How Order Management Impacts Retail Sales
Thursday, March 1, 2018

How Order Management Impacts Retail Sales

By now it is clear that to launch or improve an existing omni-channel retail strategy, you need solid retail order management technology. Think about subsystems like intelligent order routing, and effective returns management. Even systems like a dynamic order simulator – all of these shout out “cost reduction”. Yes, cost reductions are an important part of running an effective business, and retail operation. However, sales growth is the more important other side of that business coin, that needs to be addressed. How does effective order management technology grow retail sales?

To answer this, lets borrow a key concept from “Conversion: The Last Great Retail Metric.” Mark Ryski points out a crucial yet simple equation:

Traffic X Conversion X Average Sale = Sales


The first element of a DOM that affects in-store foot traffic is real-time inventory visibility. Most people don’t realize how important this is to customers, until you are personally faced with an urgent need. You look online, but only have 30 minutes to pick up your items before an event. You cannot afford to be late, nor go to the wrong store – that lacks the merchandise. So, you look online to check the retailer within a quick commuting distance from your location. You end up ignoring the retailer that speaks of the item, but does not show inventory availability in preference for the retailer that shows the nearby store having 3 in stock, at that particular location. The first retailer lost the sale. Lost simply because the second retailer shared their detailed inventory visibility down to the store level. It’s just that simple. Inventory visibility increases in-store foot fall, or customer traffic.


An in-store returns management system as part of your DOM, lets you offer a better in-store returns experience. Second, having an effective in-store returns management system as part of your DOM, lets you offer a better in-store returns experience. With the returns capability on an in-store app (for mobile use), your associates can conveniently process returns – and get the items re-inventoried and put back on the shelves, in real-time. Being able to process in-store returns effectively, means customers have the option of bringing in-store bought, and online purchases to the store for returns. Again, this is good for increasing traffic.

About 58% of shoppers prefer to return merchandise in-store. It is immediate, and avoids having to re-box the item for shipping. In addition, it means avoiding the shipping fee back to your location. There is also a feeling of finality about it, that consumers appreciate. Despite being a return, this in-store traffic is good traffic. A 2017 UPS study found that 66% of consumers who returned an item in-store, purchased another item.  This means by offering buy online return in store (BORIS) services, you again increase store foot fall, or customer traffic.


Download the Returns Management Brief Here.Having customers increase their use of your ecommerce store is a good thing. It can be very effective, as there are fewer associate resources needed for those sales. Interconnecting your ecommerce platform (ECP) with your DOM is even more effective. Now you have the option of fulfilling orders not only from your distribution center (DC), but also from your stores. Doing ship-from-store fulfillment means you better leverage store resources, keep more inventory in locations closer to customers, increase stock turnover, and automatically drive greater store conversions. This option also means that consumers could buy online and pickup in-store (BOPIS), which saves even more money on shipping (lowers operating costs).

Even though reserve online pickup in-store (ROPIS) is less common, it is popular with many big ticket retailers like electronics stores (Henry’s Camera, Best Buy), and home furnishing retailers (JYSK Canada, Bed Bath and Beyond etc.). What ROPIS services do is bring customers into a store, where they have reserved an item for purchase. That customer is a highly focused shopper with a high purchase or conversion intent. This is exactly the type of traffic that all store managers want to come into their facilities. Not all shoppers using ROPIS will end up as retail sales. This, even though it increases the odds of increasing store conversions. Again, without a DOM, offering ROPIS is a highly manual or cumbersome process.

Average Sale

Although the dicussion of BOPIS is usually about using it as a means to increase foot fall or in-store traffic, it also drives up average sales.

Although the discussion of BOPIS above is a means of increasing foot fall or in-store traffic, it also drives up average sales. Consider that 58.8% of shoppers purchase additional goods when they come into the store for an order pickup. In effect, you could consider this a conversion enhancer – as the same customer just converted into yet another purchase. After all, now that the shopper is in store, they often recall that they also need batteries, or notices the belt that matches the shoes perfectly.  From a broader perspective, you could see this as the customer increasing the average sale of an order, by the fact that they included more items during their order pickup journey. Viewed as a complete purchasing journey, BOPIS increases the average sale on an order that would otherwise have merely been fulfilled by a last mile delivery.

Order Management Technology Helps Drive Retail Sales!

By borrowing a key concept and formula from Mark Ryski, it is clear that an OMS / DOM helps retail sales. This from each sub-component of increasing traffic, conversion and average sales.


Charles Dimov - Director Marketing OrderDynamicsCharles 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 OrderDynamics





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