Shutterfly: Growth Strategies For The Future

Shutterfly (NASDAQ:SFLY) posted a rather disappointing quarter with its recent release, as we noted at the time. That said, Shutterfly is determined to push things in the right direction going forward. Here’s how they can turn things around:

Making the Purchasing of Personalised Products Simple

 Despite Shutterfly’s popularity, it has struggled to increase its number of customers in the recent quarters. This has led management to believe that maybe the problem lies in the process of creating a personalised gift. Historically, the process has been confusing and time-consuming, to say the least. In this respect, management believes that the trick to re-accelerate growth in the company’s core categories is by improving and greatly simplifying every aspect of the creation in purchase process.

Offer a Greater Range of Products to Choose From

Over the years, Shutterfly has expanded its product portfolio significantly. From cards to stationery to home decor, the company has come a long way. However, it appears as though demand for the existing products has decreased in recent years. In this respect, going forward, Shutterfly needs to improve the number of products and categories that it offers in an attempt to capture a larger audience.

Improving its Mobile App Penetration

Pushing customers to use mobile devices naturally complements the first two strategies. The recently launched app is representative of how simple and elegant the mobile creation experience can be. The app enables customers to create a card or a photo book in a matter of minutes. It is for this reason that the company needs to work hard to shift customers away from the website to the app, a strategy, which until now, has been working very well. In addition, Shutterfly must also work towards extending its mobile offerings to encompass its entire range of products over time.

Leveraging the Manufacturing Process

The company’s in-house manufacturing capabilities already include the world’s largest four-color digital printer, with industry leading scale, quality, and cost. Through its extended manufacturing platform, the company must build further on its manufacturing capabilities to best position itself for future growth.

Streamlining Opertations

2017 is expected to be a make or break year for the company. In an effort to improve the business, Shutterfly has decided to streamline its business and focus on the few businesses that have consistently performed over the years. Here are the highlights of the restructuring process:

• Business consolidation: Shutterfly expects to consolidate a number of its business onto a single platform. The Tiny Prints brand will get a designated tab on Shutterfly.com, while Wedding Paper Divas will be absorbed into the newly created Shutterfly Wedding Store. Over the course of the first three quarters in 2017, the company will work on transitioning existing customers at these businesses to the new Shutterfly platform.

• Shutting down smaller, inconsequential brands: Furthermore, the company is expecting to close a number of its smaller brands like the TripPix and FavPix apps, and the Shutterfly Pro Gallery service. These three businesses account for minimal revenue today.

• Workforce consolidation: The company is expecting to lay off about 13% of its workforce, while also shutting two offices, in New York City and in Santa Clara.

View Interactive Institutional Research (Powered by Trefis):

Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap
More Trefis Research