Did you know that approximately one quarter of European ecommerce is cross-border? As online shopping maturity has grown, so have customers willingness to buy from online stores outside of their home country. Yet, the costs to serve these cross-border shoppers can be highly expensive. With the additional last mile delivery and returns costs alone taking an ever-growing share of product margin.
Those retailers that look to recoup costs with higher delivery charges or cheaper shipping options are only suppressing their cross-border potential. For those serious about cross-border commerce, this involves the investment in multiple regional fulfilment centres, with duplicate stock held in-country or region. Even for those retailers there are a number of advantage that a modern order management system can unlock for cross-border advantage. Here we look at 5 advantages that an order management system can unlock
1) Unify your stock visibility across all fulfilment locations
Those with multiple fulfilment centres are often faced with key challenges related to high stock holding levels. Key decisions need to be made about how much stock to order and hold in each location, maintaining a tight balance between markdowns and out-of-stocks. An order management systems allows the retailer to strengthen their position by having an accurate global view, balancing availability in each location as local demand dictates.
2) Ship each order from the most profitable location
A common expansion choice that many make is to have each fulfilment centre dedicated to serving a particular country or list of neighbouring countries. Such a blanket rule does reduce the last mile distance, but calculations are imperfect. Order management systems featuring intelligent order broker engines take into account many factors to calculate the most profitable location. For example shipping costs and speeds, stock-holding levels, markdown levels, and regional demand. Selecting the most optimal and profitable fulfilment location for each and every order.
3) Turn stores into mini fulfilment centres
For those retailers with physical stores in many countries, these can be your biggest advantages to unlock. Turning each of these stores into mini-fulfilment centres significantly reduces last mile delivery distances without the huge investment in dedicated fulfilment centres. Add in the ability to offer more flexible omnichannel options such as click & collect and in-store returns, and these stores become significant weapons at your disposal.
4) Account for regional demand differences
It can often be difficult to predict the popularity of a product at a regional or a country level. Some products simply don’t translate to local preferences and end up sat on store or fulfilment centre shelves, slowly heading for large end-of-season markdowns. By unifying stock visibility across all possible fulfilment locations and balancing regional demand, you will be better prepared to quickly move stock from where it is sat, to where it is needed.
5) Brexit-proof your fulfilment
Despite ongoing Brexit uncertainty, many retailers have already made the decision to setup duplicate UK and European operations. Looking to avoid additional costs and time delays associated with shipping across borders. Order management systems will allow retailers to make intelligent choices such as re-selling returns within country, shipping from the most profitable fulfilment location, and arming local stores with the tools they need to serve their local customers.
You can download our whitepaper on creating flexible supply chains and more insights into utilising order management systems here.