Created in 1992, Spykar is a leading denim brand of India with a penchant for design innovation and zeal to keep up with the ever-changing dynamics of the global fashion industry for the ‘Young & Restless’ generation of today.
Spykar sells through franchisees, and unlike large retailers, they align with smaller individual stores to reach the younger segment of their consumer market. The brand also sells online via major marketplaces like Myntra, Amazon, Flipkart, Tata CLiQ, Nykaa, Ajio, and others, but through partner agencies that hold stock in warehouses.
The approach, as identified during an audit between Spykar and Fynd, was leading to the following challenges:
Inventory silos & increased dependency on warehouses
Spykar had set up a sale-or-return (SOR) and outright inventory purchase (OR) model to kickstart their ecommerce journey. This led to the holding of inventory at their partner warehouses, leading to all unsold stock at the end of the season coming back to Spykar's warehouse.
The above resulted in two problems:
First, liquidation of this stock at heavy discounts, and second, the opportunity cost of not being able to sell this stock on other channels.
Limited merchandise and high commissions
Since SOR is an inventory heavy model, Spykar provided only a limited stock to their online partners. This would often be old season merchandise as Spykar wanted to continue selling new merchandise in-store.
To circumvent this problem, Spykar started providing limited new season stock to partners. But it turned out to be inefficient due to the need to keep stock aside for online channels.
The brand was looking at how to manage its marketplace operations effectively as its catalog grew every season. They needed to streamline their dependency on warehouses as well as partner agencies without compromising on the number of channels they needed to leverage to reach their target audience.
The leadership at Spykar decided to then embark on an omnichannel transformation journey within the organization.
After discussions, the need to make systematic changes to their omnichannel selling strategy came to the forefront.
This included changing how they interacted and collaborated with the marketplaces and franchisees, removing the middlemen for better management of inventory, and taking complete control.
The team at Fynd discussed potential solutions with Spykar, leading to strategizing their omnichannel transformation.
We broke this step into two parts—setting clear goals and objectives of what we wanted to achieve, and then gradually making the changes required into the model, without disturbing the sales currently being made.
Step I: Setting up the Fynd Store endless-aisle solution
The first step for us was to enable all the franchisees to sell their current and up-to-date product catalogs.
This meant that if an item from their current product catalog wasn’t available in-store, the associate could place an order on the Fynd Store app; which was customized for the brand. With this implemented, no franchisee stood the risk of losing a customer if a product wasn’t available.
The Fynd Store app is designed to find the product order is placed for from a store close by, thereby also enabling faster delivery to the customer; contrary to the traditional approach of having a consumer wait for the inventory to stock up.
The solution also offered flexibility in the inventory held by franchisees. This allowed them to showcase products without taking inventory, earning commissions for also facilitating a sale.
Spykar also created hyperlocal microsites for all their franchisees using Fynd Platform to let consumers in the store's vicinity explore the products in the store and place orders from the convenience of their home during the pandemic; further boosting the sales for the brand.
Step II: Restructuring the franchisee program (Phase 1)
To make Fynd Store a success, it was crucial to nudge franchisees to work in tandem. The strategy we implemented to strengthen this relationship between franchisees was to add a benefit on sale for both the fulfilling and ordering stores.
At the onset, there was a 50% allocation of sales to both the franchisees in the equation, which resulted in neither being able to accomplish their sales goals for the defined period. We changed the model to Fynd Commission, wherein 100% of the sale went to the fulfillment store, and the ordering store received commissions on the sales from Fynd as well as Spykar.
The rehashed model helped solve the friction between stores and helped in the adoption of the Fynd Store solution, especially at the ordering stores.
Step III: Integrating inventory points with the website
Spykar's website was hosted on a third-party platform. To adopt omnichannel on their website, Spykar and their website partner integrated with the Fynd Order Management System (OMS) to get a real-time and unified view of inventory from stores and warehouses. This setup enabled Spykar to be able to manage their orders and fulfill them from a central Fynd OMS.
Step IV: Exploring marketplaces and refining the franchisee program (Phase 2)
In early 2020, when we started exploring setting up their franchisee store on more marketplaces, we noticed that each franchisee was selling as a separate seller. This setup had the following inefficiencies:
Step V: Setting up Marketplaces under Spykar umbrella (Final Phase)
To solve the challenges listed above, we worked with Spykar to bring all their franchises under a single umbrella where Spykar was registered as a seller on each marketplace. This required compliance, legal, as well as technical changes in billing between Spykar and their franchises.
As a result of this structural change, Spykar was now able to list all their 200+ stores at one go on all marketplaces. The brand saw an uplift of 28% in sales due to inventory unification.
Around the same period, the pandemic hit most of their franchisee stores. But with an omnichannel strategy in place, the brand was able to recover sales despite the decrease in in-store footfall.
Pre-COVID, Spykar activated 50 franchisee stores on the Fynd platform. But after restructuring the model, integrating the website, and setting up the Marketplace, the brand took all 200 stores online on the solution.
This helped them sell from one inventory to all the Marketplaces used by their target consumers, including Tata Cliq, Myntra, Flipkart and Amazon.
On implementing the above omnichannel strategy, powered by Fynd, Spykar was able to achieve the following:
The Way Forward
When a brand like Spykar puts its trust in a platform, it's not an easy ride for a company to keep up with their expectations. While we took a gradual and strategic approach to transform Spykar’s omnichannel journey, the results speak for themselves.
We’re excited to be a part of their ongoing journey into digital marketplaces as they expand their target markets! The brand plans to tie up with more new, young and innovative marketplace partners, bringing them on board the omnichannel ecosystem they have set up with us. Spykar will also be seen focusing on D2C businesses and stabilizing the omnichannel business, as highlighted by their Business Head.