Modern-age D2C leverages the power of advanced tech to revolutionize the way they sell online.
And as commerce moves to its next phase with generative AI and analytics, these brands are disrupting traditional retail models and offering consumers a more personalized and seamless shopping experience.
In this episode, we dive into how technology has played an important role in their brand growth—starting with AI, and how major aspects of their D2C sale strategies have panned out as a result of this. Check it out 🙌🏼
From Launch to Success: The Inspiring Journey of Styched
Hi everyone, and thank you so much for joining us for our third session of the D2C Multiverse livestream series. My name's Sara and I'll be your host today.
Today we have Soumajit who is the CEO and co-founder of Styched—he brings his extensive entrepreneurial and corporate experience to drive the company's growth.
Styched is an affordable, fast-fashion ecommerce brand that offers end-to-end fashion with a major focus on sustainability. Huge hot topic this year is sustainable fashion. The brand has rapidly expanded globally delivering to over 20,000 pin codes. Soumajit has earned the title of most influential ecommerce professional in Indian 2018-2019 by the Asia Retail Congress.
So let's get started. Tell us a little bit about yourself and your journey from working on the marketing side of ecommerce to being a founder of an ecommerce brand.
Thank you! Thanks for inviting me to the livestream. So yeah, my journey has been fairly diverse. I’m an engineer by education.
I did my methodological and engineering from IAT and then I was a software developer for about a year-and-a-half before moving to something that I really wanted to do as a profession.
So I moved to marketing, digital marketing, brand marketing—for part of it, I worked with Jabong the fashion marketplace.
And then I joined Capillary and worked with almost 150+ brands across India, Middle East, Southeast Asia. And me and my co-founder, what we realized, is that there are some common problems that we could see that most of the fashion brands were facing.
Not just in India but globally.
And we could solve them through the use of technology, through the use of sub innovation.
So that's where the whole idea of Styched sparked. We kind of had an initial discussion in 2017 and then we slept on it for almost a year. 2018 is when we thought that we have to get into it. So we registered the company. And we started off with the production and demand technology.
We wanted to create something which is zero waste stage, absolutely zero inventory, zero warehouse very lean in terms of operations.
So we had to create that algorithm.
We had close to 18 fashion designers to run the whole algorithmic pattern-block mechanism that we have. Then we went on to patent that process because we created a really disruptive, just-in-time model.
And that's where the whole journey started.
I mean, we went live in 2019 February. We started off in a small way through menswear only just to see the market, just to see how things are moving along. Expected to get close 200 orders. Ended up getting more than 2,000 orders. And we were like, Hey, this is going to be something serious. I think this is a business at the end of the day.
And we started supplying Bangalore and then eventually we started getting orders from across India. So we started doing tie ups. We created our own hubs across the country. We have hubs in four places across India now. And soon after that, COVID hit. And thankfully just before COVID hit, we raised our first round of funding so we could go through the first lockdown phase.
And then we thought you know, we'll raise another round of funding. Primarily to boost up our women's wear segment on new categories. And then again, COVID hit the second time. But thankfully just before that, we closed the second round of funding so we could go through that.
And then we realized that, hey, third time, if we get lockdown because of the whole COVID issue, then we’re not really doing things right. So we started off in the Middle East. We started off in Dubai. Because if India goes through another lockdown, then we still have geo from where we are getting business.
We expanded the number of hubs because if Bangalore or Delhi goes under the lockdown, we still have production happening from other cities. So that's how we are growing this year. We are expanding to Indonesia. Singapore. We just closed our third round of funding and yeah, that's the story.
Congratulations, that's really exciting.
How Styched Drives Sustainability in Style
You and your co-founders must be stoked for the year ahead and to see what's coming up. So sustainability, as I mentioned in the intro, is a really hot topic. Brands are moving towards being more eco-friendly and sustainable in not only their production, but also everything they do. Carbon offsetting—all that fun stuff.
How does Styched tackle the growing concern about sustainability in the fashion industry and incorporate eco-friendly practices into operations?
So we realized that there are two ways in which you can be sustainable, right?
One is the use of sustainable fabric, sustainable organic cotton and sustainable silk and stuff like that where you don't use animal parts and/or they're biodegradable.
