Vistaprint 2013 Annual Report Download - page 7

4
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.
In addition to physical marketing materials and promotional items, micro businesses are also increasingly
seeking to establish an online marketing presence, via websites, email marketing, and social media. While adoption
of digital marketing approaches has been slower among micro businesses than it has in large companies, it is a
growing component of their marketing spend for micro businesses. We believe that a coordinated portfolio of
marketing products and services, including digital marketing 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,
apparel, personalized gifts, photo books and related photo products. 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.
Online commerce combined with digital production technologies provides significant advantages and
opportunities to consumers seeking high quality personalized products at affordable prices. The overall market
opportunity for these types of products is very large, and we believe it could be a longer-term source of growth even
though it is not our primary focus today. Our home and family efforts have gained significant traction in Europe,
where the consumer market is highly fragmented. As a result, we have invested more in our home and family efforts
in Europe, including an entry into the photo book market via an acquisition in fiscal 2012. In North America and Asia
Pacific, we primarily market our consumer-oriented products to our existing base of micro business customers,
many of whom also have a desire to purchase personalized products for home and family use.
Customer Value, Design and Purchase Experience
As of June 30, 2013, we serve customers in more than 130 countries and we have approximately 30
localized websites serving countries in North America, Europe and Asia Pacific. We recognize that our customers
have differing needs, skills, and expertise, and we offer a corresponding range of products, price points and
customer service options. Our websites offer a full complement of tools and features allowing customers to create a
product design or upload their own complete design, and place an order on a completely self-service basis.
Customers in many markets around the world who have started the design process but find that they require some
guidance or design help can, with the assistance of our customer service, sales and design support personnel,
obtain real-time design or ordering assistance in their local language. We also offer email support to customers of
our other localized websites.
Low Prices and Small Quantities
We believe a key reason that our customers try Vistaprint and stay with us is our ability to sell custom
designed and manufactured products and services in quantities that are appropriate for micro businesses, which
can often be a single unit. At the same time, our high volume, highly automated production facilities produce small
quantity orders at low cost, allowing us to sell at low prices. Our manufacturing facilities operate in a controlled
environment as our quality assurance systems employ principles of world-class manufacturing designed to ensure
that we consistently deliver quality products.