Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Kristine Koerber – JMP Securities.
Kristine Koerber – JMP Securities
Can you talk about the trends during the quarter especially with no major holidays falling in the quarter? Revenues came in better than expected. Can you comment on that?
Jeffrey Housenbold
The strength in the quarter came primarily from our Photo Books and our cards and stationary line, but Photo Books was the fastest growth rate in Q3 out of the year so far and we were using a mix of promotional and marketing initiatives to drive those sales. Part of that was partnerships as we mentioned in the script and some of that was an uptake in our new launch of the Simple Path creation and some of that was the traditional custom packs with just we’re seeing year over year growth rates accelerating in the quarter.
Kristine Koerber – JMP Securities
My next question was going to be on the Simple Path. Can you quantify the customer response? Are you seeing an increase? I’m just trying to figure out what’s going on with the average order size at check out now.
Jeffrey Housenbold
Two key things we’re looking at. One was the total sales of Photo Books and fortunately it looks like Simple Path is being incremental to overall Photo Books sales, so we look at the impact on custom pack and those growth rates who are healthy and continue to remain at that growth rate when we launched Simple Path.
As it relates to AOB, we’ve been defaulting the Simple Path price point to the soft cover 7X9 to lower the barriers to entry to really try to capture those 4X6 print customers, trying to present them with a product that is much better than prints but at roughly the same price point. So we’ll see a little drag on the AOB of Photo Books as a category as we continue to acquire people onto the franchise.
But we believe getting them into the franchise, showing them the wow factor of the Photo Books will lead to ever increasing life time values.
Kristine Koerber – JMP Securities
The commercial print business, the new clients that you gained during the quarter, was that from internal or external effort?
Jeffrey Housenbold
It was a combination of both. We have four sales people up and running who are out there building a pipeline and also our partnerships with both Group O and Inner Workings are starting to pay off.
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