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Five underrated but significant benefits of OMS to retailers

retail
(Image credit: Image source: Shutterstock/Maxx-Studio)

E-commerce; curbside collection; click and collect; ebookings .... Faced with the confinement and challenges of various national 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. Alex MacPherson, Director of Solution Consultancy and Account Management at Manhattan Associates looks at the evolving B2C distribution models and the importance of actually ‘living’ the omnichannel customer experience, rather than just talking about it.  

Online orders have exploded over the last 12 months. The question is: how have retailers been able to absorb this spike in digital orders? Partly, it has been thanks to Order Management Systems (OMS), which integrate all sales and distribution channels into one place, bringing transparency and making it easier to manage customer orders. 

Benefit one: Optimizing order sourcing

Thanks to efficient OMS, some retailers have been able to review the allocation rules. This temporarily gave priority to in-store stock over warehouse stock, thus freeing up trapped inventory confined within closed stores – this was a big win as when many physical stores were closed at the beginning of the year when in-store, non-essential shopping was not permitted. 

For example, a customer who had just launched its OMS to optimize warehouse preparation flows at the end of 2019 was able to launch the ship-from-store function in less than two weeks. Meaning that in reaction to the closure of its distribution center it enabled it to quickly resume orders on its digital channels thanks to the available stock in its shops. 

OMS benefits retail brands in other ways, too, for example, it better equips brands that also sell their products on digital marketplaces such as Amazon or Zalando. They can choose whether or not to include their shop stock in the pool of stock available for sale on these platforms.

optimizing order sourcing is one of the great strengths of an effective OMS, which allows brands to use the stock present in their entire network, wherever it is located. This is exactly what a smart OMS enables: the use of a 'pool' of physical stores in large urban areas, that offer retailers same day, or next day delivery by courier; while, at the same time, favoring the warehouse stock for less immediate orders.

Benefit two: Cost-effective omnichannel offerings

A great OMS allows a precise promise to be communicated very early in the customer journey directly leading to this positive ‘bump’. In a study conducted in January 2020 by Manhattan Associates and IHL Group, it emerged that retailers who optimize their digital customer journey see their margins improve, by three to eight points more than those who have not yet done so.  

In addition to this and according to several other independent studies, the conversion rate increases up to 30 percent when a brand communicates a precise promise and date on a product page. Whereas, on the other hand, 50 percent of customers say they abandon their basket if no delivery date is provided on the site (source: UPS). This is a good indication of the importance of offering total transparency to customers regarding their orders and keeping the customer at the forefront of retailers’ business decisions.

Benefit three: Transforming stores and their associates

Transforming stores into fulfillment hubs has been key over the last 12 months. Modern and effective OMS systems typically have some form of Customer Engagement add-on modules to their systems, which can be used by both Customer Service and in-store teams. This unifies the interactions between the brand and its customers via digital channels (website, brand app, social networks) and in-store visits.  

Sales assistants now have access on mobile tablet devices too (always in a single application) giving them full visibility to the information that will enable them to personalize the in-store experience with the customer. Having access to customer preferences, wish lists, order histories, and cases in progress with customer service, will be available at the touch of a tablet further supporting a more personable interaction to enhance the customer experience.  

Benefit four: Turning returns into a positive customer touchpoint

Over the last year, the ability to promote more efficient returns of e-commerce purchases (to physical stores) has become an increasingly important all-around service for brands looking to maintain consumer mind-share.  

An OMS in-store application allows customer service teams to directly search for the original order and record the returned items. Products in good condition are immediately integrated into the global stock pool, making them available for sale online, even if the item was not originally listed as such at the point of sale.  

As for the customer benefits, they experience a faster refund process, improved order and delivery transparency, greater peace of mind and, ultimately, improved brand advocacy and loyalty. Which, let’s face it, in times like we’ve witnessed over the last year, is worth its weight in gold!

Benefit five: The rise of cloud within this scenario

In addition to this, it is also worth noting that over the last 12-18 months, the pandemic has brought about dramatic change in the retail sector. We’ve seen store closures, acquisitions, and some new brands arriving on the scene. It’s certainly tumultuous. And, through this period, the ability to adapt, evolve and survive was greatly driven by firms’ abilities to pragmatically move with agility and move systems into the cloud. 

This is why it is important that retailers consider whether their OMS systems are cloud-based or can become so eventually. For instance, research by The Cloud Industry Forum says 88 percent of organizations expect their adoption of cloud services to increase in the next year. And, if retailers want to continue to innovate, they must consider the cloud in their future too. 

Conclusion

It’s clear that a reliable OMS is key for retailers. It offers them invaluable benefits like more effective order sourcing optimization, which contributes to the development of more cost-effective omnichannel offerings. Offerings that have the capabilities to support retailers by transforming stores and associates for the good of customers - further, it allows retailers to turn tricky returns processes into a powerful differentiator for brands. What is more, today, this technology can and will drive results from the cloud. 

Alex MacPherson, Director of Solution Consultancy and Account Management, Manhattan Associates