Order Management – a lifeline for retailers in a COVID-19 world

Article written by Raghav Sibal, Managing Director, ANZ, Manhattan Associates

The ongoing pandemic has changed the way that people purchase and acquire goods. Soaring demand for eCommerce and increased interest in new ways of collecting purchases, such as curb side pickup and click & collect, mean that Australian retailers are now faced with the challenge of recalibrating their business strategy to serve an increasingly complex omni-channel environment. Alongside various city and state lockdowns, many brands have had to get creative and accelerate their journey towards digital services over the last year. However, not all of them have successfully managed the transition.

To assist, new business-to-consumer distribution models are coming to market, with a core focus on the importance of ‘living’ the omnichannel customer experience, rather than just talking about it. One such model is Order Management Systems (OMS), which integrate all sales and distribution channels into one place, bringing absolute transparency and making it easier for retailers to manage customer orders. An OMS helps retailers to see what inventory they have where, what’s been allocated, what is in transit, what’s been sold, what is available, what needs to be replenished and what’s being returned.

Optimising order sourcing

New demands being placed on retailers today have forced innovation to occur at an unprecedented pace. From adding drop-shipped items to websites to quickly beefing up sales, launching quick ‘on ramp’ digital solutions, or streamlining operations to maximise strained employee bandwidth, the need for innovation through technology has never been greater. In fact, in the latest Forrester Wave Report, it was revealed that 39% of retailers increased their investments in technology immediately after the pandemic began to disrupt supply chain operations.

Without this necessary push towards efficiency-boosting technology, retailers would be left behind their competition. With innovations like OMS, retailers have even been able to review the rules of stock allocation, temporarily giving priority to in-store stock over warehouse stock, thus, freeing up any trapped inventory confined within closed stores. This comes as a great advantage to the many retailers whose physical stores were closed for long periods during lockdowns.

Optimising order sourcing is a new focus for retailers, allowing brands to use the stock available in their entire network, wherever it is located. A smart OMS allows retailers to use the 'pool' of physical stores in large urban areas to offer same day, or next day delivery by couriers, whilst also favouring the warehouse stock for less immediate orders.

Addressing multiple shipments

Recent research undertaken by Manhattan Associates has shown that due to the ongoing impacts of the pandemic and its convenience, home delivery is now the preferred delivery option for 69% of Australian online shoppers. Interestingly, 60% of Australian consumers indicated they often receive their online order in multiple shipments and 81% of them said that they think this is an inefficient and unsustainable way of delivering goods. In fact, the same number (81%) also said they would prefer to receive their order at a later date if it meant that it would arrive in one consolidated delivery. These changing consumer preferences pose challenges for retailers and their supply chains to match their inventory and delivery capabilities against what customers actually want.

For those orders that have to be shipped in multiple deliveries, advanced OMS systems allow customers to view the status of all items within an order in a Digital Self-Service order tracking page. If an order is shipped in multiple packages, customers can view all tracking details, estimated time of arrival, and the delivery date of each package from a single page. If all items have not been shipped, the customer can view the status of all items, including items which are in in-process or cancelled. By providing customers with complete order transparency there is less uncertainty around an order’s status, working to substantially reduce customer call volumes to the contact centre to check where an order is.

Cost-effective omnichannel offerings

In a recent study, conducted by Manhattan Associates and IHL Group, it was revealed that retailers who optimised their digital customer journey saw their margins improve by three to eight points more than those who didn’t. Additionally, by enhancing the customer journey through the use of technology, retailers are equipped with the knowledge they need to understand what their consumers want, and in turn, they can clearly communicate their promises to consumers – such as delivery dates and returns processes - leading to a positive bump in overall margins.

According to several independent studies, the conversion rate is said to increase up to 30% when a brand communicates a precise delivery date promise on a product page. However, 50% of consumers agree that they would in fact abandon a purchase if there was no delivery date indicated at the checkout. This is a good signal of the importance of offering total transparency to the customer regarding their order, as without it, consumers are left uneasy about not only the wait time for delivery, but the credibility of the brand itself.

Turning returns into a positive customer experience

Since the pandemic, the ability to promote a more efficient returns process for eCommerce purchases in-store has become an increasingly important all-round service for brands looking to maintain an adequate retailer-to-consumer relationship. Using an OMS in-store application, customer service teams can directly search for customers’ original orders and records of the returned items. Then, the products that are in return-worthy condition are immediately integrated into the global stock pool, making them available for sale online, even if the item was not originally listed at the point of sale.

For consumers who are on-the-go, new QR code solutions exist which allow customers to drop a return item at a carrier location. The QR code can be made available to customers via email. This avoids situations where customers previously had issues printing a return label at home.

More efficient returns processes enables faster refunds, improved order accuracy, and delivery transparency, develop a greater peace of mind for consumers, and ultimately, improve overall brand advocacy and loyalty – which comes as the biggest advantage to retailers in the long-term.

Managing order cancellations

With more online orders being placed, today’s consumers expect to have full visibility of their order’s progress, as well the flexibility to cancel their order if needed. With an advanced OMS, customers can cancel items that are being shipped to their address before the items have been packed, without having to reach out to the contact centre. Customers can view which items are eligible for cancellation, select items and reasons for cancellation, and preview their new order total before confirming the cancellation.

Supporting order cancellations and changes as late as possible prevents the situation where a customer wants to cancel an item that has already reached the ‘point of no return’ in the fulfilment process. When these situations occur, it causes friction and frustration for the customer who has to receive and return the item, plus time and cost for the retailer who will often have to absorb the shipping and handling costs for both the shipment and the return.

Order Management for future-proof retailing

With the everchanging nature of the retail landscape, and the increasing demands and expectations of consumers, enhancing retail operations with innovative technology such as OMS will serve as a way for retailers to optimise their operations for the future, to withstand even the harshest fulfilment, delivery, and customer services challenges.

For more information on Order Management from Manhattan Associates, go to: https://www.manh.com/en-au/products/order-management