โWhen shipping costs threatened to sink a โน75 crore contemporary fashion brand, data-driven decisions made all the differenceโ
The Premium Delivery Challenge
For StyleCraft*, a Bangalore-based contemporary fashion brand known for their sustainable athleisure and modern ethnic wear, 2023 started with a paradox. Their revenue had grown to โน75 crores annually, their premium collections were receiving rave reviews, but their profit margins were being eaten away by mounting shipping costs.
"We were processing around 3,000 orders daily across India, with an average order value of โน4,200"
"At these price points, customers expect premium delivery experiences. But with orders containing multiple pieces and our commitment to sustainable packaging, each shipment was costing us between โน250 to โน450. Our 25% return rate on premium products meant we were burning through our margins"
Shreya Patel, Operations Head
Enter Forcesight: A Data-Driven Approach
TrendStyle discovered Forcesight during their search for a solution to optimize their shipping costs.
The Contemporary Fashion Challenge
Their situation reflected common challenges in India's premium fashion e-commerce:
- 25% return rates on premium products
- Average order value of โน4,200
- Multi-piece orders requiring special handling
- Sustainable packaging requirements
- Premium delivery expectations
- COD orders still making up 45% of sales despite higher price points
- Return to Origin (RTO) rates of 12% on COD orders
"During our peak months, we were spending โน1.8 crores just on shipping and returns"
"Add to that the cost of maintaining multiple warehouses, and logistics was eating up nearly 18% of our revenue."
Rohan Shah, Finance Director
The Breaking Point
The crisis peaked during the 2023 monsoon season when:
- Courier rates suddenly increased by 12%
- Return rates spiked to 42% due to weather-related delays
- Customer complaints about delivery times doubled
- Working capital got stretched managing multiple courier deposits
The Transformation Journey
Forcesight's implementation revealed several critical insights:
1. Smart Inventory Placement
- Historical order data showed 40% of returns came from orders shipped across zones
- Certain styles had higher return rates in specific regions
- Some warehouses were operating at 50% efficiency
2. Return Prediction Engine
Forcesight's AI identified:
- Products with high return probability based on historical data
- Regions with higher return rates for specific price points
- Customer segments more likely to return items
3. Shipping Cost Analytics
The platform provided:
- Zone-wise profitability analysis
- Cost impact analysis per region
- RTO prediction for COD orders
- Shipping cost trends and patterns
4. Real-time Decision Making
The system provided:
- Dynamic courier allocation
- Inventory transfer recommendations
- Return risk alerts for specific SKU-location combinations
The Results: 90 Days Later
The impact on TrendStyle's operations was dramatic:
1. Cost Reduction:
- Overall shipping costs reduced by 22%
- Return rates dropped to 28%
- RTO rates decreased to 12%
2. Operational Efficiency:
- Consolidated warehouses from 5 to 3
- Optimized inventory placement across regions
- Improved delivery efficiency through better stock positioning
3. Financial Impact:
- Shipping costs as % of revenue dropped from 18% to 12%
- Working capital requirement reduced by โน85 lakhs
- Overall profitability improved by 6%
The Path Forward
"Shipping isn't just a cost center anymore,"
"With Forcesight's analytics, we can predict and prevent logistics issues before they impact our bottom line. We're now expanding our catalog with confidence, knowing we can maintain profitability despite the logistics challenges."
Rohan Shah, Finance Director
Today, TrendStyle is launching in two new categories, armed with data-driven insights about:
- Optimal warehouse locations for new categories
- Region-specific pricing to account for logistics costs
- SKU-level profitability predictions including shipping costs
