Order Management: An Engine for Delivering Rapid Omni-channel
Shoppers want to order, pay, collect and receive their goods in the most convenient way to suit their lifestyle. They want a consistent experience regardless of the channel in which they browse, order or return their goods.
To meet this rising demand, retailers offer ever more innovative and flexible propositions for their customers to ensure advocacy, attract new buyers and stay ahead of their competition.
These brands are increasingly leveraging their store networks to differentiate themselves from online retailers. By offering customers same-day delivery or click and collect from a local store (even if the product is not ranged there) customers have greater flexibility in when, where and how they receive their goods. The “Hub and Spoke” supply chain store model allows same day movements from the hub (full range) to local spoke store (limited fast movers) to deliver on the customer collection promise.
Many high street retailers have increased engagement by offering an expanded catalogue through relationships with drop ship vendors and marketplace initiatives. The role of the high street store is also changing. Brands like American Eagle and M&S use their stores as online fulfilment centres. Benefits include avoidance of markdowns, reduced inventory and fewer out of stock situations; but with the introduction of a whole set of new process and execution challenges. Many retailers have international franchises and concessions to further complicate matters.
So how do these organisations do it? This level of omni-channel agility is difficult to achieve – but has set the standard in the UK retail market adding ever more cost and complexity to the supply chain and supporting IT systems. Providing flexible 24×7 customer fulfilment options in real-time and at scale is difficult enough – but doing this at a competitive cost requires additional intelligence in the process.
The Engine to Deliver Omni-channel
An Order Management System (OMS) provides the engine to address these types of omni-channel processes. It delivers the intelligence to find the best inventory to meet customer demand and orchestrates the fulfilment process to get it to the customer door, the store, a locker or in fact wherever the customer wants it. If done well, it ensures the call centre, store and online interactions deliver a consistent yet personalised experience for the consumer by providing a central hub for all omni-channel order engagement.
A broadly held perception is that an OMS project requires a complex multi-year program before it delivers results back to the business. Indeed, early OMS projects often involved detailed inputs from many business stakeholders, complex integration to core systems and a significantly shifting scope during the project lifecycle. This combination could often result in longer project timescales.
Modern OMS projects are different – they need to return value back quickly to the business, with the ROI from each release helping fund the next. Multi-month, omni-channel projects are now planned as part of a roadmap of OMS releases often broken down by fulfilment use cases such as “Click and Collect”, by region or business area.
For example, a premium fashion brand recently delivered a Store Inventory Availability OMS solution in 12 weeks across their North American and European Store network as the first phase of an ambitious global rollout of omni-channel.
Of course, this still depends on the readiness of the retailer and the project approach but is now being seen as a consistent trend in the market.
So, what has changed to allow omni-channel to be delivered incrementally?
A Focused, Prescriptive Approach to OMS projects – Experienced implementation partners now deliver best practice retail templates that can accelerate initiatives such as “Click and Collect”, “Ship from Store” and “Buy Online Return in Store”, and importantly, only deviating from this prescriptive engagement when absolutely necessary. This approach alongside iterative project methodologies such as “agile” and the reuse of common integration patterns combine to enable significantly faster project timelines.
Technology Accelerators and the Cloud – The introduction of “Order Management as a Service” using cloud technology has delivered new improved tools and techniques to implementation teams. The ability to encapsulate and quickly deploy/scale new development environments has increased quality and decreased timelines while empowering development teams to innovate more quickly.
US fashion retailer Charlotte Russe https://www-03.ibm.com/press/us/en/pressrelease/51857.wss delivered an aggressive end-to-end integrated eCommerce, Call Centre and Order Management Cloud project within 7 months.
The speed of these projects allows retailers to continually evolve their fulfilment propositions and means that Order Management can no longer be seen as a “back office” system. As a core building block of a retailer’s digital front office, OMS must now provide a highly available, secure and scalable service with the flexibility to deliver new omni-channel innovations in shorter cycles.
This is a guiding principle of adidas who use cloud technology to deliver a centralised omni-channel program across a network of international retail stores and franchise partners, region by region across the world.
Join the webinar to listen to adidas discuss how OMS forms a pivotal part of the omni-channel digital ecosystem.
And What’s Next?
The new frontier is to weave Cognitive technology into the whole promising and fulfilment process. Retailers are starting to introduce ways to further optimise fulfilment and profitability, with these systems learning and improving over time. Targets for improvement include reducing shipping costs, out of stocks, supply chain bottlenecks and markdowns – aimed squarely at improving customer service and impacting the bottom line.
To achieve these goals retailers must glean better insight into the entire supply chain including historical and future patterns using feeds from promotional, social, weather and other external data.
A large US retailer has used Cognitive fulfilment optimization technology in conjunction with OMS to drive down shipping costs from it’s DC and store network by between 7 and 10% saving millions of dollars per year.
These cognitive learning systems can have a considerable impact on the cost to serve the consumer. They can also enrich the customer service experience by using insight to proactively highlight fulfilment anomalies and suggest best courses of action for resolution. It’s still early days but this is the future for the industry.
Other initiatives include using cognitive tools to accelerate call centre problem resolution and smart self-service tools that help customer services staff and consumers access the information they need more quickly using natural language rather than through screen navigation.
This OMS technology evolution is ultimately about improving the speed and cost at which retailers can both deliver and grow new omni-channel fulfilment propositions. Providing an exemplary customer service at the optimal cost will push future OMS strategies towards cognitive technology that can automatically learn, enhance and improve the way that service is delivered.