Vistaprint 2010 Annual Report Download - page 8

Download and view the complete annual report

Please find page 8 of the 2010 Vistaprint 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 145

  • 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
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145

Market and Industry Background
The Marketplace for Micro Business Marketing Products and Services
We focus on providing marketing products and services for the micro business market,
generally businesses or organizations with fewer than 10 employees, and often with fewer than
5 employees. We believe that there are approximately 50 million businesses with fewer than
10 employees in the United States, Canada, and the European Union and that these micro
businesses undergo frequent changes with many forming and dissolving each year, creating a large
market for business identity products and services in addition to marketing products and services. We
also believe that, in response to the growth of the Internet and the emergence of digital production
technologies, micro businesses are shifting from traditional suppliers of customized marketing
products and media toward online alternatives.
In the past, a business seeking customized marketing products and services could either hire a
designer to develop and coordinate the production of marketing materials or produce printed materials
themselves using desktop software and an inkjet or laser printer. A designer can produce a
professionally coordinated portfolio of marketing products and services, but this is a significantly more
costly and time-consuming alternative, whereas traditional self-service typically produces less
sophisticated and lower quality output. We believe that neither alternative is convenient or cost-
effective for micro businesses, which typically lack the resources or skills to generate satisfactory
results using either approach.
Online commerce provides significant advantages and opportunities to micro business
customers seeking customized marketing products and services at affordable prices. These
customers do not typically need the large quantities that are traditionally required to achieve low
per-unit pricing and do not maintain dedicated procurement departments to negotiate pricing
effectively. We believe the high price, inconvenience and complexity of traditionally procuring
customized marketing products and services have historically dissuaded micro business customers
from purchasing these products and services. We believe that the highly fragmented, geographically
dispersed nature of the micro business market is ideally suited for Internet-based procurement, as the
Internet provides a standardized interface through web browsers, availability seven days a week,
24 hours a day, the ability to offer a wide selection of products and services, and the opportunity to
efficiently aggregate individual orders into larger and more efficient production units.
We believe that the micro business market has been underserved by expensive traditional
marketing alternatives. Further, we believe that the sophistication of marketing efforts by larger
businesses demonstrates to micro business owners the attractiveness of multi-format coordinated
marketing portfolios. We also believe there is a significant advantage to combining the Internet’s ability
to reach these highly fragmented markets with an integrated design and production process that can
rapidly deliver sophisticated, high quality marketing products and services. In addition, we believe that
coordinated portfolios of marketing products and services can help micro businesses appear more
competent and professional, which can enhance their customer relationships and prospects for
success.
The Marketplace for Customized Products and Services for the Home and Family
While we focus primarily on micro business marketing products and services, many of our
product formats are also purchased by consumers seeking customized announcements, greeting
cards, calendars, stationery, and personalized gifts. In the past, many such products were supplied by
an industry comprising print manufacturing wholesalers and local retailers, such as stationery stores.
Compared with today’s Internet-based alternatives, traditional offerings were relatively limited, prices
were significantly higher, and delivery often required longer lead times. Graphic designs were limited
and it was rarely possible to incorporate full color photography into the design.
4