat brand. Treat was originally launched as an early
stage growth initiative over three years ago, and during that time we invested in building a
distinct one-to-one card experience that has delighted our customers, but that failed to attract
a large enough standalone user base. Therefore, beginning on March 18, 2015, customers will
no longer be able to place an order on Treat.com or access the Treat mobile app. However
they will be redirected to Shutterfly.com where we will enhance the one-to-one card
experience under our flagship brand identity.
• In 2015, we decided to close our manufacturing operations at the Elmsford, NY facility which
was acquired with the MyPublisher acquisition. Although the Elmsford team produced a high
quality product, the small size of the facility relative to our other facilities limited its ability to
scale and drive efficiencies. Over the next few months, the manufacturing work done in
Elmsford will be transitioned to our Fort Mill, Phoenix and Shakopee facilities. We will
officially cease manufacturing operations and customer service in Elmsford at the end of July
2015. While the back-end manufacturing operations for MyPublisher will be distributed to our
three larger facilities, the MyPublisher brand will continue to operate as a key part of our
portfolio of brands, with business, technology, and marketing operations remaining in
Elmsford and New York City.
51