Vistaprint 2009 Annual Report Download - page 27

‰concerns about the security of online transactions and the privacy of personal information;
‰delayed shipments or shipments of incorrect or damaged products; and
‰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 small 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 seek and attract customers to our websites. 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.
As a result of seasonal fluctuations in our sales, our quarterly results may fluctuate and could
be below expectations.
Our business has become increasingly seasonal in recent years due to increased sales of
products targeted to the consumer marketplace, such as holiday cards, calendars and personalized
gifts. Our second fiscal quarter, ending December 31, includes the majority of the holiday shopping
season in North America and Europe and has become our strongest quarter for sales of our consumer-
oriented products. In the fiscal year ended June 30, 2009, sales during our second fiscal quarter
accounted for more of our revenue and earnings than any other quarter, and we believe our second
fiscal quarter is likely to continue to account for a disproportionate amount of our revenue and earnings
for the foreseeable future. In anticipation of increased sales activity during our second fiscal quarter
holiday season, we expect to incur significant additional expenses each year in the period leading up to
and including that quarter, including expenses related to the hiring and training of temporary workers to
meet our seasonal needs, additional inventory and equipment purchases, and increased marketing
activities. If too many customers access our websites within a short period of time due to increased
holiday demand, we may experience system interruptions that make our websites unavailable or more
difficult to access or may prevent us from efficiently fulfilling orders, any of which could reduce the
Form 10-K
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