Earlier this week Cary Sherburne published a great interview with Robert Keane, CEO of Cimpress (parent company of VistaPrint). I started to post a comment about this story and when my comment reached 500+ words I decided it might be better suited for a full article. For full context, learn from Cary’s excellent article first or plough ahead for my take on what I see Cimpress doing in the market place.
VistaPrint, to me has been an example of a company applying new technology (the internet) to a legacy market segment (print). Their brilliance was superb timing and expert execution on the strategies behind building “demand” online through search engine optimization (SEO) and paid search for print products that were well-suited for a self-service purchasing workflow (templated products like business cards). They aggregated the demand for print products that virtually every local printer was printing every day, they made the process 100% self-service, then they set the standard for executing on internet marketing to improve their standing in virtually every search engine results page (SERP) related to the products they sell.
VistaPrint is a marketing company that happens to manufacture.
I know their backend automation is impressive but as you can tell in the interview with Robert Keane, he values demand generation way higher than manufacturing – he’s buying successful demand generators in key markets; Exaprint – France and WIRmachenDRUCK – Germany and is just fine with the manufacturing staying with third parties. Notice, in their two largest acquisitions, “$100+ million in revenues “virtually all [production is] outsourced to a network of more than 150 partners”. They are acquiring “print demand generators” that don’t manufacture.
Here’s how I view Cimpress’ strategy, they are dominating and at the same time seeing limited growth in the core products that produce the majority of their revenues (business cards, etc.). They know that “designing yourself online” is a very small fraction of the overall print business – the meat of the print business is customers and businesses that have created their content and need a printer to manufacture it. Cimpress calls this “upload-and-print market”, many of us refer to it as “Ad Hoc Products” which is a workflow most printers are so familiar with, giving it a name can be confusing. A customer sends you a file and wants you to manufacture it, you go back and forth (2.5 – 3 interactions is the norm) on the specifications, you perform pre-press, you go through a proofing cycle, you provide an estimate. This is the “meat” of the print industry and a really inefficient and painful purchasing process on the customer.
This is where Cimpress is heading to disrupt.
This is the part of the industry that everyone who resists e-commerce says won’t move online. Like it or not it’s going online, not because Cimpress wants it to but because customer’s want everything to be easier and everything to be self-service. I can apply for a home mortgage online, yet I can’t currently print a brochure for my company without e-mailing my local printer. Please don’t use the “complex excuse”, the online channel started with the easy stuff (unlimited library of books by Amazon), it’s moving upstream on the complexity scale and print is no exception. I fully expect that companies like Cimpress will invest in the user experiences that enable complex print products to be ordered in a self-service or “technology enabled” fashion.
Imagine if Cimpress can eliminate the need for an estimator (with software), a customer service agent (with software), a pre-press resource (with software), and what I think is the most difficult challenge to solve, the accurate collection of specifications for a one-off print order. Buying print is a collaborative commerce interaction, the customer speaks one language (e.g. thick paper), your manufacturing process speaks another language (140lb index). Today the translation between the customer’s language and the manufacturing language is done manually, inefficiently, by humans.
Customers vaguely understands what they want without knowing much of anything about print manufacturing, in fact customers know less and less about printing at all. How do you execute on that collaborative commerce – the “activity” that happens between your customers, sales representatives, and CSRs today to get from idea to specification that can be accurately manufactured? Nobody has solved this for our industry because solving this challenge would move “print knowledge” from the heads of our staff into software, dramatically changing the customer’s experience for ordering print. Technology is proving some interesting tools for problems like this; learning algorithms could be set to translate “customer print language to manufacturing language” similar to German to French translation.
Many will see this development as a threat, I see it as a requirement to keep print relevant because today print is way too hard to purchase and the customer’s tolerance for a difficult purchasing process is decreasing at an alarming rate. Your site stalls for a few seconds and today’s customers who have an attention span of a gnat are long gone. Why do believe that we can continue to make print buyers interact with us 2-3 times before a print order is ready to place into production? It’s too much overhead, it’s too timely, and it’s a high labor costs on the printer.
It was only a matter of time before VistaPrint expanding beyond the micro-businesses and templated products, they are building a platform – anyone of size in the internet age knows a platform is your only defense against the pace of change. In speaking with a VistaPrint business development executive, my ah-ha moment was that with a global fulfillment platform – a small, creative demand generator could “plug it into their platform” and almost instantaneously build a global business without making a single capital investment. The rules of the game are changing; the value is migrating from manufacturing/capital intensive companies to lean, creative, demand generators. Hang on; it’s going to be a thrilling ride!