Cimpress VP: Online Printer Is a 'Disruptive Innovator,' But Not an Industry Competitor
Few companies in the printing industry capture more attention and name recognition - among consumers, Wall Street and fellow printers alike - than Cimpress, the publicly held parent company of the more well-known Vistaprint online printing brand. The company, which many consider to be a 'Disruptive Innovator' in our industry, has been on a mission these past years to build an international mass-customization platform and most recently decentralized its organizational structure. Printing Impressions even wrote a cover story about Cimpress titled "Building a Global Mass-Customization Platform" in March 2015. And, in December, Cimpress CEO Robert Keane authored an article about the need for specialization and coopetition in the printing industry
I had the opportunity most recently to conduct an exchange with Mitchell Leiman, VP of strategy and corporate development at Cimpress, to get an update about the massive online marketing solutions provider of customized print, promotional products, clothing and more. With an MBA from Harvard University and a B.S. in accounting and finance from Georgetown University, Leiman's experience spans a range of organizations, from large Fortune 25 to smaller privately held companies, across a range of industries, but with a focus on technology.
And, despite what some traditional brick-and-mortar print providers might think, Leiman explains why Cimpress/Vistaprint should not be viewed as a competitor.
Printing Impressions: Cimpress, which is the parent company of a more familiar brand known to many U.S. printers - Vistaprint - is several years into its journey to build an international mass-customization platform. Describe what you mean by mass-customization and what type of offerings fall under that umbrella.
Leiman: Mass customization is a technology-enabled process that combines the flexibility and personalization of custom-made products with the low unit costs of mass production. Mass customization is applicable across a broad range of industries but, at Cimpress, we are focused on mass customization of physical products.
More specifically, when we think of mass customization, we mean producing, with the reliability, quality and affordability of mass production, small individual orders where each one embodies the personal relevance inherent to customized physical products. We are a technology-driven company that aggregates, primarily via the Internet, large volumes of small, individually customized orders for a broad spectrum of print, signage, apparel and similar products.
Our portfolio of businesses fulfills orders with manufacturing capabilities that include Cimpress-owned and operated manufacturing facilities and a network of third-party fulfillers to create customized products on-demand.
At Cimpress, we make personalization possible for everyone, enabling individuals and businesses to create, decorate, personalize and design their own products and buy those products affordably, in the small quantities they want - often just one.
Our businesses serve a wide variety of customers around the world through more than 20 brands. Marketing materials, promotional and trade show products, large-format signs, packaging, gifts and apparel are a few categories of the 400,000+ items we personalize to our customers’ specifications.
With mass-customization technology constantly improving, the ability to customize more products grows, along with customer expectations. Due to increasing technology and customer demand, the market for mass customization continues to expand.
PI: This initiative has required your company to invest millions of dollars in the development of proprietary software and production equipment. Can you be more specific in terms of what types of investments you’ve made and what new manufacturing workflows and products this has enabled?
Leiman: Our mass-customization platform (MCP) is a collection of software services, each performing a specific function, and built following companywide interface standards, making them shareable and reconfigurable by our businesses. These shareable services are software “building blocks” where each block and/or combinations of blocks represent multi-tenant software micro-services that we are developing to fulfill the needs of Cimpress businesses.
Our businesses can pick and choose a pre-configured combination or assemble any custom combination they want, making it easier and faster to introduce new products or improve user experience, scalability, quality, delivery, speed and customer satisfaction.
A few examples: One set of micro-services make it possible for our businesses to leverage our logistics network, including negotiated rates and automated carrier selection. Another group of micro-services supports the design of custom embroidery or laser engraving. And yet another set locate and communicate with the best production partner or Cimpress-owned factory to fulfill each customer order.
PI: How does the Cimpress mass customization platform fit into the overall Internet of Things (IoT) movement?
Leiman: We’ve been innovative and disruptive since our early years and tend to move fast where we see the next opportunity to reinvent ourselves for the benefit of our customers.
The products we customize aren’t tech gadgets, so we don’t fit into the IoT movement in a consumer sense. We fulfill millions of customer orders, each at small dollar amounts, so it wouldn’t make any sense to invest in any smart chipping or RFID on individual customer orders.
But from a process and data perspective, we do fit into the IoT movement. Many of our processes are highly automated from the time a customer submits an order on one of our business’ sites to when their order is delivered. While we have people on our manufacturing floors monitoring, QAing and performing many other essential functions, the actual process is very low touch from customizing, to sorting, to packaging, to shipping to tracking that shipment.
