In 2020 eCommerce changed forever. By April, the industry saw ten years' worth of growth in just three short months. Shopping is happening exclusively online, and competition has never been greater. To thrive and grow during this hyper-accelerated environment, retailers got to be nimble and shock-proof.
To offset the challenges online, brands need a much bigger digital footprint. This includes selling on new sales channels, marketplaces, and even via retail partnerships. Following a recent report, seventy-three percent of consumers use multiple channels when making a sale. But adding sales channels also adds complexity. How are you going to fulfill customer expectations and face the competition? A part of the solution is an eCommerce order management system.
What is eCommerce Order Management?
eCommerce order management is the process that helps in fulfilling and managing orders online. This includes order routing to printing shipping labels, subscription management, and returns.
An Order management system (OMS) provides integration and automation at every step of the order journey. This enables brands to deliver good customer experiences at every channel. It enables operators to manage orders coming in and going out from multiple sales channels.
Real-time data is at the core of an efficient order management strategy. Retail data now travels through multiple layers of sales channels, technology platforms, and operational infrastructure. With such a lot of data, it’s impossible to depend on static spreadsheets.
How Does Ecommerce Order Management Work?
The goal of OMS is to urge a product into a customer’s hands as efficiently as possible. It manages the journey of every item in the user’s order, from the time it goes into their cart to the time it arrives on their doorstep and any returns which will follow.
1. The order fulfillment process
Every company features a unique approach to fulfillment. This is often based on customers, return processes, fulfillment locations, and vendors. While processes can vary, most order fulfillment processes include the subsequent steps:
The company receives an order from a customer.
The company adds the order into their system.
The customer gets a notification about the company receiving the order.
The order is routed to the closest fulfillment center or warehouse.
An employee picks the order, and the company prepares the shipping process.
The customer receives a notification that the order is placed successfully.
The order is received by the customer.
2. OMS facilitate order fulfillment
The role of an order management system is to form the fulfillment process as automatic and cost-effective as possible. It optimizes these steps to reduce overhead costs and shipping charges and increase data quality. Many order management systems even have functions that streamline credit card processing and returns management.
When a customer pays for something, the OMS updates your account, generates an invoice, and prints a shipping label. When an order ships, the eCommerce order management software tracks the order’s progress by integrating with shipping carriers like DHL or FedEx. Once the order leaves the warehouse, your customer is in a position to trace its progress until it reaches their doorstep. In many cases, this is often facilitated by the OMS.
Reasons Why Order Management Softwares are Important
Most eCommerce brands are unable to grow without the help of an order management system. Customers expect cost-effective, efficient, and personalized order fulfillment. There's no scope for manual error by employees.
1. Fast delivery
In an era where one-day and two-day shipping has become the new norm, companies need to find ways to obtrude orders faster. Fulfillment windows are narrowing. The automation an order management system can provide here is vital.
When a customer order something, an order management system immediately chooses the warehouse that’s closest to the location of the consumer. It'll then send an automatic fulfillment request to the warehouse so its staff can prepare the order as soon as possible and send it to the consumer via the most cost-effective carrier.
2. Fewer mistakes
An OMS cuts down on human error. Human-derived errors are a huge time-and-money waster for businesses, and it’s the highest source of fulfillment mistakes for several warehouses. An order management system cuts down on these errors. An OMS can perform multichannel inventory management and warehouse optimization by sending you alerts to understand when stock levels get too low, or you have an excessive stock level. This prevents delays in shipping and lost customers.
The system also helps in fast and direct communication to multiple warehouses at the same time about which inventory to select and pack. Hence, there are fewer delays by misplacing or forgetting orders.
3. More scalability
An order management system helps your company grow. Unlike manual entry, a rise in omnichannel fulfillment needs won't overwhelm a well-implemented order management system. Its specially designed software is going to help the company to scale as you grow.
Order management systems can help centralize and track data, inventory turnover ratio, and order routing across channels. This is also one of the most important advantages of an eCommerce order management system in today’s eCommerce environment.
