Omnichannel order management: time to step up?
Guest blog by SCOTT SLINN
Earlier this year, when the front door rang and a polite courier announced that he had a cot for me, I was more than a little puzzled. I had ordered a cot, but I had also subsequently cancelled the order — and in fact, the refund had been credited to me earlier that very day. But however much I tried to explain that there’d been a mix-up, I couldn’t induce the courier to take the cot away.
Since I spend a lot of my time talking to retailers about their order management challenges, I’m pretty sure I know what happened.
The implications of ‘cot-gate’
My wife and I ordered the cot through a department store website but changed our minds a day or two later. When we called to see whether we could cancel, it was probably too late to stop the drop-ship delivery. But the system used by the call centre wasn’t integrated with the relevant upstream fulfilment system. Perhaps the service rep was supposed to check in a separate system or through an ‘offline’ process, or perhaps they miscalculated the cancellation window, but clearly there was nothing actually preventing a cancellation from being initiated. Nor was there anything to stop it from completing, in parallel with the delivery process.
If this sort of thing were very rare, it wouldn’t matter. Mistakes happen. But with already-complex supply and fulfilment chains getting further complicated by a bewildering variety of omnichannel purchase and return options, the mistakes are destined to add up for retailers relying on siloed systems and manual processes. ‘Cot-gate’ is not the only recent frustrating ordering experience our household has had, and I don’t think we’re outliers.
What a difference a few months can make
Of course, it’s too easy — and really not fair — to criticise retailers for not being ahead of the omnichannel game. Given the speed and scope of changing shopping habits, I think it’s amazing how well many retailers are implementing omnichannel options without a good order management system (OMS). But at the end of the day, they’re doing so using workarounds that are neither reliable nor efficient, such as (for example) having to always fulfil a click-and-collect order from a warehouse, even if the relevant store has stock. And on top of that, they’re missing out on significant opportunities for revenue growth.
If your business finds itself wanting to do better, the obvious solution is to invest in an OMS: a system specifically designed to act as a hub of visibility and control over all the data and processes relevant to delivering a truly omnichannel ordering, fulfilment, payment, cancellation/return and refund experience.
At this point, you might bristle at the thought of a major IT project of a year or more. But that really doesn’t have to be the case. Some solutions are undoubtedly big, expensive and time-consuming to implement. But when opting for the speed and agility offered through a cloud-based OMS, many retailers can be up and running and delivering results in 4-6 months.
What do I mean by ‘delivering results’? I can’t step through every last thing that a good OMS should be able to do for you, but here are some of the more important ones.
Out-of-the-box support for retail use cases
There are a lot of options if you combine every order placement channel (online, call centre, store — your own and third-party), inventory location type (own and third-party warehouses, stores), delivery destination type (own and third-party collection points, customer address) and payment point (pay when ordering, pay at pickup/delivery) in every possible way. Not every combination is strictly necessary, perhaps, but you do want a system that caters to a large set, straight out of the box.
This is about not just giving your customers more flexibility but also enabling you to sell more. I can’t help thinking of the incremental sales worth £1m+ that one retailer achieved simply by making its in-store stock available online. But nor is it just about quick wins. Think about, for example, being able to expand by utilising more local or international marketplaces, or ship to customers directly from stores (although, since stores aren’t as a rule designed for pick-pack-dispatch, you’ll want an OMS that can double as a store fulfilment system).
Don’t forget that the store is at the heart of the retail omnichannel experience. That means you want an OMS that can capture the hearts and minds of store associates — that can ‘speak store’ — so that they’re willing and able to actively drive your omnichannel strategies.
Flexible automation
By giving you access to all of your inventory in one place, an OMS lets you eliminate the need to ringfence stock for specific channels, and raises flexibility within channels (for example, letting you relocate stock from low-demand to high-demand stores mid-season).
But of course you want control to prevent costly decisions, such as depleting stock below safety levels or shipping an item from a store with high demand to fulfil an online discounted order. So look for the ability to create the rules you need to use feeds such as stock-turn data as input and to split shipping orders efficiently to meet customer expectations without costing you too much in delivery. If you want to support truly omnichannel payment and refund processes, look for an OMS that is also an effective payment processing hub.
Ease of integration
A good OMS will interact with your existing systems while adding its own capabilities such as order brokering, payment processing and in-store fulfilment support. When it comes to integrating with your systems — ecommerce, POS, inventory, merchandising, CRM, etc. — it helps if you can utilise an end-to-end retail solution with its own OMS pre-integrated. But if that’s not a path you can go down, you’ll want an OMS with a large library of standard APIs, preferably including extensible APIs (which means, for example, that if you use more than one delivery carrier, you essentially reuse the same API to connect to each of them).
Stepping up omnichannel order management
The truth is, there’s no time like the present for retailers to step up their omnichannel order management strategies. Inefficient and disconnected order management can impact profit margins and customer experiences to a degree that no retailer can afford.
As the frequency and cost of fulfilling orders continue to grow, the ability to optimise every aspect of order management across each phase of the order life cycle will continue to be a key differentiator across the retail landscape, ultimately determining which retailers are able to keep promises to their customers whilst still protecting their bottom line.
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