Lessons learned from leading retailers: Four elements of successful omnichannel order management strategies
Retail just keeps getting tougher. Customer demands for flexibility and agility from the brands they shop continue to escalate as new competitors put pressure on price. They expect more choice and speed combined with relentlessly effective execution at every point in the shopping journey, including—and perhaps most importantly—how they choose to have their orders fulfilled. At Aptos, we have learned from our experiences with hundreds of retailers around the world that order management excellence is critical to delivering the fast, flexible and effective experiences shoppers expect. Along the way, we have assembled a list of capabilities that successful order management strategies typically include. From real-time inventory visibility to customer and order integration, there are several critical factors that leading retailers consider when they develop order management strategies for today’s omnichannel journeys.
Introduction
Read on for a summary of those factors...
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Flexibility
In every retail category, in every part of the globe, one thing is abundantly clear: meeting customer expectations for fulfilment begins and ends with offering choices. Choices for when, where and how they buy as well as choices for when, where and how they receive their purchases. And those choices need to be able to adapt as market conditions and technologies evolve. Clearly, order management processes must be designed and built for change. Processes must be developed for flexibility and people must be taught to expect relatively constant change. Order management technology must be able to capture orders from any channel and platform. The organization and the supporting technology must be able to execute against a long list of omnichannel fulfilment use cases, from ship to home to click and collect and everything in between. Order fulfillment processes – whether in a store, fulfillment center, supplier or fulfillment partner – must be designed for communication and collaboration. And the technology must be capable of fast and easy integration as channels, options, processes and technology change.
Building flexibility into order management: a checklist
Start by fully accounting for the selling and fulfillment choices options most preferred by your customers today. Then investigate the options offered by other retailers – both competitors and retailers in other categories – to look for options that your customers might utilize, should you decide to offer them. Thoroughly examine the number of fulfillment use cases supported by any OMS technologies being considered to support your strategy, and investigate each platform’s ability to add new use cases as market conditions evolve. Identify the critical points in each process that must be able to adapt as the list of options changes over time, and rigorously test each of those points for flexibility. Carefully evaluate the integration abilities of all technologies that impact – or are impacted by – the order management process, and understand their ability to support your need to adapt.
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Develop a change management process for the initial process implementation that includes IT, Store Operations, Marketing, Supply Chain and Omnichannel teams. Establish – and monitor closely – communication channels from across the enterprise to ensure that any issues or challenges are escalated and quickly addressed. Continuously monitor customers, competitors and other retailers to ensure the business keeps pace with shifting expectations. Develop – and regularly update – a change management program that persists long after the initial program implementation is complete to ensure new processes can be swiftly implemented and perfected.
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Lessons learned from leading retailers: Flexibility
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Real-Time Inventory
In this era of high expectations and seemingly limitless choice, keeping customer promises is more critical than ever. The brand damage sustained when orders are late, not fulfilled, or when customers who drive to a store to collect their order go home empty-handed can be unrecoverable. Even one broken promise can send customers to your competition. These types of situations occur when retailers make customer promises based on outdated inventory information. Inaccurate inventory information – even if only a few hours out-of-date – can also have massive impacts on revenue: if digital channels don’t have up-to-the-minute inventory information, available to promise calculations will reach safety stock thresholds and pull items from the website, even when there is plenty of product to sell.
Real-World Impacts: How offline inventory becomes “invisible” to available to promise
Lessons learned from leading retailers: Real-Time Inventory
In this scenario, the not real-time retailer is forced to remove the items with "invisible" inventory from their digital channels at 4:00 pm (when available to promise reaches zero), causing them to miss 250 online orders.
Real-Time OMS
Not Real-Time OMS
Recorded
Pending
100 500
DC ON HAND STORE ON HAND
Actual available to promise 600
Recorded available to promise 600
Invisible to ATP 0
4:00 am
Overnight merchandising system updates complete
+500 -80
DC RECEIPT ONLINE ORDERS
Actual available to promise 1020
Invisible to ATP 420
8:00 am
Inventory begins to move around the enterprise
-300 +200
POS SALES STORE RECEIPTS
-300
POS SALES
+200
STORE RECEIPTS
Actual available to promise 920
Recorded available to promise 300
Invisible to ATP 620
12:00 pm
Sales and inventory begin to pick up the pace
-300 +50
POS SALES ONLINE RETURNS
+50
ONLINE RETURNS
Actual available to promise 670
Recorded available to promise 0
Invisible to ATP 670
4:00 pm
The business is fully engaged and people are shopping
-250
ONLINE ORDERS
0
Actual available to promise 420
8:00 pm
Prime time shopping has been in full swing for hours
8:00 pm The real-time retailer has sold an additional 250 units since the not real-time retailer removed the items from their digital channels.
4:00 pm This item is no longer available for sale on digital channels, even though there are 670 units on hand.
