2016 ANNUAL REPORT February 13, 2017
2016 ANNUAL REPORT February 13, 2017 Dear Shutterfly Shareholders, Joining Shutterfly 10 months ago was an easy decision. Shutterfly’s market-leading position, beloved brand, loyal customers, vertical integration, consumer technology, and dedicated team give us a strong base from which to build. At the same time, the explosion of digital photography, the increasing desire for personalization and individual expression, and rapid advances in digital manufacturing technology present a large opportunity that we are uniquely positioned to address. As we consider our opportunities, we’ve established a few principles to guide our thinking: innovate on behalf of customers, delivering great experiences; focus on a small number of high-potential opportunities; optimize for the long-term; and seek sustainable growth balanced with profitability. With these principles firmly in mind, we announced important changes to the business at the beginning of 2017. We are significantly simplifying our Consumer business as the first step in a longer-term strategy: focusing our resources on four high-potential areas of opportunity, reducing overhead costs, consolidating our Consumer businesses onto a single platform, and setting ourselves up both to deliver greater profitability and to re-invest in the business for future growth. Going forward, our Consumer vision is to help people share life’s joy by being the leading online retailer and manufacturer of high-quality personalized products, complemented by our Enterprise vision of being the leading digital manufacturing platform for business. Our strategy for the next three to five years, supporting that vision, has four components: (1) make purchasing personalized products simple, (2) expand our range of categories and products, (3) pivot towards mobile, and (4) leverage our manufacturing platform.
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