The second part of it is: How do you become more sustainable as a business from a supply chain perspective?
The fabric part of it. The sustainability in terms of the fabric is something which is very costly in India. And what we are trying to create in Styched is a massive, affordable brand—primarily for tier two, two tier-six places. Not for the tier workplace, not for the metros, primarily tier two, tier six people between the age group of 18 and 25.
People who are mid-low income or low income group people. So, we are trying to democratize fashion among those 300 million consumers in India, or the expats in the Middle East, the young population in Indonesia.
So that's our target audience, right? In order to be affordable, we could not really focused on the eco-friendly fabric part of it.
But what we did over the last couple of years is we have made our process extremely eco-friendly. We have made our process extremely sustainable. So we are a zero-wastage brand. We don't have any fabric which is wasted. 15% fabric vest happens across the globe for fashion industry. In our case, it's zero because we use a pattern block mechanism, which is patented wherein there's no fabric vest, whatever remnant or leftover pieces are used to create packaging material for shipping.
We don't have a warehouse. We are absolutely 0 inventory. We are just-in-time. Once an order comes, then the production happens. The production happens not on a SKU level, but at a pattern block level, which is something for a future conference.
Maybe I'll talk about it because it might take a couple of hours, but it's a different kind of a thing, right? We have no minimum order quantity. We can get zero orders for a certain SKU, we can get 10,000 orders of a certain SKU or product does not matter.
So we are saving cost on warehousing.
We are saving cost on unsold inventory, which is 25% globally—25% inventory never gets sold globally for all other fashion brands. You might have heard there are, there are put to land pits. There are some areas in India where the land catches fire because of the chemicals that come out of the fabric.
Right? In our case, the unsold inventory is zero, the wastage fabric is zero. Warehousing is zero, the returns are almost nimble. Around 4.1%. So, that's what we have tried to achieve. We have used technology and process to become sustainable in terms of the business operations, in terms of how much of fabric we are consuming, we do not have any warehouse of fabric.
That can predictively tells us how much of fabric to order only for the next three to four days. So we get only that much amount of fabric, of different types in different hubs. And while we get the order, we already have those fabrics. So they're used up over the next two to three days. So, Essentially, if you come to one of our hubs in the morning, you'll see a huge pile of apple.
They get packed, they get shipped. By the end of that, it's empty. Empty. There's nothing left.
Wow, that's really interesting.
From Zero to a Hundred: How Styched acquired its First 100 Customers
So in the beginning, you didn't focus on the eco-friendliness of the material and the composition of the material, but more the process. Can you explain what marketing and acquiring your first a hundred customers look like in this brand new space?
See, we were very sure about the kind of audience that we are targeting.
We knew that we are not really going for people who are brand focused or who are brand conscious.
We are looking for an audience who are price conscious. And so our target audience would mostly be in colleges. Or who have just graduated from college, they're going to do a job and they don't have too much of money to splurge on fashion the way we know marketplaces like Myntra or Zaras or H&M with high average order value.
It's not affordable for most of the population. So we started off with that. We started off by targeting areas which are considered to be tier two to tier three in India and we started targeting colleges, college students. We started our campus ambassador program and we also started approaching some of the influencers and celebrities who resonate well with the young audience.
And we started making their merchandise, and that's how we started our operation. The first month we got some 15, 20 orders. Second month we got some 200 orders. Third month it became thousand. Fourth month we crossed 2,500 orders.
So we realized that, you know, our marketing is on track.
Facebook came up and tried to give us a 90 day program for helping us understand our customer. That really worked well for us. We did it in two different cohorts. We did not do it in one go, but we realized that 85% of our customers are between the age group of 18 to 25. They're from tier two to tier six. We got the customer profile, the demography, and then we just started marketing.
We created some organic channels as well. We realized affiliates is a big channel for tier two, two, tier six, so we created our own affiliates program and we have close to 3,800 affiliates right now in India. So, yeah, I mean our marketing strategy has always been more organic, more democratizing the whole ecosystem.
Embracing the New Wave: Styched's Perspective on Old vs. New Commerce
Awesome. So I'm gonna pivot a little bit and we're gonna talk about commerce. Commerce is different from the traditional model that focuses on products, pricing, and inventory.
