Henry Kim in 2011 cofounded Sneakpeeq, a platform for independent brands that turned online shopping into a game. Less than two years later, when the market for discovery web sites looked like it would become dominated by a few huge players such as Fab.com, Kim and his partner, Harish Abbott, decided to change course.
Hearing the independent brands that sold on Sneakpeeq talk about their challenges with fulfillment also influenced Kim’s next move. So he looked to the nuts and bolts of inventory management and shipping.
“Social commerce died down,” he said. “Now, there’s social discovery. Pinterest will have a buy button that will be shipped by Symphony.”
Symphony Commerce, Kim and Abbott’s new business, is a solution to help brands manage their supply chains. The commerce engine enables brands to sell to any retailer through any channel, powering all underlying technology from order processing to fulfillment.
The company was launched with $21.5 million in Series B funding led by Bain Capital, First Mark Capital and Charles River Ventures.
“Retailers like Nordstrom and Neiman Marcus are beginning to put a larger emphasis on their online business as their in-store sales have continued to decline,” said Kim. “Nordstrom has higher margins, no holding costs and no costs associated with shipping or packing. They never take ownership of the product.”
Gone are the days when retailers ordered large amounts of inventory from brands four or five times a year to stock their department stores. Brands now have to process thousands of small orders each week and send products directly to the customer.
Kim said that with Symphony, brands can process thousands of weekly orders and manage inventory efficiently across each retail channel.
“We provided all the infrastructure to J Brand to sell through the marketplace, including technology, fulfillment, a web store and wholesale channels,” Kim said. “Before, they were stitching together 100 solutions.
“We built data integration with Nordstrom so that orders can flow seamlessly from the retailer to J Brand and automatically be fulfilled by our warehouse network,” Kim said.
Symphony has a different solution for specialty stores. Retailers log onto a brand web site set up by Symphony and shop directly through a streamlined wholesale portal.
“Stores can replenish inventory on demand when they run out of stock,” Kim said. “They can even receive inventory within a day, given unanticipated spikes in demand. They have real-time access to inventory. It’s a new way for brands to operate their boutique wholesale business.”
According to Kim, apparel brands generate about 17 percent of overall revenue through e-commerce, a rate that continues to grow.
Symphony built a direct connection to consumers for men’s fashion brand Peter Millar. “We were able to develop a fully branded experience with cutting-edge merchandising and conversion technology for loyal Peter Millar customers,” Kim said. “Peter Millar has seen online sales and conversions rise on the Symphony platform. About 45 percent of customers who added an item to their cart completed the purchase. The industry standard is below 25 percent.”
Kim’s apparel acumen comes from his stint as a principal of the Yucaipa Global Opportunities Fund, an investment firm focused on retail investments in China and Korea, where he led acquisition opportunities for beauty retailers and online apparel and shoe retailers. Yucaipa is controlled by Ron Burkle.
“We’re working with about 80 to 90 brands,” said Kim. “We have a two-and-a-half year runway in terms of financing.”