Shutterfly 2014 Annual Report Download - page 8

8x8 hardcover photo books in just minutes. We also launched our first Tiny Prints mobile
app allowing customers to explore, create and send customized holiday cards, stationery,
and gifts from their iPad.
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.
We intend to continue our efforts to make improvements in our platform and
infrastructure including our big data strategy and analytics, e-commerce development,
and manufacturing scale and automation. In particular, the scale and scope economies
from our vertically integrated manufacturing and supply chain enable us to extend our
competitive position and improve overall customer satisfaction, further strengthening the
barriers to success in our industry. In August 2014, we opened our new production facility
in Shakopee, Minnesota, which provides us with production facilities in the Midwest, to
round out our current West and East capabilities. Also in August, 2014, we began
construction of our new Tempe, Arizona production facility which is expected to be
operational in mid-2015, and which will consolidate all of our Arizona operations. In June
2013, we opened our new state-of-the-art production facility located in Fort Mill, South
Carolina, tripling our Southeast manufacturing footprint, reducing the time to market for
new product introductions and enabling greater in-sourcing of our order volumes. We
believe that this expanded manufacturing footprint provides a level of redundancy in our
manufacturing network and supply chain, further supports our scale needs and fulfillment
strategies, and ultimately increases customer satisfaction levels.
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.
•Expand and enhance our brand equity.
We seek to delight our customers by offering robust solutions and to expand and enhance
our brand equity through all consumer touch points — marketing, business development,
multi-brand site experiences and customer service. Throughout 2014, we deployed dozens
of highly integrated channel campaigns with a balance of direct response and brand
awareness that generated increased marketing efficiencies and enabled the company to
reach new levels of brand awareness and engagement. For example, in April, we
announced a cause marketing relationship with Baby2Baby, a non-profit that supports low
income babies and families, with a Mother’s Day event that included celebrity moms
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