Visit to Indigo Lighthouse Group: Tuesday 13th September 2005

The Scottish Region visited the Indigo Lighthouse Group's warehouse and distribution facility at Hillington Park, Glasgow on Tuesday 13th September 2005 and members were given a detailed overview of the group's activities by Gerry McKenna, the group's Logistics Manager.

The Indigo Lighthouse Group specializes in the distribution of contact lenses and is the world leader in this unique service. The company was founded in 1996 by Alan Cox, an optician who had started a home delivery service for contact lenses with 5 employees. Since then the company has grown and now employs over 250 staff.

Today the company handles some 2.5 million shipments each year and their call centre deals with over 750,000 calls. With its head office in Glasgow, Indigo Lighthouse Group has distribution centres at St. Hellier in Jersey and Hillington, Glasgow. The staff are divided between the three sites, with around 70 working in Jersey and a similar number in the call centre. The remainder work at the head office and provide the various administrative functions and IT support.

The business includes e-commerce and handles the distribution of DVD's for Amazon and also has the Royal Bank of Scotland as a client. However, the core activity is the distribution of contact lenses and the main UK customer for this service is Dolland & Aitchison, the large high street optical chain. Indigo Lighthouse manages detailed information for it's clients and maintains a database of contact lens users on behalf of its clients. This enables the clients to focus on their core activities and can additionally provide management and marketing information that enables client companies target customers for promotions. Another service provided is payment transfers and the company also has its own BACS clearing centre, enabling it to process financial transactions for its clients and to offer a standalone service.

In the UK, only 7% of contact lens wearers receive their contact lenses by post, whereas in the USA this figure is in the region of 20%. Indigo Lighthouse handles all of Dolland & Aitchison's contact lens distribution in a seamless manner, so that the customer is not aware of the fact that their local optician does not actually send the contact lenses out. Mr. McKenna described the process that an order goes through.

When a customer visits a Dolland & Aitchison branch, an optician will decide on the prescription that the customer requires and when the customer signs up for the contract lens service, payment details will be taken. This takes the form of a monthly subscription, rather than a single 6 monthly or annual payment. The customer's details are passed to Indigo Lighthouse and the customer database, with the prescription and payment details, is used to process the orders. Each month, on a date chosen by the customer, a payment is requested. When this is made and verified, an order is produced. This is then passed to the warehouse where the details are checked, the order made up, packaged and dispatched to the customer.

The advantage of this service is that the customer has a convenient service that does not require a visit to their optician to order contract lenses, then return a few days later to collect them. They simply receive them through the post at the right time. They do not have to worry about ordering as this is done for them. If they need additional lenses or delivery to a different address, a single telephone call to the call centre is all that is required. The whole process is about ease of use to customers.

Indigo Lighthouse also provides the same service for European optical chains, such as Synoptic, NytSyn and Apollo. Customer orders for these companies are handled at the Glasgow warehouse and customers calling the call centre are answered in their own language. It is unlikely that a customer in, for example, Norway, will realize that they are speaking to a call centre in Glasgow, as the process is so seamless.

In providing customers with their lenses, Indigo Lighthouse deals directly with the contact lens suppliers, including Busch & Lomb, Johnstone & Johnstone, Cooper Vision and Ciba Vision. Orders are placed with these suppliers as necessary on behalf of the clients. There are 6 main types of contact lens being standard monthly, rigid gas permeable, continuous wear, daily disposable, toric monthly and lenscare. A key factor in the life of a contact lens is the oxygen permeability and this determines the frequency of replacement necessary. Indigo Lighthouse currently has 159 products in its catalogue and with all of the varieties of contact lens can have up to 160,000 variations to stock. The company also distributes lenscare solutions and has designed special bottles that can be posted out in a box.

The main warehouse serving the UK is located in Jersey and has 22,000 square feet of space. In a month, some 200,000 packs are shipped. Jersey was chosen as there are tax advantages for customers in that orders up to £18 in value are VAT free under the personal import rules. To this must be added the other charges made by the optician that the customer consults to reach the final amount paid each month. Once payment for an order has been confirmed a customer order is printed and the appropriate box picked, into which are packed the contact lenses and solution. The box is sealed and labelled and sorted into the correct postal area ready for dispatch. All packages sent from Jersey are handled by Jersey Post. Automation of the process is being developed.

Indigo Lighthouse Group is a dynamic business and plans on further expansion into Europe where there is scope to provide their unique service to a potentially large customer base. With the expansion of the European Union, there is scope for the business to grow and other potential markets are being examined.

The Scottish Region would like to thank Gerry McKenna, Indigo Lighthouse Group's Logistics Manager for hosting the visit and to Steven Anderson for his assistance with the visit.

Report by John Fender.