Omnichannel Order Management - Laptop View
Tuesday, November 27, 2018

Omnichannel Order Management – Solving Today’s Challenges

Editor’s Note: This post was originally published in June 2016 and has been updated for freshness, accuracy, and comprehensiveness. 

Omnichannel order management is the technology that provides inventory visibility, routes orders to the best locations for fulfillment, and accepts returns – across all retail channels. Retail channels include physical stores, online, mobile, voice-commerce, text based, IOT, social media, and phone (call center) purchase options. Omnichannel order management is the system that makes omnichannel retail possible. In turn, omnichannel retail lets shoppers:

  • Buy,
  • Collect,
  • Pay, and
  • Return

Merchandise, any way they want.

Executive Challenge

Only 42% of retailers have integrated their OMS with core enterprise applications

Executives in any industry are faced with countless offers, calls, emails, and LinkedIn pitches. This is no different for retail executives. The biggest and primal challenge is to separate what’s important, from the noise. It is true that there are many systems that can improve your retail business. But, the key point is to ask yourself what is deeply important to the business strategy. What is core to retail? More importantly, what is core to the future of retail? Then what strategies will you choose for your retail operation?

Once you figure out your strategic choice points, look for the technology that makes it happen. Another customer email list, call robot, or programmatic ad system isn’t going to do it. These are peripheral. Important? Possibly. But, those are incremental technologies. They aren’t core to getting your strategy rolling.

Omnichannel Retail Strategy

As a strategy, omnichannel methods are creating more than a few small ripples in retail. Sure, it has been the industry buzzword for a while. Yes, it is overused. Yes, many retailers find it difficult to roll out. Yet, more and more customers now expect it. In fact, Cybertill released Retail Consumer Data on UK Parents, stressing this point. Despite it being UK oriented research, it isn’t a leap to see how it applies to other countries just as easily. It found, “British parents spend over £6,000 ($7740 US) dressing their children in their first 11 years! The modern-day parent is an omnichannel shopper, moving between high street, online, mobile, or even an Instagram shop.”

Outside of a few European countries like the UK, it is still not the shopping ‘norm’. But the retail space is getting there. Omnichannel is becoming an expected convenience. Customer expectations are for access, availability, consistency, and fulfillment variety. These are the core opportunities that make omnichannel order management important. This is why executives need to pay attention to this technology, instead of the peripheral systems. The right omnichannel order management system changes your retail paradigm.

Why Is Omnichannel Retail Important?

It’s important because omnichannel shoppers are more valuable to your business.

  • EnsembleIQ: “Shoppers who buy on multiple channels have 30% higher lifetime value than single-channel shoppers.”
  • OrderDynamics: “Superconsumers average $40 extra spend on unplanned additional purchases per trip”
  • Omnichannel ROI: “58.8% of consumers who arrived in-store for a pickup, ended up purchasing more items.”

Long story short; consumers who cross channels when they shop, buy more goods. This is why omnichannel retail is such a hot topic. In turn, it is the key reason omnichannel order management is so important to today’s merchants.

Today’s Omnichannel Order Management Challenges

Outside a few countries like the UK, omnichannel retail is just barely taking root. The Omni-2000 research showed that in the US only 27.5% of retailers offer these conveniences. Canada and Australia were a litttle better at 31.0% and 31.4% respectively. This means most retailers need to find out how to start their own retail strategy. They will face several challenges about their omnichannel order management system.

Things to consider include:

1. Choose SaaS  

Omnichannel Order Management - Laptop

By now this question has been fully solved. No retailer in their right mind chooses an on-premise solution. Yet, there are still a few dinosaur vendors pushing his option. On-prem is dead! The total cost of ownership (TCO) just does not make sense. If you have a legacy on-prem solution, squeeze every bit of juice you can out of it. If you need a new omnichannel order management system – software as a service (SaaS) is the ONLY cost-effective option.

Multi-tenant SaaS systems give you the best TCO. Your core focus is on providing the best retail purchase experience and option for shoppers. So, keep your eye on that target. Let others run the infrastructure. Then focus on customer satisfaction, customer experiences, and running a great retail business.

If a vendor spends ANY time pitching on-prem technology instead of SaaS; find another vendor.

Ask vendors about their distributed order management (DOM) capabilities

2. Show Them What You’ve Got

Today’s shopping starts with online research. No surprise here. Everyone knows this. Except for the simplest of items, people research and shop online. So, don’t miss the opportunity to show them what you’ve got. If you have it in your store, tell them about it. They may need it right now, and drop in. That’s good because in most cases they may purchase additional items while there.

