Shutterfly 2009 Annual Report Download - page 15

Technology and Production Systems
We use a combination of proprietary and third-party technology, including the following:
Customer relationship management, or CRM, system.
Our integrated CRM system is composed of various tools designed to convert
first-
time customers into repeat buyers. We seek to increase average order sizes by expanding customer awareness, providing targeted,
segmented offers to customers and encouraging cross- and up-
selling. The system uses a variety of data, including website usage patterns,
order size, order frequency, products purchased, seasonality factors, image upload and share usage, as well as customer satisfaction
information. This data is continually updated and refreshed in a data warehouse, from which different customer segments are identified
and modified on a continuing basis for targeted marketing communications.
By using this deep customer intelligence and ongoing analysis, we are able to offer customers a more personalized website
experience and to target them with specific website promotions, discounts, specialized e-
mail and direct mail offers. Our promotion
engine generates special offers that are account specific and applied automatically at checkout. In 2008, we introduced our “
promotion
code at checkout” functionality that allows us to run multiple offers at any given time that are targeted to specific customer profiles.
We are also able to dynamically assign visitors to test and control groups who are shown different versions of our service. This form
of A-B testing enables us to continuously optimize products, pricing, promotions and user interaction with our website.
Website system. We have designed our website system to be highly available, secure and cost-
effective. We can scale to increasing
numbers of customers by adding relatively inexpensive industry-
standard computers and servers. We have a strong commitment to our
privacy policy, and we utilize technologies such as firewalls, encryption technology for secure transmission of personal information
between customers’ computers and our website system and intrusion detection systems.
Image archive. We store our customers’
images in our image archive. Once a customer uploads a photo to our website, it is copied
to multiple redundant systems, including an off-
site copy. We continue to expand our storage capacity to meet increasing customer
demand. Our innovative storage architecture provides low storage costs, facilitates the safe, secure archiving of customers’
images and
delivers the speed and performance required to enable customers to access, enhance and edit their images in real-time.
When we store and archive a customer’
s image, we do not alter or reduce resolution of the original image (for example, we do not
reduce the data file size), which preserves the quality and integrity of the image. This approach also lets customers enhance the image
using a duplicate, while giving them the ability to recall the original at any time.
Render farm. Once a customer orders a photo or any photo-based product or photo-
based merchandise, our render farm technology
performs fully automated image processing on the image prior to production. The customer’
s original uploaded image is retrieved from
the image archive, and automatic algorithms enhance the color, contrast and sharpness of the image. The render farm also performs
customer-requested edits such as crop, borders, customized back-printing and red-eye removal.
To ensure that output is of consistent quality, we apply our proprietary ColorSure technology during this render stage. ColorSure
creates an automated mapping of the image’s specific attributes to the printer’
s specific print calibrations and attributes, prior to
production. For example, this technology allows a 4x6 print to look the same as a photo printed on an enlargement or in a photo book,
even if they are ordered at separate times.
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