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Blog / Dec. 13

What To Think About When Choosing An Order Management Solution

Brian Kilcourse, Managing Partner, RSR Research

The percentage of revenue that originates with the digital side of retailers’ selling environments continues to grow. In the U.S. alone, almost 11% of total retail trade is generated via the E-commerce channel. What’s even more important (and harder to quantify) is the percentage of business that begins in the digital space but touches the store at some point in the journey (add-on sales, store fulfillment orders, etc.)

RSR’s 2018 benchmark study on the state of E-commerce found that “68% of Winners <over-performers> believe that 25% or more of their total sales are influenced by the digital channels. Winners express great confidence in their digital futures as well, with 42% indicating a belief that 50% or more of their sales will be influenced by their digital offering <in three years>….”

This is the essence of “omnichannel” retailing; consumers use more than one selling channel to complete a single journey – and the E-commerce platform is often the “front door” to the retailer’s selling environment. As journeys become more complex and as shoppers expect ever more flexibility and speed, right behind the retailer’s digital customer order creation capabilities there must be two more processes: order orchestration and order fulfillment. The lines between these three processes are often blurred, but when choosing a new order management solution, retailers should focus on order orchestration.

Retailers thinking about the requirements of the order orchestration capability should consider the following must-haves:

  1. Flexibility. The order orchestration platform should be able to capture orders from any order creation system. Likewise, the order orchestration platform must be able to support a long list of omnichannel fulfillment use cases, from ship to home to pick up in store and everything in between. It must interface with all the available order fulfillment processes, whether they are in the store, at a direct-to-consumer fulfillment center, at an eaches pick-&-pack facility in the central DC, or at a third-party partner.
  2. Real-Time Ability to “See” All Available-to-Sell Inventory. The order orchestration process must be able to expose available-to-sell inventory from every fulfillment location (store, DC, vendor or even in transit) to digital selling order creation processes, based on rules managed by the retailer (for example, items available only in certain geographies or via certain selling channels).
  3. One Complete View of the Customer Order. The order orchestration platform should provide a single “window” to any order: “header” (customer, etc.) and “line item” (products, quantity, unit price, total price) order information, order status, promotions applied, total price, fulfillment status, payment status, shipment information, open actions, and order history.
  4. The Ability to Collect, Prioritize, and Intelligently Route Orders. Not all orders are created equal. The order orchestration platform must be able to deliver orders to all available downstream fulfillment locations and processes based on factors such as customer fulfillment choices, a determination of the most efficient fulfillment methods and location(s), and back-order rules.
  5. Interface to Payment Systems. The order orchestration process should route payment information from digital order creation systems to the appropriate processor and return payment status information in real time. Payment processor flexibility is also a must as new payment methods and new geographies become more and more important to retail growth strategies.

In today’s retail environment, constant change is the new normal. Retailers should expect a continuing evolution of consumer-facing digital selling and fulfillment capabilities. Retailers should expect that new and increasingly complex order fulfillment processes will continue to emerge as consumers continually redefine “convenience.” By focusing on an order orchestration platform that can serve multiple order creation and order fulfillment processes, retailers can insulate themselves from disruptive changes to core processes, even while the consumer-facing side of the retail model continues to evolve.

For additional considerations on keeping pace with modern order management requirements, check out the iPaper “Five ‘must have’ capabilities to look for when selecting an order management solution.”