Key Features of Effective Order Management
To maximize the acceleration of eCommerce, brands should search for an order management system that supports their infrastructure as it can make or break a business. Here is a list of points to consider -
1. It integrates across company systems
An essential function of an order management system is its ability to integrate across service providers, and company infrastructure. Most OMS integrate with inventory managers, customer service departments, accounting systems, warehouses, and more. Some even have an App Store to create third-party connections if they're unavailable.
2. It eliminates manual processes with automation
The fewer manual processes, the higher. Manual processes can never compare to the speed of OMS, and they are much more prone to human errors. An order management system provides automation wherever possible, from calculating shipping costs to sending fulfillment requests.
3. It provides international services
In today's globalized world, Brands and businesses are accepting orders from beyond their borders daily. Most order management systems can facilitate cross-border eCommerce orders and payments from any country and in any currency type. This expands a brand’s retail footprint and allows them to grow from their experiences in new markets.
4. It forecasts and reports stock needs
Many OMS's have the special power to predict what proportion of safety stock you’ll have to avoid over-ordering, or worse, overselling. This offers more control and autonomy over order management operations.
5. It works on every channel
OMS can fulfill consumer needs across all of the eCommerce platforms and sales channels you’d expect, including your website or eCommerce store, marketplaces, or whatever primary sales channel you sell on. Managing all these orders through a single channel helps a business grow.
A system can integrate all channels in one interface. This drastically reduces the time your staff spends fulfilling orders and training new staff.
The Ecommerce Order Management Process
The lifecycle of order management is guided by providing an excellent customer experience and customer satisfaction. From placing the order till its delivery, and even in returns and refunds, an order management software strives to satisfy all customer needs from start to end.
1. Discovery
The process starts even before the client places an order. The system keeps a record of when a customer places an item in their cart and adjusts the inventory automatically. The system also sends you a notification that the item is in your cart, waiting for you to place the order.
2. Order placement
When a customer plans to purchase, the order management system communicates with the back-office systems to process order details. Once the order is approved, it is often routed to fulfillment.
3. Order fulfillment
Depending on the order details, an order management system will optimize the selection of the warehouse by its proximity to the order destination. It'll then automatically calculate shipping costs.
4. Warehouse management
If an SKU is out-of-stock, the OMS communicates with suppliers and vendors to send the inventory in advance to the warehouse. Stock-outs also can be prevented if your order management system is in a position to automatically issue a sale order when inventory levels are low or hit a reorder point.
5. Shipping
At the time of warehouse picking, packing, and shipping the products, the order management system sends a notification to the customer that their order has been shipped. The customer then can track the package as it travels to its destination.
6. Return and refund
In case of a dissatisfied customer returning an item, the OMS helps in an efficient return and refund system that can go an extended way towards rebuilding goodwill. The system can instantly process a refund request and communicate together with your back-office systems to process the refund.
Challenges or Disadvantages of Order Management
Before you implement an OMS, you must be aware of these challenges-
1. Difficulty of choice
With so many order management software in the market today, it’s difficult to find the most suitable OMS to meet all your online store needs. Few challenges that you may run into include:
An OMS that doesn’t integrate well with your eCommerce platform or existing website.
An OMS that doesn’t continually update based on evolving customer needs or requirements.
An OMS that makes it more challenging to have ordered from your suppliers and inventory visibility.
Complete your research work, ask more questions, and check multiple options before choosing one.
2. Cost
The cost of an order management system varies widely from thousands of dollars per month. If your company cannot afford an ERP system, you might well have to choose a better operations system.
3. Complicated implementation
One of the biggest things that are holding businesses back is the fear of a complicated system that they might not understand. To overcome this issue, look for a vendor or a service provider that offers a demo and ongoing support.
Advantages of an Order Management Software
An order management system is a must in today’s digitally transformed environment. Here are few benefits of an eCommerce order management software -
1. Increased revenue and reduced costs
2. Better employee experience
3. Better customer satisfaction
Conclusion -
Direct to consumer brands and eCommerce companies are continuously finding new ways to fulfill customer expectations. Customers now expect to have software to track their packages and receive notifications, email, and SMS updates about their in-transit order status.
At this point of time, a robust multichannel order management software is the only way to continue innovating and keep up with the pace. It’s the best thing right now for providing a fast, error-free, and personalized, order fulfillment experience.