5 Considerations When Selecting An Order Management System
By Nicola Kinsella, Fluent Commerce
Customers today expect to be able to make purchases on their preferred channel, be it online, marketplaces, social media, stores, etc. In fact, 40% of customers are ready to discard a purchase if they cannot do it on their favorite channel.
Furthermore, customers expect faster delivery and more convenient fulfillment options, such as free, next-day shipping and in-store pickup options like lockers and click & collect. The complexity of order fulfillment is growing, nearly exponentially, as brands grapple with balancing increased customer demand for channel and delivery options as well as fulfillment strategies like third-party logistics, distribution centers, and drop-ship vendors.
Tackling eCommerce Complexities
Order management systems (OMS) have been utilized by retailers for years to help manage and track the entire order process. Traditional OMS enables customer service capabilities for the eCommerce channels, like editing orders and applying appeasements. However, it doesn’t address routing capabilities, which are increasingly important to modern retailers.
Distributed order management systems (DOM), a modern, intelligent OMS, apportions order fulfillment to the most optimal location depending on a retailer's specific requirements. This includes variables such as proximity to the customer, cost-effective and sustainable fulfillment, fulfilled from the store with the lowest sell-through rate, or from the location with the most inventory and more. It meets all primary customer service needs but also provides inventory and order visibility across all channels. Retailers that deploy DOM find it easier to enable advanced omni-channel fulfillment capabilities such as click-and-collect, ship-from-store, omni-channel returns, and complex order routing. Not only that, but DOM facilitates configurable order processing and intelligent order-routing algorithms that deliver additional efficiencies, like minimized shipping costs and time-to-deliver, to meet rising order complexities.
Choosing The Right Omnichannel Solution
How does a brand go about choosing an OMS or DOM vendor? To answer this question, we can examine the experiences of outdoor retailer Woolrich, who recently made the transition to omni-channel. Their journey lends some valuable lessons learned that can be applied by virtually any other brand in business today.
Like most retailers around the world, Woolrich faced many hurdles at the beginning of the pandemic. Woolrich is the oldest American outdoor clothing brand with 190 years of American heritage. It distributes in 45 countries through a network of 35 stores worldwide. Despite its strong foundation, Woolrich was still among millions of other retailers forced to close all of its boutiques and switch over to a ship-from-store model due to the global pandemic. They were able to keep their two biggest stores open to fulfill orders, which helped them keep their brand alive even with their stores closed.
To aid in this transition, Woolrich deployed Fluent Commerce to evolve its core business to meet modern shopping trends and bolster speed and convenience for its customers to stay nimble and competitive. By partnering with Fluent Commerce, Woolrich grew their digital channels by integrating with their Salesforce architecture, and crucially, providing support from a single partner across eCommerce and OMS implementations, removing complexity. Throughout the last two years, Woolrich’s team has gathered plenty of best practices when it comes to selecting and deploying an OMS solution. Denis Negri, Omnichannel Operations Manager at Woolrich, weighs in on the following considerations when choosing a new order management system.
- Identify Your Challenges
Before using Fluent Commerce, Woolrich didn’t have an OMS in place at all. One of the biggest challenges this presented was that they couldn’t ship from more than one location. They also faced stock issues on a lot of products at the beginning of the pandemic. For them, their biggest challenge was global inventory visibility. If they could gain better visibility into their stock, they could improve customer experiences and convenience by offering ship-from-store, click-and-collect, and store returns. Other retailers might struggle with fulfillment optimization or customer service. Whatever the case may be, identifying the specific challenge facing a brand is a critical first step in choosing the right eCommerce vendor. Narrowing in on the most important priorities will require leadership to speak with the right people internally to get a better understanding of strengths, weaknesses, and residual areas of focus that need to be addressed by a new OMS.
- Is SaaS Right For My Business?
Most retailers have some sort of cyclical sales pattern that impacts their order management needs. For Woolrich, being an outdoor winter clothing brand, 80% of its sales occur between September and March. This meant that the solution they chose must be able to handle and adjust to those fluctuations in demand. Most companies enjoy a SaaS-based solution because they are uniquely equipped to provide flexibility to users, and they are especially popular among smaller companies that don’t have the internal capacity to support a full in-house OMS system.
- Estimate The ROI Of The Solution
Beyond just money saved, the ROI of the right OMS solution should extend into other areas of the business, like customer retention, labor savings, and shipping efficiencies. Calculating the ROI of an OMS ahead of time will require companies to compare the benefits vs. costs of a wide range of product offerings, as many omni-channel software providers offer everything from off-the-shelf to highly customized solutions. What works for one brand may not work for another, so it’s important to determine the needs and goals of the brand. For Woolrich, they began with several off-the-shelf solutions that were able to be implemented extremely quickly (within a matter of weeks). The advantage of this is that ROI was demonstrated quickly, which can help internal conversations and create stronger support for further expansion.
- Consider The Number Of Customer Journeys You Want To Offer
While every brand entered the pandemic at a different stage in their eCommerce journey, the mix of customer journeys has certainly changed drastically for everyone. For some, offering greater online and ship-to-store options were critical, for others, improving customer experience and returns process took center stage. Whatever the case may be, brands must determine how many customer journeys they need to offer and select an OMS that can support that. For Woolrich, that meant expanding into a much wider range of customer journeys, including ship-from-store, click-and-collect, and store returns, which was relatively new territory for the brand. However, with the right OMS platform, Woolrich had no issue adding those customer journeys to its scope of capabilities.
- Think About Scalability
In the case of Woolrich, it started small, and every week it added new features and capabilities to reach a full roadmap of evolution. Because it had chosen partners that were already equipped to grow at scale, it could achieve this growth very quickly. It started in mid-May and it took only about three months to develop a full-fledged order and returns process. Choosing an OMS solution that offers pay-as-you-grow is typically a wise choice for first-time users.
Pairing up with the right OMS solution can lead to many significant improvements, including increased sourcing and allocation optimization, better customer order management, more cost-effective delivery and order fulfillment, and deeper inventory visibility. However, not all OMS solutions are created equally, so brands need to come prepared with the right questions ahead of selecting a vendor.
About The Author
Nicola Kinsella is SVP of global marketing at Fluent Commerce.