Vistaprint 2014 Annual Report Download - page 14

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measuring the efficiency of each marketing partner and product or service placement. In addition, our testing
engines allow us to run product, service, merchandising or site experience tests on our websites, reducing the time
to take an idea from concept to full deployment and allowing us to quickly identify and roll out the most promising
and profitable ideas and promotions to maximize our long-term customer value proposition.
Competition
The markets for micro, small and medium business customized marketing products and services, and
home and family customized products, including the printing and graphic design market, are intensely competitive,
highly fragmented and geographically dispersed, with many existing and potential competitors. We compete on the
basis of breadth and depth of product offerings; price; convenience; quality; design content, tools, and assistance;
customer service; ease of use; and production and delivery speed. It is our intention to offer high-quality design,
production and marketing services at low price points and in doing so, offer our customers an attractive value
proposition. Our current competition includes one or a combination of the following:
• traditional offline printers and graphic design providers;
• office superstores, drug store chains, food retailers and other major retailers targeting small business and
consumer markets;
• wholesale printers;
• online printing and graphic design companies, many of which provide printed products and services similar
to ours;
• self-service desktop design and publishing using personal computer software with a laser or inkjet printer
and specialty paper;
• email marketing services companies;
• website design and hosting companies;
• suppliers of customized apparel, promotional products and gifts;
• online photo product companies;
• Internet firms and retailers; and
• other digital marketing such as social media, local search directories and other providers.
As we expand our geographic reach, product and service portfolio and customer base, our competition
increases. Our geographic expansion creates competition with competitors with a multi-national presence as well as
experienced local vendors. Product offerings such as signage, websites, email marketing, apparel, promotional
products and photo products have resulted in new competition as a result of us entering those markets. We
encounter competition from large retailers offering a wide breadth of products and highly focused companies
concentrated on a subset of our customers or product offerings. Given the state of maturity of the online mass
customization market, we believe our biggest competition is still offline providers.
Business Segment and Geographic Information
As of June 30, 2014, our reportable operating segments consisted of North America, Europe and Most of
World. For more segment and geographic information about our revenues, operating income and long-lived assets,
see Item 8 of Part II, “Financial Statements and Supplementary Data — Note 17 — Segment Information” and
Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The
descriptions of our business, products, and markets in this section apply to all of our operating segments.
Seasonality
Our business is highly seasonal. Our second fiscal quarter, ending December 31, includes the majority of
the holiday shopping season and has become our strongest quarter for sales of our consumer-oriented products,
such as holiday cards, calendars, photo books, and personalized gifts. Revenue during the second fiscal quarter
represented 30%, 30%, and 29% of annual revenue in the years ended June 30, 2014, 2013, and 2012,
respectively, and operating income during the second fiscal quarter represented 61%, 72%, and 59% of annual
operating income in the years ended June 30, 2014, 2013, and 2012, respectively.