HubStyle has two fashion brands in its portfolio – Cardio Bunny (women’s sportswear) and Sugarfree (dresses). It had been operating on the market since 2014, however, the brand soon grew popular and recorded dynamic volume growth at the end of 2015.
They have been cooperating with Omnipack since the summer of 2017 – before that, for three years, the company managed its logistics itself. During this time, it changed the location of the warehouse and its region four times. Before its managers needed to act on the fifth shift and fifth logistics reorganization – they decided to consult Omnipack. As a result, they have integrated all their logistics processes into our warehouse.
In the beginning
Going back, at one point in HubStyle’s portfolio there were as many as five brands – online stores. So their extensive infrastructure was designed to serve all five stores. However, the strategy changed and HubStyle closed three of them. The company was left with an extensive infrastructure and resources that it had to reorganize and reduce.
“Earlier, we always came to the point when warehouse space and the team were not enough for us, so we increased these resources x 2. This meant that they were unused for the first 2-3 months,” says Wiktor Dymecki, a member of the HubStyle board. “Later we grew again and again we reached the wall. It meant yet another reorganization, another change, and increasing resources. Over and over again. These were abrupt, big and very damaging changes for the whole company.”
Before we started cooperation, we conducted an analysis of the effectiveness of logistics operations. The analysis showed that in 2016 – which showed very good volumes for HubStyle – there were only 2 months when the brand effectively used its resources (August and December – traditional peaks in the fashion industry). For the remaining 10 months, operations reached only 60-70 percent efficiency.
The challenge was to optimize processes for the remaining 10 months to such an extent that the months that constitute seasonal troughs (in February, March, September, October – sales volume decreases and expenses for new stocks increase) do not outweigh our total yearly cash flow.
#1 Optimization of area and processes
When taking over the HubStyle warehouse, we had to work hard on optimizing the area. Large volumes that had to be managed, especially during sales peaks, generate an additional need for buffer space for both the much larger deliveries and a much larger number of shipments waiting for collection by courier.
To avoid a “slow down”, priority had to be given to the throughput and maximum efficiency of the warehouse. We have optimized the amount of space occupied to such an extent that even now – at much larger volumes than at the beginning of cooperation – HubStyle takes up less space than it had in its own warehouse.
“Omnipack is not just a classic shipping point to the end customer for us,” emphasizes Wiktor Dymecki. “Our monthly volumes are around several thousand shipments to a B2C customer and several dozen shipments to a B2B customer. That’s over 10,000 products (calculated in pieces) per month. Deliveries during peaks often exceed 4, 5, 6 thousand. pieces at a time. The number of current SKU’s is over 1.5 thousand so it is not difficult to guess that the complexity of processes is increasing, but timing and service have remained unchanged.”
#2 Packing orders as directed
Personalized packaging is something that is often an indispensable element of customer service for the fashion industry. HubStyle has prepared several manuals on how to package their products depending on the source of the order. We pack products that go directly to B2C customers differently, e.g. shipments to stock boutiques, and wholesale shipments to distributors. Customers receive a product wrapped in decorative tissue paper in a special fashion box, sometimes an insert or note is added. In turn, products that go to boutiques do not have to be packed in such a way – as a rule, they are in a regular gray carton, properly secured for transport. Returns handling is also very important in the fashion industry. Products that reach our warehouse are again refreshed so that they can be accepted. This means that if they require washing, they are sent to the laundry. And if they need a small repair or sewing labels, then they are sent to our internal sewing room.
#3 System integration
Currently, approximately 90% of all information between the Omnipack warehouse and HubStyle’s “central” is done via IT systems.
This is possible thanks to the integration of all sales channels (B2B and B2C) with our warehouse system, managing not only orders, but also deliveries and returns. This allows us not only to automate processes, but also to ensure maximum transparency. Thanks to real-time data, HubStyle can make the right business decisions on an ongoing basis.
Thanks to integration, we also know, for example, which source orders are coming from. Thanks to this, we can distinguish them even when packing – this is important because different orders are packed in different ways.
“From the very beginning of cooperation, we have been integrally integrated in terms of IT systems. In fact, you don’t need to touch much – things happen by themselves. If we went on vacation, orders would still be carried out, customers would still receive their products, and the brand would earn” says Wiktor Dymecki.
#4 Launching new sales channels
When we started cooperation, the HubStyle brand only sold in the B2C channel – it had 2 eCommerce platforms and 2 stationary stores. Today, apart from sending to a B2C customer, Omnipack is responsible for: taking deliveries, stocking points, handling returns in both B2C and B2B channels.
HubStyle has launched 10 new stationary outlets – 2 own, 8 franchise ones. There will be a total of 15 by the end of the year, and there are up to 50 new boutiques by the end of 2020. There is also B2B cooperation with distributors and wholesalers.
It is also worth mentioning the issue of carriers – courier companies. Shipments to a B2C customer drive one carrier, and a B2B customer use a completely different one – the reasons are different, e.g. the specialization of transport companies.
“Probably, if we negotiated the rates ourselves, especially in the case of B2B volumes, then I think we would have to pay about 30-40 percent more. In Omnipack, on the other hand, this carrier carries out orders from many other customers at the same time, which we really use heavily,” says Wiktor Dymecki. “And there is another matter – spending time and resources on negotiations and conversations. This is something that is often not included in the cost, but it still costs money.”
In addition, we have launched a solution in Warsaw that allows the daily stocking of stationary stores. It’s a so-called “pendulum”, which daily supports stocking, the collection of products, the delivery of personal pickups, as well as a full exchange of documents between the “head office” and the warehouse.
- Cost predictability thanks to variable costs
- Optimizing storage space
- Development of omnichannel strategy: eCommerce, franchise network, boutiques
- Launching new pickup points for orders
- Favorable rates with carriers
At the moment, we place great emphasis on the omnichannel strategy, i.e. the parallel development of both eCommerce distribution and stationary distribution. We want to build processes so that these two channels can support each other. It would be difficult for us to develop this well without a logistics operator or without a responsible logistics department that can wisely map these processes. Thanks to the fact that we cooperate, Omnipack is responsible for finding us the best solutions in logistics and – de facto – contributing to our business development. Wiktor Dymecki, członek zarządu HubStyle S.A.