Indigo Books & Music Inc. IDG-T is set this fall to heavily pump up its online offerings beyond books as it faces off with Amazon.com Inc.AMZN-Q just months after the U.S. e-commerce heavyweight got the nod from Ottawa to run its own warehouse here.
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“We’re digging deep to re-shape ourselves,” Indigo president Joel Silver said on Tuesday. “We’re continuing to take the next step in the evolution of what our mission is: to be a place that is more than books. It’s about ideas and other products too.”
Indigo’s new online strategy, which it will roll out early next month, expands its offerings into a wide array of areas including home decor, baby and photo gifts, stationery and organic teas. It will carry three times more toys, including mainstream items. In some cases, such as gifts, it will carry 10 times as many products online as in its bricks-and-mortar outlets.
Toronto-based Indigo’s push online underlines the heightened battle between Indigo and Amazon, which has expanded beyond books in Canada into such areas as watches and consumer electronics. After winning federal approval in the spring to run its own warehouse, rather than having to contract it out to a third party, Amazon is widely expected to further broaden its category offerings.
Indigo’s latest efforts also signal its need to bolster its e-commerce business: In its most recent quarter, the country’s largest bookseller failed to make any gains in its online sales after suffering a 4.8 per cent drop in those sales last year. In a digital age, Indigo is betting that it can offset soft book sales by enticing customers with new and distinctive products.
“It’s all about trying to build the business more profitably,” Mr. Silver said.
Still, Indigo runs the risk of moving too far in broadening its product offerings and becoming indistinguishable from Amazon and other retail rivals. In toys, for instance, for the first time it will carry mainstream items from big manufacturers such as Mattel rather than just educational lines.
Mr. Silver said that Indigo is trying to remain distinct by focusing on “affordable luxuries” and avoiding conventional merchandise that is available at Amazon or Wal-Mart.
“We’re really trying to go a different way… rather than just mimic Amazon,” he said. “We’re trying to take what we consider a visual excellence that we do at retail, and that’s not what Amazon is about. It’s about adding more [of] everything.”
An Amazon official could not be reached on Tuesday.
Indigo is considering adding more categories itself, but it will be selective and tie them to its concept of being a cultural department store, Mr. Silver said. It also will incorporate more customized features in its October site re-launch, such as gift-giving, shopping lists and birthday reminders.
The opportunity is evident. Non-book products make up less than five per cent of Indigo’s online sales but 17 per cent of its overall sales. In the next three years, the company plans to about double that overall proportion.
“For us, it’s about being great at fewer categories rather than saying we will be in everything,” he said. “We’re just not going to win that way.”
Indigo stocks website, ready to battle AmazonIn Canada on September 28, 2010 at 21:06