Shutterfly 2013 Annual Report Download - page 10

data print products and formats. We continue to focus our efforts in expanding our presence in this
market. Enterprise revenues as a percentage of total net revenues were 5% in 2013, 4% in 2012 and 3% in
2011.
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 monitored 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.
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 websites.
Website system. We have designed our website systems 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.
Render farm. Once a customer orders a photo or any photo-based product, 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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