It revolves around understanding evolving consumer behavior and needs and leveraging that knowledge to explore new shopping channels like D2C, resale, social commerce, et cetera. What are your thoughts on new commerce and how your business fits into that?
I have a different view on this. I actually feel that it's a little overrated the way people define new commerce versus old commerce.
It's just a process of evolution that has happened. I have worked with a lot of companies that people would call traditional brands or traditional eco-fashion brands. But they have done nothing wrong in terms of moving to new commerce as well. So previously people used to create a brand, have their warehouse, sell it offline.
Then came the whole era of marketplaces where Amazons and Myntras of the world started selling online. People started buying online more. The behavior changed. The customer behavior changed. They started buying more online, and then brands realized that.
We can't really create a branded marketplace.
We can't really have a brand created outta Amazon or outta Myntra, right? We need to have our own presence in social media. We need to have our own presence as a brand. And that's where D2C evolved.
If you look at some of the traditional fashion brands, like Fab India or Biba, or say Indian Terrain, they are present online.
They are selling through their website, and there's a considerable chunk of their business that happens online, right? So it's not that they're completely opposed to that. They have done all of that. The way I would look at newcomers or new companies are how they have been able to optimize or add more value to a certain part of the supply chain, how they have evolved that, and, and traditionally old companies find it very difficult to change the model because that would mean probably millions of dollars of investment to change a certain way in which they're operating all throughout, right?
So, I would consider that as more technologically evolved. But focus on customers. Understanding the customer, and reaching out to the customer is almost the same for all the brands. People are doing that even the old companies are doing that. Maybe the newer brands are a little more little smarter.
They understand the digital world a little better, so they are able to reach out to customers more. In a more efficient way, use more channels, right? But the intent is always there for all the traditional companies to explore all the new channels, to have an agency take care of that.
So I think it's a little overstated the way we kind of completely differentiate or draw a line between traditional companies and new companies. It's just the way things have evolved over time.
Sustainability Unveiled: A Deep-Dive into Styched's Commitment to Zero-Waste
Definitely, and it's kind of like retail has evolved into omnichannel, right? It's not just one or the other.
It's a combination of all the inputs that create the customer journey. And it's very similar with businesses as well. And I know, so there's no differentiation really between traditional and new commerce. It's just what technology enables. And you talked about a zero-waste, technology-enabled company.
Can you walk me through a little bit how you came to that, what type of research and development you might have done or questions you might have asked to arrive to where you are today?
There are two very distinct problems that we were trying to solve. The first problem is that of the price point.
We wanted to reduce our average order value without compromising on the quality. So we wanted to be1/3 or 1/4 of any other brand in the market in terms of the price point. The second problem that we were trying to solve is that of choices, right? So if you look at most of the fashion brands, there are two seasonal launches.
There's spring-summer collection, right? And that's because of the way fashion trends operate. They will create a certain number of designs. They'll send it to bulk manufacturing houses for mass production, stock it up in warehouses and they'll start selling it. If after a month you come back and tell them: “Hey, can you create one more season or new set of designs?” they would not want to do that because there's a huge amount of investment piled up in the warehouse.
So we thought let's remove the warehouse dependency. Let's remove the inventory dependency, and then we can launch new designs every week so we can take customer feedback. We can see what's trending on social media. We can see what other trends are doing across the globe. We can see trends, and then our fashion designers can create a number of designs every week.
Right. And, and so people find trendy designs, new designs every time they log into the website. While we don't have to remove any of the older designs because there's no inventory. So it's a win-win for all of us. So, that was the thinking we had behind creating the brand.
There are two challenges to this, right? So one is because you don't have an inventory, your time shoots up. When an order comes in, you have to manufacture. Which brings the second problem in terms of the consistency of output because then you are too dependent on the tailor.
The tailor's craftsmanship is what you're completely dependent on. If he or she makes a mistake, then it goes for a toss. So, we have to create a production on-demand technology, which also standardizes the way manufacturing happens. And we don't need to be dependent on the tailor. So anybody who knows stitching can come like an IKEA for furniture.
