Categories: Thought Leadership
NRF’s Big Show: What is New in Order Management Technology?
NRF’s Really Big Show is an exciting experience to behold. There were a mind-boggling number of booths, and people scurrying about. Hundreds of discussions and sessions devoted to the internet of things (IOT), social retailing, unified commerce (aka: omnichannel retail), and digitizing the physical store, played out through the event and trade show floor. Some of the Watson demonstrations of AI (artificial intelligence) were cool, eye-catching, yet underwhelming at times (they are still working on it though). Whereas some of the in-store robotic demonstrations, like Pepper, were quite interesting and impressive. The evolution of digital retail is starting to parallel that of the digital marketing revolution, with real-time in-store customer analytics. But was there any innovations when it came to order management technology?
Anything New in Order Management Technology?
With an order management lens on, OrderDynamics was at this year’s show, partnered with Blue Ridge Global. A few competitors were there too. Despite seeing several nice user interfaces, I was disappointed with the lack of significant new ideas in order management technology. Most vendors touted it as a product on the backend. It just did order routing, and perhaps provided some inventory visibility. Most forgot to make mention of returns management. If you are a retailer, you know this is a critical component of a robust order management system. What made me suspicious is that if it wasn’t discussed, then what was being hidden? Maybe you just cannot expect it to be part of light order management systems in a software suite, or Point of Sales solution.
Fortunately, OrderDynamics and Blue Ridge co-operated on the show to develop a new concept to improve the retail business, overall. As you know, OrderDynamics is a leader in best-of-breed order management systems (OMS) – which definitely includes returns management. Blue Ridge is a leading native SaaS supply chain planning (SCP) developer. Their focus includes machine learning to provide unparalleled demand forecasting accuracy, with some remarkable client achievements. The creative development is to merge a world-class order management technology with a learning and adapting SCP solution in a close loop retail environment.
Inventory Where and When You Need It
Combining an OMS with an SCP creates a closed loop retail system. The SCP needs accurate, detailed, and location based SKU (Stock Keeping Unit) details to create accurate forecasts. A good OMS provides a real-time picture of all of a retailers inventory positions, across all locations. Furthermore providing it as a centralized customer and order system of record. Providing this real-time detailed and location based data from the OMS to the SCP provides a full picture of a retailers inventory and historical demand. That lets the SCP generate an accurate demand forecast.
With an accurate current state, the SCP uses sophisticated forecasting algorithms, and machine learning to provide the future state SKU and location-based demand forecast. That means the forecast is not only made on a bulk units basis. But a SKU level demand expectation is planned on a location by location basis. Not only does it provide a retailer with the opportunity to reduce excess inventory, it also lets them place the right level of inventory, in the location expected to experience demand for those items. This is the ideal matching that all retailers crave. Not only does this increase the chance of closing the sale immediately, it also lets you carry only the inventory you actually need.
Putting Returns Where They Are Wanted
Although ‘returns’ is a curse-word in the land of retail, an intelligent returns management system is not. Getting your order management technology and SCP connected and communicating effectively, is important. Doing this, retailers will get an unprecedented means of reducing the need to discount returned items. Estimates are that only 20% of returns are defective. However, only 48% of returned items are resold at full value, according to Gartner.
With a system that updates inventory in real-time (the OMS), the SCP provides a forecast for where that inventory will next be needed. That means a return at one store can be directly sent to another location. Naturally that location being the one in which demand is expected next. Not only will the retailer sell more of their returns, faster; they would also be able to sell more returned merchandise at full value. Effectively, this can increase both returns turnover and better margins. Not only is there less need to discount returned goods, the retailer can lower their own shipping fees. Shipping directly from one store to the next where the product is needed, means no return shipping to the distribution center. That is one less shipping point, and two less shipping routes and costs.
Best Part of NRF
One of the most interesting aspects of NRF’s Big Show is the opportunity to learn about new developments in the industry. Vested interest aside, on the order management technology side one of the most innovative conceptual developments was that of bringing together the best of a leading edge OMS and SCP solutions. This is the type of thinking needed to bring more innovation to retail technology and supply chain industries. It will help retailers improve their bottom line and margins, which is a big step forward for retailers. This OMS + SCP marriage is yet another step toward an adaptive and dynamic world of in-store digital retail.
More information is available in a short 2 page OMS + SCP brief, outlining the OrderDynamics and Blue Ridge solution.
Many thanks to the Blue Ridge team for partnering and hosting OrderDynamics on their booth this year at #NRF2017 !
Charles Dimov is Director of Marketing at OrderDynamics. Charles has 21+ years experience in Marketing, Sales and Management across various IT and Technology businesses. Previous roles include Chief of Staff, Director Product Marketing, and Director Sales. Charles has held roles in brand name firms like IBM, Ericsson, HP, ADP, and OrderDynamic.