Shutterfly 2015 Annual Report Download - page 9

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customers dynamic mobile experiences and options for preserving their memories. Also in
2014, we continued to improve our mobile experience adding new features and functionality to
our existing apps on iOS, Android and Kindle devices. We completely redesigned our Share
sites iPhone app, added new styles, fonts and a dust cover options to our Photo Story iPad app
which we originally launched in 2013, and unveiled a “Super Simple Book” creation path on
our Shutterfly iPhone app, providing mobile users the ability to create, personalize and order a
20-page, 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, the percentage of revenues coming from mobile
sources for the Shutterfly brand increased to 13% from 10% in 2014. We improved our
customers’ mobile experiences, adding new features, functionality and products to apps in 2015
with new innovations such as a universal iOS mobile app. We also made several new products
available to mobile customers such as playing cards, fleece blankets, pillows and metal
ornaments. We will continue to introduce more features and products to mobile to capture the
growing mobile opportunity.
In 2015, we discontinued 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. However, customers will be redirected to Shutterfly.com where
we enhanced the one-to-one card experience under our flagship brand identity.
We also made progress toward our vision of creating a world-class memory management
service connected to the smartest personalized e-commerce solutions, what we’re calling
Shutterfly 3.0. By modernizing our technology platform and introducing new customer-friendly
features, we aim to address the friction points caused by multiple devices, fragmented storage
options, and limited organization and search capabilities for interacting with photos and videos.
The 3.0 initiative also includes delivering a better overall user experience with more products
and innovations to our customers. This experience will eventually be portable to partners,
enabling us to offer third parties the ability to leverage our platform to better serve their
customers. Phase one, integrating ThisLife into Shutterfly, is underway, and we will begin
migrating customers to the new, integrated platform in Q1 2016 and will continue this process
throughout 2016. ThisLife’s features and functionality will improve the customer experience
(one service, one site, one set of apps, and one well-known brand) and drive greater usage.
Concurrently, we will be making other improvements to our mobile capabilities and our site to
enable it to scale for the full 3.0 platform throughout 2016.
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. We made great progress in optimizing our manufacturing capabilities and supply
chain — the significant scale and scope economies from our vertically integrated manufacturing
and supply chain enable us to extend our competitive position, drive industry leading
profitability and improve overall customer satisfaction.
In the second quarter of 2015, we opened our new production facility in Tempe, Arizona,
adding a Southwest facility to the Shakopee, Minnesota Midwestern facility which opened in
second quarter of 2014 and the Southern Fort Mill facility in South Carolina opened in second
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