Showing them means showing customers the goods in any given store. Show them that store’s inventory levels. Frankly, customers are starting to expect this as a minimum. The danger is that if you don’t believe this… a ‘wait and see’ choice will just drive shoppers away. Specifically, it will drive omnichannel shoppers away.

Let’s expand that shoppers actually expect real-time inventory visibility. Connecting your old warehouse management system to your ecommerce platform (ECP) doesn’t cut it. If it is a batch run, then the data is always out of date, except at midnight every evening. It also does not capture the online orders, voice-commerce orders, and orders that are processing in-store, right now. The order management system (OMS), captures all this data in real-time.

Looking for increased customer satisfaction? A first step is to rely on your omnichannel order management to provide inventory visibility. Letting shoppers know they can get their items fast, from a nearby store – makes the decision easier. It’s the first step to getting that customer order.

3. Pay Anyway You Want 

Are more retailers offering click & collect than last year? Find our with latest omnichannel research. Download the Report.Ironically, on payments physical retail has the upper hand. But this doesn’t have to be so. Most physical retail stores allow customer to mix payments. In other words, a customer can partially pay on their credit card, gift card, with the remainder paid in cash. Yet, these split payments are a rarity online.

This is a good opportunity to standout as a retail innovator. Advanced omnichannel order management systems allow for split payments. That means your loyalty card can entice shoppers to be loyal to your brand, even online.

4. Omnichannel Order Management = Order Fulfillment

Order fulfillment is about getting a purchased item to the customer as fast as possible. To do so cost effectively means order sourcing goods from the best locations. This needs a system that knows all inventory locations. It also must route from any place in the supply chain.

Retail executives are also faced with improving the chain’s omni-channel operations effectiveness. To do this means leveraging all resources in the chain. That means fulfilling goods with a ship-from-store strategy. It also means allowing for buy online in-store pickup (BOPIS), or click and collect. Ultimately, it comes down to the OMS truly sourcing from any inventory location. That results in omni-channel fulfillment. This means the item is provided to the customer from the most efficient means possible to the retailer, as fast as possible. Naturally, this giving the consumer the fulfillment options about how they want their product. It could be delivered, available for instore pickup, at the courier/post outlet, at a pickup locker, and so on

5. Impact of Returns

Returns management is always a major concern for retail. It is a core omni-channel order management challenge. Specifically, the challenge being how to minimize the impact of returns. Better yet, how to make returns a retail benefit.

Here the first step is offering BORIS. BORIS being ‘buy online return in-store’. Shoppers expect this of all omnichannel retailers. The bonus is the consumer brings the item back to the retailer without incurring another shipping cost. It also means items returned in good sellable condition can be instantly re-inventoried. That means the item is available for resale immediately. Plus, it can be resold without a discount.

Consider too, that when shoppers return items in-store, 53% purchase other items during their trip. This would not be the case if they merely shipped the product back to you. So, the returns challenge is about using the omnichannel order management system to offer BORIS.

6. The Flow of Customer Experience

Today, less than 40% of firms leverage advanced Order Management System Functions

Omnichannel is different from multi-channel retail – from the customer experience aspect. Omnichannel is about giving customers a seamless buying journey. It means they can research products on their smartphone, order online, and pickup in store. All different channels. Yet the experience has to be smooth. It means omnichannel order management must integrate the entire retail technology stack. It has to create a unified commerce experience. This makes the buying journey a continual flow. No stumbles. No irritations. One experience, from one cohesive retailer.

Look for systems that were built to integrate to different best-in-class technologies. For example, a good DOM is designed to be interchangeable with a variety of ECP’s. Look for a Salesforce Commerce Cloud cartridge, or customers connect with Episerver Digital Experience Cloud systems. Make sure the DOM seeks to create a unified commerce ecosystem (converged commerce) with a variety of best-in-class ecommerce and supply chain solutions. Look for that focus on creating the seamless retail buying journey. At the end of the day, that will be the most important aspect of all, in solving these challenges.

Author:

Charles Dimov - Director Marketing OrderDynamicsCharles Dimov is the VP of Marketing at OrderDynamics. Charles has 23+ years experience in Marketing, Sales and Management across various IT and Technology businesses. Previous roles include Chief of Staff, Director of Product Marketing, Director Sales and Category Management for ecommerce and channel goods. Charles has held roles in brand name firms like IBM, Ericsson, HP, ADP, and OrderDynamics.