Delivering an optimal customer experience is one of the biggest challenges retailers face in today’s omnichannel marketplace. Never before has supply chain management been so critical. Retailers need to be able to optimize inventory across multiple fulfillment sources (warehouse, store, and vendor), efficiently manage backorders, process a higher volume of returns and exchanges, and still achieve profitability.
All of these actions require much more sophisticated technology solutions than many retailers’ existing legacy systems can support. While it can play a valuable role, a traditional Warehouse Management System (WMS), for example, is simply not up to the challenges of omnichannel operations on its own. It can’t handle backorder management, purchasing or rapid replenishment. It is limited to the four walls of the distribution center.
It’s not surprising, then, that retailers are seeking a more sophisticated technology solution. Many have found that an Order Management System (OMS) can help deliver the desired customer experience. In fact, 73 percent of retailers plan to utilize an OMS as their unified commerce platform within 3 years.
Benefits of Order Management
An effective OMS is able to address many of the omnichannel challenges described above. Here’s a look at five key benefits.
1. Improve inventory visibility
The ability to find inventory information online is a deal breaker for many end-customers. In fact, 80 percent of consumers are less inclined to visit a retailer’s physical store when the website does not include current product availability. Customers also want to be able to track their orders and see when they will be delivered.
With an OMS, retailers have the ability to see inventory across their entire enterprise: warehouses, stores, vendors (for drop shipments), in transit and available to promise. They’re also able to view orders as soon as they’re placed all the way to the end customer—and back if necessary. In addition to improving visibility internally, they can share detailed information with their customers—from online and in-store product availability to backorder status to shipment tracking.
This level of visibility is the Holy Grail for retailers. While 60 percent say they are making inventory visible across channels, 80 percent of retailers say they could use improvement.
2. Optimize order fulfillment
In an omnichannel environment, silos are simply not an option. Rather than keeping all of their products in one location, retailers need to distribute inventory across multiple locations—stores, various warehouse locations, vendors, etc. An OMS can determine which fulfillment source to pull from to ensure the fastest and most affordable service.
For example, if a customer places an order to be shipped to Wisconsin and a retailer has inventory in Charlotte, San Diego, and Chicago, shipping the order via one-day ground from the Chicago location would be most efficient and cost-effective. If all of the items are not in stock in that location, the system can identify an alternate option such as shipping individual line items from different fulfillment sources> to ensure that items are delivered as quickly as possible for optimal customer service.
3. Provide seamless service across distribution channels
Customer demand for a seamless omnichannel service experience is exploding. In fact, 90 percent of consumers expect a consistent customer experience across channels and devices when they interact with brands.
With an enterprise-wide view of inventory and the ability to pull from a variety of fulfillment sources, an OMS helps to ensure that the products customers want are at their fingertips whether they’re ordering online, by phone, by mail or from a store. An optimal OMS solution integrates seamlessly with the Warehouse Management System (WMS), Transportation Management System (TMS) and other existing systems to manage order processing through to the end customer.
4. Reduce supply chain costs
Retailers spend an average of 18 percent out of every dollar to satisfy customers’ expectations to buy anywhere , pick up anywhere. That kind of investment is simply not sustainable in the long term, so naturally, retailers are seeking ways to control costs.
An OMS can help to manage costs by optimizing inventory, increasing efficiency, identifying cost-effective transportation options and more. Having the ability to offer “ship to store,” for example, allows retailers to save money on shipping and related delivery surcharges while getting the customer into their brick-and-mortar store with the potential for incremental sales.
5. Meet end users where they are
An OMS can be a particularly powerful tool for small to mid-sized retailers who want to maintain their relationship with the customer instead of selling their products on a marketplace such as Amazon. It gives them the technology required to offer BOPIS, ship from store, ship to store, etc. and provides a unified solution for backorder management—exchanges, returns, etc.
To learn more about order management systems and the omnichannel customer experience, read our new whitepaper “OMS: Key to the Optimal Customer Experience.”