Additionally, the data-driven nature of our MCP fits with the general definition of IoT, as it enables connections between our businesses, and collects data at the various stages that we can then use to inform business decisions.
PI: You have been called a company that’s creating “Disruptive Innovation” within the printing industry. Do you think that’s an accurate label?
Leiman: I believe that’s a very accurate label, and one that we hope to continue to deserve. If you look at how we started, we emerged from very humble origins, literally beginning our life in the small Paris apartment of our founder Robert Keane in December 1994. Robert spotted a gap in the market for inexpensive business cards in small quantities and, using desktop publishing, he set off to change the way that small businesses could access and purchase printed materials.
A major consequence of harnessing technology early on to make customized products affordable to everyone, Cimpress - then Vistaprint - created markets and consumer demand where none existed before. Put simply, we created the market that we still play in today. We were the first to offer real-time graphic design manipulation in Internet browsers. The first to use software and automation to aggregate massive quantities of individual orders into homogeneous and automated production flows.
Almost 25 years later, we continue to innovate at enormous speed and our approach to business, based on competing but also cooperating and partnering with highly specialized businesses, means we are transforming the industry to the benefit of multiple players and small businesses who may not otherwise have survived the era of digital disruption.
And now, we’re building a mass-customization platform that is transforming our businesses and industry again. We invest well over $200 million per year in technology and development and have been awarded hundreds of patents. This is something we’re very proud of.
PI: Some brick-and-mortar printing companies complain of their inability to compete with Cimpress/Vistaprint’s online-only pricing structures for various printed products. Do you think that’s a fair statement?
Leiman: Our businesses try to offer great value to their customers, and this is rarely about trying to be the lowest price in the market. We do, however, acknowledge that our success has brought scale advantages which enable this value. For many of our small- and micro-business customers though, their tiny marketing budgets would not make them attractive customers for brick-and-mortar print shops in the first place.
In aggregate, local print shops remain the largest sector in our industry, accounting for about 80% of sales. But it is true that their market share is declining, while online print market share grows.
At Cimpress, we talk a lot about ‘coopetition’ and specialization. The idea that by partnering with your competition on some aspects of your business, you can conserve resources and reduce waste, and spend more resources on what is unique and specialized about your business. This brings our whole industry up, and is better for our customers.
Local brick-and-mortar print shops could view partnering with online printers as an opportunity to improve efficiency while continuing to specialize in what they are good at. Maybe that is through in-person, high touch service, the convenience of local print shops, expertise provided to customers who don’t know exactly what they want or need - or even being the in-person pickup point for online print partners.
PI: In January 2017, Cimpress announced plans to implement organizational changes designed to deeply decentralize the company’s operations. What drove this move and what benefits has it provided your organization?
Leiman: We decentralized our organizational structure to improve accountability for customer satisfaction and capital returns, to simplify decision-making, to improve our speed of execution, to develop our cadre of general managers, and to preserve and release entrepreneurial energy. That entailed moving approximately 3,000 team members who were part of central teams into our businesses. Additionally, we reduced the scope of certain other roles and functions that were previously performed centrally.
We have been seeing and hearing great feedback from team members and customers following our large decentralization, and the smaller instances that happened subsequently in many of our businesses.
When you look at small companies that are great at serving customers, they don’t have large bureaucracies; they are nimble and quick and flexible. Frankly speaking, we realized what we wanted, above all, was to preserve our entrepreneurial culture and start-up mentality and find a way of ‘staying small as we grow big.’
Cimpress invests in and builds customer-focused, entrepreneurial, mass-customization businesses for the long term. Being capable of addressing customer needs in a market that is moving fast, it is important to not only be very close to those developments but also have a fully integrated supply chain to be capable of answering those rapidly changing needs.
That’s why it’s so important to us that our brands have full autonomy to act fast for their customers. Decentralization allows us to do that. Our brands can introduce new products faster, we can harness our networks more effectively and, ultimately, the consumer benefits from all this.
Let me share one example. We had a supplier that was serving one of our companies very well and another one of our companies wanted to use them, but each company negotiated different terms with the supplier. One business wanted the supplier to fulfill seasonal extras and the other one was sending all their production there, and understandably the supplier wanted to treat those differently.
Traditionally we would have had one contract with the supplier for all of Cimpress - and I think that’s a great example of why small, independent companies can be more nimble, because if one wants to go to a supplier only for seasonal support and another wanted to send a certain volume all year around, they’ll negotiate different contracts.
Before, because we were more centralized, we were imposing an average contract that wasn’t optimized for either of our businesses or the supplier. Decentralization makes sense: it allows the speed, flexibility and entrepreneurship we need.