Vistaprint 2010 Annual Report Download - page 22

attract customers who have historically purchased printed products and graphic design services
through traditional printing operations and graphic design businesses or who have produced graphic
design and printed products using self-service alternatives. Furthermore, we may have to incur
significantly higher and more sustained advertising and promotional expenditures or price our services
and products more competitively than we currently anticipate in order to attract additional online
consumers to our websites and convert them into purchasing customers. Specific factors that could
prevent prospective customers from purchasing from us include:
• concerns about buying graphic design services and marketing products without
face-to-face interaction with sales personnel;
• the inability to physically handle and examine product samples;
• delivery time associated with Internet orders;
• concerns about the security of online transactions and the privacy of personal information;
• delayed shipments or shipments of incorrect or damaged products; and
• the inconvenience associated with returning or exchanging purchased items.
We may not succeed in promoting, strengthening and continuing to establish the Vistaprint
brand, which would prevent us from acquiring new customers and increasing revenues.
Since our products and services are sold primarily through our websites, the success of our
business depends upon our ability to attract new and repeat customers to our websites in order to
increase business and grow our revenues. For this reason, a primary component of our business
strategy is the continued promotion and strengthening of the Vistaprint brand. In addition to the
challenges posed by establishing and promoting our brand among the many businesses that promote
products and services on the Internet, we face significant competition from graphic design and printing
companies marketing to micro businesses who also seek to establish strong brands. If we are unable
to successfully promote the Vistaprint brand, we may fail to increase our revenues. Customer
awareness of, and the perceived value of, our brand will depend largely on the success of our
marketing efforts and our ability to provide a consistent, high-quality customer experience. To promote
our brand, we have incurred and will continue to incur substantial expense related to advertising and
other marketing efforts. We may choose to increase our branding expense materially, but we cannot
be sure that this investment will be profitable. Underperformance of significant future branding efforts
could materially damage our financial results.
A component of our brand promotion strategy is establishing a relationship of trust with our
customers, which we believe can be achieved by providing a high-quality customer experience. In
order to provide a high-quality customer experience, we have invested and will continue to invest
substantial amounts of resources in our website development and technology, graphic design
operations, production operations, and customer service operations. We also redesign our websites
from time to time to attract customers. Our ability to provide a high-quality customer experience is
also dependent, in large part, on external factors over which we may have little or no control, including
the reliability and performance of our suppliers, third-party carriers and communication infrastructure
providers. If we are unable to provide customers with a high-quality customer experience for any
reason, our reputation would be harmed, and our efforts to develop Vistaprint as a trusted brand
would be adversely impacted. The failure of our brand promotion activities could adversely affect our
ability to attract new customers and maintain customer relationships, and, as a result, substantially
harm our business and results of operations.
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