Indigo Vendor Information

Recent Announcements

Dear Indigo book publishers and distributors,

Indigo remains committed to maintaining a constructive relationship with the book vendor community, particularly through the Fall and Holiday season each year. In previous years our vendor partners have alerted us to shipping delays through our supply chain network for the Fall titles which are so central to our collective annual business. We are aware that this has been a point of concern in the past, and wish to thank you for the collaborative nature of this process, and for your continued diligence in sharing your concerns.

As you know we are currently undertaking a high-level initiative to transform our distribution centre, with an online facility opened last year; continued investment in physical infrastructure; and a new software base that will become effective in 2012. With these changes we are confident that we will have a world-class facility more than capable of managing Holiday peak volume across a diverse range of product types, without interruption to a high service level to Canadian customers.

We share with you an understanding of the importance of having books in stores to meet and exceed customer expectations, particularly as the book retailing landscape is subject to such considerable change, as is Indigo’s own retail presence.

In order to safeguard the distribution of our core book product for Holiday 2011, we intend to shift a large amount of our books volume away from DC flow-through, and towards direct-to-store distribution, during a 10-week period starting mid-September this year. We expect that during this period our store receipts will be approximately 85% sourced direct from vendors.

We believe that this policy, ahead of the aforementioned investments effective next year, is the most responsible way to manage our core book product group and underline our commitment – even at a margin cost to us – to the importance of a robust in-store presence for books for all of our customers.

Please note that this does not represent a permanent change of policy; rather it is a temporary measure for a period lasting approximately 10 weeks this Fall.

We will be placing orders so that during this time the majority of initial buys will flow direct to stores. Key initiatives like the annual backlist push will be sourced almost entirely direct to stores, as will replenishment volumes for titles selling at slow pace.

We understand that for this to be successful it will have to be a collaborative process. Our inventory management team will be working diligently to ensure that orders are placed with sufficient lead time to maintain our instock levels and continue to satisfy customers. Where necessary we will be increasing our in-store presence of key titles to ensure that the risk of being out of stock is minimized. We hope to establish regular meetings through Fall with key accounts to review our inventory position on key titles.

We will reduce or even remove the store-specific minimum order thresholds to ensure that we are outputting orders on a timely basis, and hope that you will not consolidate orders for more than one week to avoid stocking out at the store level.  We will make that change in SAP for this 10 week period of time in order to ensure that stock remains on target as sales increase.

We also are willing to explore EDI cross-dock capabilities for those vendors already established for cross-dock to help offset the impact of some unplanned freight costs.

Moreover the team will be closely monitoring the volumes moving through the DC, and where we believe we have an opportunity to shift volume into our DC without risk to the sales of your titles, the team will be working closely with your operations teams.

Additionally, in order to accommodate this, we will be aiming over the coming weeks to return stock from our DC of titles for which there is no longer active store demand, or for which we have high inventory levels relative to our requirements through Holiday. Please be aware that this in no way reflects a change in our assortment strategy at the store level; rather, we will be taking these measures in order to safeguard supply through Fall and Holiday.

We thank you, as ever, for sharing our commitment to providing an excellent service for all Canadian book customers, by insuring that we have the right books, in the right place, at the right time.

Regards,
Steve Forth, Director Vendor Relations

CC: Bahram Olfati, VP Trade
        Denny Palarchio, SVP Inventory Management