Spoonflower: One Year Later

One year ago, the on-demand printing world was surprised by Shutterfly’s acquisition of Spoonflower. Upon closer examination, the acquisition made a lot of sense: both companies were focused on innovative products that take advantage of the creativity of consumers and the maker community.

Whether starting with a photograph, digital art or a creation from Spoonflower’s nearly two million designs, the ultimate outcome is a unique product with a design that is driven by creatives of every level including first-timers, hobbyists, enthusiasts, small business owners, interior designers and makers across a growing community.

At the time of the acquisition’s completion, Shutterfly said, “This acquisition will increase the depth and breadth of what people can create, customize and buy on the Shutterfly platform including wallpaper, fabric and home décor. And it will connect 21 million active Shutterfly users to more than one million designs by independent artists in the Spoonflower global marketplace.”

For Shutterfly, the acquisition doubled its total addressable market, expanding its personalized product platform’s reach into the fast-growing home décor category and securing a foothold in the creative marketplace. For Spoonflower, it gave the talented internal team access to more resources and a collaborative marketing and development community that better positioned it for growth.

As well, because of Shutterfly’s manufacturing expertise, the acquisition will enable Spoonflower to scale its business and ship products faster to customers, while helping the small business owners included in its vast community to scale theirs, too.

“We used to be the R&D team within Spoonflower, and now we are a process innovation team directly devoted to textiles and wallpaper," said Kerry King, Spoonflower’s senior director for process innovation for textiles and wallpaper. "The nice thing about that is that we sit within a larger R&D organization where there are a number of process innovation teams and experts on things like lean manufacturing and some of the base technologies around printing, both in terms of paper, but also more broadly in the industry. Now we have lots of great new friends that we can tap into in terms of their knowledge and expertise.”

One of Shutterfly's strengths in this matchup is that they have multiple factory locations.

“We hope that that will not only help us scale, but that it will also help us bring joy and delight to the consumer base by getting products to them more quickly," King said.

As the Shutterfly press outreach indicated, a key driver for the acquisition was access to Spoonflower’s marketplace and community of independent artists and makers.

“We are building a structure that allows creative people to tap into lots of different product categories," King said. "We are starting to see some of the surface designs that exist on Spoonflower appear on the Shutterfly site, on both textiles and wallpaper products, but also as it relates to some of the product offerings that are core to Shutterfly’s brands.”

With all of the potential synergies of the combination of Spoonflower and Shutterfly, King said one of the biggest challenges is staying focused on top priorities.

“For us on the manufacturing side,” she said, “that’s really honing our manufacturing capabilities as it relates to home décor and wallpaper, which is a really huge category for us that is growing exponentially every year. We are doing our best to keep up with growth and, at the same time, improve our manufacturing process and quality level. Giving the creative community the opportunity to find something that is unique is really what we have to offer. And we are getting really good at our ability to manufacture in units of one and to be able to manage a lot of design diversity through that manufacturing process. Being able to collaborate with the Shutterfly team only accelerates that process.”

They are also deftly handling two of the major challenges brought to bear by the pandemic and its after-effects, supply chain and hiring/retaining talent. 

“Our procurement folks were very smart going into the pandemic, and I would credit Gart Davis, one of our founders, with the vision and understanding he had about what was about to happen," she said. "We also worked closely with our leadership team prior to the acquisition to make sure we didn’t run out of anything. Then as time marched on, our procurement team has done a really great job of making sure we are stocked and planning ahead.”

Davis has a long history in the world of on-demand, including in the book printing business prior to establishing Spoonflower more than a decade ago. His vision and his energy have made him one of the industry’s leading innovators, and Spoonflower seems to have benefited from that before, during and after the pandemic.

“We have not experienced the big highs and lows in terms of supply chain that some other companies unfortunately have," King said. "As we continue to broaden our footprint, we need to be really smart about what we are sourcing, where we are sourcing and what we are looking to purchase as we continue down that path.

“When the pandemic first hit, we found that there were lots of people looking for jobs; and we had a pretty dramatic growth scenario. So, we were very fortunate in that we were in a position to hire, and we brought in a lot of temporary employees. Some of those employees we have turned into long-term employees, in both the manufacturing and business organizations.

"Of course, the labor market has become very competitive, and there is no question that it has been really challenging to hire and retain folks. But one of our strengths in this new organizational structure for the Spoonflower product lines is that we don't necessarily have to rely on what the situation is in a single facility. We can spread some of that manufacturing across multiple facilities. And we are already doing that with wallpaper. Ultimately, that will also benefit the consumer with better turn times.”

King admit that sewing skills continue to be a challenge; and the company is having to get creative and work hard to make sure, they "retain the awesome employees we have acquired to date.”

Reshoring manufacturing is also a hot topic in textiles and apparel, as well as other industries. In addition to her role at Spoonflower, King continues to be involved with AATCC, and her perspective is that larger brands and retailers love the idea of bringing manufacturing back to the Western Hemisphere. However, she does question who is going to make that happen.

"Large brands and retailers are not necessarily willing or in a position to invest in the infrastructure that’s required to make domestic manufacturing happen, which in many respects is kind of disappointing.”

However, on a positive note, she believes the availability of digital technologies opens up a lot of opportunity for the entrepreneurial spirit.

“There are examples out in the world of individuals and startups who are looking to make it happen, as we did some 14 years ago at Spoonflower. They are looking to harness new technologies and next-generation processes, pairing that with new business models – not just e-commerce, but also manufacturing on demand and creative community types of business models, building something that didn’t really exist here in quite that way. The growth we have experienced at Spoonflower is but one example of the kind of business that can be successful domestically.”