They can just look at the backend and blindly stitch it. Done. That's what we started creating. We created an algorithm which understands the pattern block mechanism, which extracts pattern outta any photo that you upload on our backend and then creates an algorithm outta it.
We realized that there are a lot of companies who are hiring tailors, but because of the huge amount of fixed expenses, capital expenses, it becomes difficult to run the operation at some point of time.
So we created India's first Uber for tailors.
There, tailors can register, they can choose how much stitching work they want to do. They can pick up the precut material, take it back to their place, and give it back within 24 hours. A QC is done and the products are shipped. They get paid a percentage of the amount of the product. So what happens is we do not have any internal tailors.
We have more than 600 tailors in India, more than 72 tailors in the Middle East. And all of these people are paid on a per job basis, right? So, so these are the technological interference that we have done in the whole ecosystem or in the whole.
And yeah, that's how we are learning the show.
That's really interesting, especially being the Uber for stitchers as well as having the D2C on demand printing. So machine learning and algorithms must play a huge role in this.
Sustainable & Smart: How Styched Plans to Leverage AI to Create Unique Shopping Experiences
What does AI technology look like at Styched? How is it incorporated into other things that you do?
As of now, we are building the whole component on top of the the machine learning layer that we have. We have four people who are dedicatedly working on the whole AI component, but the vision right now we are looking at the historical data and then we are predicting certain things in terms of how much of fabric to order, which kind of SKUs are selling more which kind of prints are selling more, which kind of colors or subcategories are selling more, and then really creating a bell curve of all the categories or subcategories.
And that's how the designers create new designs based on which categories are in demand right now. But yeah, the AI component will kick in shortly and mostly it would be used for recommendations. So you can imagine that we are uploading 800, 2,000 designs every week. So you come to our website after probably a year, you'll see 200,000 designs and it can be a little overwhelming for you to understand what to buy.
And that's where I think AI would kick in—the recommendation part of it to show you the right designs that you would want to buy, that you might like. And the proof of the pudding is: What is the conversion rate looking like? With the addition of AI, is the conversion rate going up from where it is right now?
So that is something that we are working on in a major way. Rest of it, in terms of the production, in terms of how much of fabric to order, what kind of designs, the design inputs that goes to the designers is all on machine learning and is based on past data analytics.
That makes sense.
And I guess just future thinking, what do you think AI could look like in the clothing industry, especially for sustainable clothing brands that might have lower budgets when getting started, but wanting to build up that eco-friendly brand?
Absolutely. So I think I was a part of this conference for eco-friendly fabric and sustainability in fashion.
And one of the problem that everybody was saying is that the amount of investment that people have to do in order to get a certain number of SKUs done or inventory done is huge in terms of sustainable fabric, right?
With AI, we actually would get to know at what point of time? For what season? For what section of the audience or what kinda customers? Which SKU or fabric needs to be procured or needs to be bought?
Right. There are certain fabric which are a little thick. So you wear them during the winters. There are certain fabric which are a little thin we can wear during the summer days or during the rainy season. So AI can predictively tell you which kind of fabric to order for which zone, or which geo right.
So to say that I'm going to launch for winter, and you are gonna sell that in a place like Chennai or Illa, it will not make sense for you because it's fairly hot at that part of the country.
So AI will then start predictively telling you exactly based on the previous year and based on the current trajectory, which kind of fabric to order, which kind of SKUs to prepare and how to market that.
Marketing is going to be an important segment where AI will play an important part, right? To understand whom to market, what to market, where to market, which channel to use, and what kind of conversion rate are you going to expect from that channel.
And speaking of conversion rates, what are you doing on your website to optimize for conversions? Are you doing anything differently that you'd like to speak to?
We are doing two things right now. Right now we are working with a AI-based company called Rosetta to create the whole recommendation engine I talked about. So based on the browsing behavior of the customer, it would understand what kind of SKUs to show on the website.
So that is one.
The other thing we are working on is creating a look book. So, when you buy something or add something to cart, we are now creating a look book which will tell you what other things would go with the SKU that you have selected. You select a top, it'll show this bottom that will go well with the top you have selected.
So creating a look book—that's for cross marketing. And then there's this recommendation engine, which shows you the right kind of product because there's a huge number of products, it's easy to get overwhelmed with so many products.
