Indigo’s dramatic profit pivot is marked with digital best practices

On the eve of its 25th birthday, the retailer's chief tech exec shares how it turned its business around after two years of plummeting revenue.

Indigo

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By Will Novosedlik

Not too long ago, Indigo announced a return to profitability for the first time since 2019.

In a dramatic $60 million pivot, it swung from EBITDA of roughly -$30 million in 2020 to positive EBITDA of $32.5 million for the fiscal year ending March 2022.

Andrea Limbardi, chief digital and customer officer at Indigo, attributes the turnaround partly to the agility of her team in responding to the sudden shock of March 2020. The 20-year Indigo veteran stepped into the chief digital officer role literally on the day Indigo closed its stores due to COVID.

“In the middle of March 2020 we realized a couple things,” she tells strategy. “One, the technology system that we had in place wouldn’t get us to where we needed to go in the future. It didn’t have the flexibility or the agility. It was heavily customized over the years and that meant it always took far too many resources to make even small changes. So we put all of our attention on enhancing our ‘buy online, pickup in-store’ services. And then we did a partnership with Instacart in fall of 2020, and then with CornerShop by Uber.”

She claims that the team accomplished things in the first 48 hours of lockdown that would have taken four to six weeks to normally do – all of which slowly aided the retailer to become profitable again, two years later.

One of its biggest moves was to expand its assortment by bringing on new vendor partners. They were aided in this by Convictional, a drop ship platform that facilitates partnerships with hundreds of small vendors who otherwise would not have the opportunity to get their products in front of so many people.

The platform allowed Indigo’s vendors to connect directly with their Shopify site or other commerce sites to bring their assortment to the retailer’s website. It also allowed Indigo.ca to work around its highly customized website to connect seamlessly with vendors without months of dev work.

Another move that helped bring profitability back was connecting the retailer with younger customers through relevant content on TikTok.

“We hear from customers that one of their biggest pain points is, ‘How do I find that next read?’” says Limbardi. “We’re always looking at new ways for people to find book recommendations, so it was really cool to see that explode on the #BookTok hashtag about 18 months ago. Some of our biggest-selling books over the last year have come through #BookTok.”

Last month Indigo launched an exclusive partnership with TikTok in Canada as their book club partner. The retailer’s TikTok book club will feature a new book each month to keep that conversation going with younger customers.

Given that TikTok gets millions of views every day, Indigo store teams’ TikTok posts do incredibly well. According to Limbardi, Indigo associates not only create their own posts but facilitate others, making sure they have the books in stock and can get them to customers quickly. To do that, Indigo works closely with publishers to increase volumes in response to demand on TikTok.

This year Indigo will celebrate its 25th year as a brand, and it will leverage the occasion to relaunch its full technology stack. The brand has invested $20 million in a comprehensive build that will include a new commerce layer, customer management and order management systems, as well as a full martech re-platform. Limbardi describes it as a best-in-class approach that allows Indigo.ca to assemble the best partners for each area of the digital experience and avoid the pitfalls of relying on a single vendor for the full stack.

This occasion is also marked by Indigo signing the first AOR in its history. Cossette has been selected for the role. The agency’s first task will be to tell the story of the brand, and they’ll be doing that with an integrated campaign complete with online and in-store events slated for September 2022.

Indigo’s plan is to leverage the customer relationships it’s nurtured over the last 25 years to launch a brand and content revolution that will take that community and connection to the next level, says Limbardi.

“It’s really about getting more and more deeply connected with our customers and what they’re passionate about and being able to bring it to life,” she adds. “We’re going to do that through print content and video content and social connection, whether that’s a book talk on our TikTok channel, or by bringing back in-store events or as part of our Plum Rewards program.”