600
Actual available to promise
Recorded available to promise
Invisible to ATP
1020
420
920
300
620
670
Click and collect. Endless aisle. Ship from store. Return in store. The store is now inextricably connected to an ever-increasing percentage of online orders. Store personnel have become an important extension of the order management lifecycle and must be considered critical to all order management strategies. It follows, then, that OMS integration to in-store systems is also a critical part of any order management strategy. Deep integration at the POS will improve both the customer experience and associate productivity.
Why POS and OMS are better together
A few key integration points:
Tight integration to POS
A few key POS - OMS integration points:
OMS worklists visible on POS Pick, pack and ship assignments via POS Order updates and messaging delivered via POS Order status changes entered via POS Online orders accessible – and editable – on POS
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POS and OMS convergence is important most of all for that seamless customer experience.
To learn more about the convergence of OMS and POS, watch the Retail Systems webinar.
Listen to Robin Cox, Order Management Solution Consultant for Aptos, describe why she believes tight integration of OMS and POS systems is a critical part of any successful order management strategy.
Lessons learned from leading retailers: Tight integration to POS
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A customer-first approach
Customer expectations aren’t slowing down any time soon. Their desires for speed, flexibility, value and most of all, options, continue to expand. That’s why we have found that the best order management strategies begin with the customer. The origins of order management are deeply rooted in supply chain and inventory optimization, which tends to please the bottom line. However, these supply chain-first approaches typically leave retailers constantly scrambling to keep pace with what the customer wants, which directly impacts the top line.
27 customer use cases to consider in your order management strategy
This scrambling to meet customer expectations also ultimately impacts the bottom line as well, as processes, tools and people are often cobbled together in desperate attempts to quickly create new offers and options that will meet customer demands. Successful order management processes are designed with the customer as the first and most important consideration. Understanding the customer use cases that are important to your target customers today and anticipating those that will be important to them in the future are critical building blocks to successful long-term strategies.
Buy online, ship to customer (from warehouse) Buy online, ship to customer (from store) Buy online, ship to customer (from vendor) Buy online, ship to customer (from vendor PO) Buy in store, ship to customer (from warehouse) Buy in store, ship to customer (from store) Buy in store, ship to customer (from vendor) Buy in store, ship to customer (from vendor PO) Reserve online, pickup in store (from local store inventory) Order via call center, ship to customer (from warehouse) Order via call center, ship to customer (from store) Order via call center, ship to customer (from vendor) Order via call center, ship to customer (from vendor PO) Click & Collect (from nearby store) Click & Collect (from local store inventory) Order via call center, pickup in store (local store inventory) Click & Collect (ship to store from warehouse for pickup) Click & Collect (ship to store from another store for pickup) Click & Collect (ship to store from vendor for in-store pickup) Buy in store, ship to store from warehouse (for in-store pickup) Buy in store, ship to store from another store (for in-store pickup) Order via call center, ship to store from warehouse (for in-store pickup) Order via call center, ship to store from another store (for in-store pickup) Buy future inventory online, ship from warehouse Buy future inventory in store, ship from warehouse Buy future from call center, ship from warehouse Buy from marketplace, ship from warehouse
Learn more about how Aptos OMS can support all of your priority use cases
Lessons learned from leading retailers: A customer-first approach
Find out how Aptos OMS can support all of your priority use cases.
Conclusion
In today’s retail environment, “constant change” is the new normal. Retailers should plan for the continuous evolution of selling and fulfillment strategies. Retailers should expect that new and increasingly complex order fulfilment processes will continue to emerge, as consumers continually redefine “convenience.” Our experience suggests that retailers who meet customer expectations for omnichannel flexibility will be rewarded. By focusing on an order management strategy designed for the customer and built for change, retailers can insulate themselves from disruptive changes to core processes, even while the consumer-facing side of the retail model continues to evolve. An evaluation of Aptos’ clients showed a dramatic difference between those who have embraced omnichannel flexibility, and those who have yet to do so. Clients who have fully embraced omnichannel flexibility consistently outperform those who limit customer options and choices.
About Aptos
Aptos is the worldwide leader in Unified Commerce. For more than 40 years, we have specialized in helping retailers deliver unified brand experiences by connecting customers in every channel to products across the extended retail enterprise. Our Merchandising, Inventory, CRM, Sales Audit, POS and Order Management solutions work seamlessly together to help hundreds of retailers always stay prepared for whatever shoppers will expect of them in the future. Aptos solutions are live in more than 125,000 stores around the world, where they ensure that the store experience — still the centerpiece of the vast majority of omnichannel shopping journeys — remains relevant, empowering and engaging. Our rich history as one of retail’s leading technology solution companies ensures that every client, in every part of the world, is always prepared to thrive, no matter what the near future may bring. Learn more about how we can help your stores prepare for the near future of retail at aptos.com.
Learn more about how Aptos helps retailers implement flexible, adaptable and customer-first order management strategies
Lessons learned from leading retailers: Conclusion
Find out how Aptos helps retailers implement flexible, adaptable and customer-first order management strategies
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