Empowering Word of Mouth through Affiliate Programs
Definitely, and I'm sure influencers and affiliates play a role in helping folks select the proper shirt or pants for what they're looking for.
And you kind of touched on the affiliate program and having over 3,000 affiliates. Do you mind talking through how that came to be for your business?
Yeah. We knew that as a new brand, we needed to build that trust among customers. People should be confident about buying from us and knowing that we are not a fake brand.
And for that we wanted to approach celebrities. But we did not have money for that. So we thought that we'll start approaching influencers and do a barter. Send them certain apparels, tell them to wear that, and then post it on their social media and see how much incoming orders we get from that.
After the first lockdown in COVID, we actually saw a huge spike in orders. At that point of time, we were getting close to 5,200 orders in a day. But on day one, after the lockdown, we got 2,500 orders. Our whole backend, our whole manufacturing supply chain went for a complete toss.
We could not actually deliver those many orders because even the fabric hubs were under shutdown, so they took some time to send us the fabric. And, we realized that is the way to go.
So when influencers start promoting you as a brand, it really helps. We created an initiative called Styched Life where we start tying up with celebrities and rock bands and other people who say that, “Hey, my merchandise is now live with Styched. Buy from Styched and get that 10% discount.”
Right. So, those kind of initiatives we started taking. And I think the final thing that we did was we really realized that end of the day, our customers are college students. So our influencers should also be college students. We started the campus ambassador program around six months back.
We have got close to 65 campuses right now, and that is something that we are going to expand in a big way.
Innovating in D2C: What Soumajit’s Success Can Teach Other Founders
Yeah, definitely finding the influencers that fit your niche. People like to see themselves reflected in the product and the marketing, so I could see how that would be a really great fit for your business, especially given your target audience.
We have a few minutes left, so I'm gonna leave you with this question. If you had any advice to share with fellow founders, what would be the number one piece that you've either received or you want to give?
My first startup actually did well, we sold it off to another company, but the second startup did not do so well.
Over the years, what I've realized is, in order to be successful as an entrepreneur. In order to make your business look successful to at least to yourself in terms of the vision that you have for your business, it's very important that you build the right team.
You surround yourself with the right people who have the same vision that you have, who think similar in terms of the way you want to take the brand forward or take your business forward.
You have to be critical about what you can do, how you can contribute to the business, but you also have to understand that you can't be the 360 player. You can't take care of everything. End of the day, the CEO would probably be focused more on investor relationships and getting more funding—but you would need people, somebody to run the show, the operation, somebody to take care of the marketing, somebody take care of the finances, the businesses strategy.
And you have to get the right people. And typically the right people are not the ones who come through a job search on LinkedIn. They're people you trust and who would be there with you at least for quite some time. You give them ESOPs, you give them shares to keep them hooked onto your business, and that's how you create a founding team.
So creating a team is super critical. And then that is something I've realized the hard way. And in Styched it has become really important for me to have created the right team because now there are a lot of aspects which I don't have to bother about because I know that one of my friend who's a co-founder is taking care of something or the other, right?
So one of my batchmates is CTO. One of my batchmates is a co-founder and CEO. One of my ex colleagues heads business. So I know all of these people and I've worked with them for all these years, right? So it builds up a circle of trust, and that's really important if you want to create a massive business. A unicorn of sorts.
You have to surrounding yourself with the right team who inspire you, who act to the areas where you are not good at. So for example, I am not good in technology. I'm good in marketing. Marketing is my domain, right? Operations is not my domain.
If I go and start saying that, hey, I can do operations as well because it's my brainchild, so I know how to run the show, it's not really gonna work out well. So you have to be critical of yourself and build the right team.
Teamwork makes the dream work, right? Or one team, one dream. No matter how you slice it, it's totally important to surround yourself with people who have the same vision and wanna see you grow and have complimentary skills to you.
Thank you so much for joining us today, Soumajit. I really, really appreciate it. Everyone, thank you for joining us again today. Make sure to join us next week for our D2C Multiverse livestream and give Styched a follow. Check them out online, check out all those brands and all the designs that they have on their website, and we look forward to seeing you next week.