E-commerce makes a comeback at Indigo
August 12, 2015 02:43 PM
E-commerce is making a comeback at Indigo Books & Music Inc., Canada’s biggest books retail chain. The web was nearly the sole driver of growth for Indigo in the first quarter of fiscal 2016.
For the first quarter ended June 27, Indigo, No. 251 in the Internet Retailer 2015 Top 500 Guide reported:
- Web sales increased 18.2% to C$24.0 million ($18.35 million) from C$20.3 million ($15.52 million) in the first quarter of fiscal 2015.
- Total sales grew year over year 2.3% to C$184.9 million ($141.44 million) from C$180.8 million ($138.30 million).
- Comparable-store sales increased 5.3% for what Indigo calls its largest or “super format” stores, while comparable sales of its smaller stores declined 1%.
- Net loss was C$8.9 million ($6.80 million) from C$14.1 million ($10.78 million).
- The web accounted for 13% of all sales compared with 11.2% in the first quarter of fiscal 2015.
E-commerce accounted for 90% of sales growth in the quarter because Indigo continues to diversify its product assortment online to attract and retain more web shoppers, CEO Heather Reisman says. “Online sales continued to experience growth in books and double-digit increases in general merchandise,” Reisman says.
Just over two years ago e-commerce sales at Indigo were essentially flat at about C$68.2 million ($89.20 million) as the company faced increased competition from Amazon.com and other web-only merchants in its core book space. An earlier effort to diversify and compete in the electronic device market for book readers didn’t produce significant revenue and resulted in the sale of its Kobo e-retailer business several years ago to Rakuten Inc. for C$411.7 million ($315.0 million).
But the e-commerce business is gaining momentum as a result of adding merchandise and an effort to upgrade its social commerce program, Reisman says. The company is positioning itself as a “cultural department store” and has expanded several categories online and in stores, including home decorating, housewares and home furnishings, and smaller personal electronics such as Apple iPhones and iPads. Today the company’s online product inventory contains nearly 7 million SKUs in a dozen categories.
In July Indigo introduced a new component to its Instagram feed called “Like2Buy.” The program lets Instagram users click on a Like2Buy link in the @chaptersindigo Instagram feed. From there, users are directed to a new page that showcases Indigo product photos, allows them to click on an Instagram image and purchase the item on Indigo.ca or M.indigo.ca.
Indigo isn’t saying how much new social commerce sales the Like2Buy program has created, but the number of followers has increased by 9%, the company says . But using social media and social commerce more effectively to drive sales and traffic and give Indigo web shoppers a more diverse buying experience is a big priority, says vice president of marketing Samantha Taylor. “We have been pleasantly surprised with the initial pick up of how many customers are already clicking through the Like2Buy program," Taylor says. "We are also learning quickly which type of products & content really resonate with the user base and are able to make adjustments that really helping drive the clickthrough rates."