Shutterfly: The Year In Review

Shutterfly (NASDAQ:SFLY) has had quite an exciting year this time around. The much awaited Shutterfly 3.0 was introduced in the first quarter of the year and has so far been quite a hit with customers. It is definitely going to help build the growth momentum for the future. Furthermore, the mobile app that was launched in September has really helped widen the customer base, while generating additional revenue. As of the latest data, more than 20% of all revenues were earned via the mobile app. In an effort to improve the overall efficiency of their work, Shutterfly installed  the new HP 10000 digital printers, which offer an increased quality and throughput. Furthermore, in each of the quarters thus far, the company has managed to post better than expected earnings and revenues. Here are a few key takeaways from the year:

Shutterfly 3.0

As mentioned previously, the Shutterfly 3.0 platform was introduced in the first quarter of the year. The platform integrates all of the company’s services under one blanket. It includes a modern intuitive interface, facial recognition technology and simple yet powerful upload tools for photos, all of which are aimed at allowing consumers to create keepsakes and gifts easily and quickly. So far, the new platform has been received very well by customers.

As of the second quarter, the company had managed to integrate the This Life photo management service (now referred to as the all new Shutterfly Photos) into Shutterfly.com. This was an important move as customers in aggregate tend to store billions of photos, and shifting existing customers to this new platform was essential to enhancing the experience. By the third quarter, the company reached its full year goal of migrating most of the company’s active users to this service.

Shutterfly Mobile App

Shutterfly successfully launched its new Shutterfly mobile apps on iOS and Android. The apps were shipped out in September, well ahead of the busy holiday season. The new apps are a significant improvement in several ways. Apart from a variety of services already prevalent, the apps now allow users to create and purchase cards and stationary (the company’s largest category by annual revenue). The improved app experience counts as customers are moving rapidly to mobile devices. In the third quarter, customers downloaded the app more than a million times. Purchases made on the mobile platform increased at a double digit rate, representing almost 24% of overall Shutterfly brand revenue in the latest quarter. Furthermore, due to the ease of use and accessibility, it is very possible that the number of orders per customer will increase going forward.

Innovation and Strategic Tie-Ups

Constant innovation is critical for Shutterfly to keep consumer interests alive and maintain a competitive edge.  In Q2 2016, the company launched its new statement gifts category by introducing non-photo personalized gifts. During the same period it also entered into new partnerships with Avis and Budget aimed at increasing engagement with holiday travellers who rent cars. It also partnered with Pet Smart to target pet parents looking to preserve memories. In Q3, the company’s longstanding Philanthropic Partnership with the Ellen Degeneres Show entered its fifth season, continuing to help change the lives of those in need while increasing awareness of Shutterfly. Such strategies are bound to increase awareness and consequently revenues in the future.

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