By Andrew LaVallee, WSJ
Shutterfly is hoping to pick off a few Kodak Gallery customers this weekend, just as their photographs are being deleted from the rival site.
Starting today, Shutterfly is offering new customers free photo prints, stationery cards and a photo book — a $50 value, it says — if they upload 50 images to its site. This “welcome mat” offer lasts until Monday and neatly overlaps with the date that Kodak told customers that their snapshots would be deleted if they didn’t make a purchase.
Kodak Gallery has required customers to place periodic orders for some time but recently added an annual minimum purchase price — $4.99 for users storing 2 gigabytes or less, $19.99 for users with more images.
Shutterfly, based in Redwood City, Calif., doesn’t delete photos and doesn’t have purchase requirements, and it plans to mention these qualities to frustrated Kodak Gallery customers.
“These aren’t images. They’re memories, for the type of customers we attract,” said its chief executive, Jeff Housenbold. Other photo services have “been resorting to what I’ll call less customer-friendly approaches.”
David Lanzillo, a spokesman for Eastman Kodak, said the company doesn’t comment on competitors’ actions but “we truly value all of our customers and we work hard to give them a great Kodak Gallery experience at affordable prices.” It’s developing new features for the site and recently began providing high-resolution downloads and free shipping on orders over $4.99.
“We believe that asking our members to invest a small amount annually in their Gallery experience (by buying photo merchandise) is a reasonable exchange for a year of photo storage,” he added.
In April, Mr. Housenbold posted a message telling customers of Kodak Gallery and Hewlett-Packard’s Snapfish service that their photos “are safe with Shutterfly.” He received 7,000 emails in response, he said.
The company ended the first quarter with 887,699 customers, a 1% decline from the year-earlier period, though their average order value climbed 15% to $24.48. It’s difficult to tell how many customers are migrating from other online services, though the company’s customer-acquisition rate has risen since Kodak changed its photo-storage policies, Mr. Housenbold said. “It’s certainly drawing notice from people.”
Since Shutterfly’s offer is available for just a few days, it plans to promote it primarily online, through banner ads and outreach to bloggers and social-media outlets where discussions about photo-storage policies are happening.
The $50 offer will be added to new customer accounts on May 20, Mr. Housenbold said.
