The Emerging Importance of Order Management in eCommerce

In the last few years there has been a dramatic shift in the requirements retailers have when building eCommerce projects (both re-platforming or first time online projects). Order management and fulfillment, are rapidly becoming two of the most critical pieces in these projects, largely because of how shopping and retail landscapes are evolving.

At OrderDynamics™, we're experiencing this first hand with Clients and prospects on a daily basis. Prominent eCommerce analysts are also observing this shift. So when did this transition start? While there's no exact date, the short answer is it's been happening for some time now as eCommerce and online retailing continue to mature.

Retail is in the beginning stages of reinventing itself. Of course, this reinvention is directly in line with today's consumer who purchases goods out of convenience or targeted marketing efforts, rather than "channel loyalty". That's a concept OrderDynamics™ refers to as "Connected Commerce".

Forrester Research's Brian Walker recently outlined what retailers need to address as part of the evolving retail landscape (and subsequent "channel merge"):

• Manage orders across a diverse set of customer touchpoints
• Enable inventory visibility across all  retail channels
• Support a growing variety of payment types and tiered fraud screening
• Support customer service scenarios more effectively

While these capabilities are vital for the long term success of online retailing, there are several other factors to consider, too.

Consumers are paying for more order transparency
We've seen significant increases in conversion rates across numerous verticals (apparel in particular) when providing better frontend clarity into actual stock availability and fulfillment ETAs before ordering. Repeat shopping has also increased (in cases where multi-item orders need multi-location fulfillment) because of superior customer service through detailed, line-item level order status information at every step in the order lifecycle.

Stock availability display rules need to account for cross-channel inventory and fulfillment business rules to enable more specific and trustworthy messaging to the consumers. Having intelligent transactional email messaging and order tracking is critical. Consumers are likely to cancel their order due to confusion and/or lack of trust if they see blanket statements about their order status.

With enhanced Order Management System (OMS) support within an eCommerce platform (ECP), many of these OMS capabilities should be wired into the frontend of a website within My Account, Shopping Cart, Checkout, Product Catalog sections, etc.

Tighter merchant control with payment capture
In complex, multi-location fulfillment location scenarios (or in back order scenarios), there has been a growing desire to tightly control payment processing steps in relationship with fulfillment policies. The days of "full authorization" and "full capture" at time of shipping doesn't work well in these instances. Merchants want to deploy OMS workflows and invoicing policies that align with distributed inventory availability. Some supply chain systems can be the "brain" to determine what SKUs will be shipping from where based on inventory policies. In many cases the OMS needs to support the ability to invoice, capture funds, and ship individual shipments.

Roll up cross channel orders to the frontend
Providing a single view into the customer's order history, preferences, and loyalty has become a burning desire for many multi-channel merchants. They want to send orders from either their retail ERP, catalog system, or call centers to their ECP so the marketing and merchandising team(s) can leverage that data on their websites. This would allow the consumer to see their entire account history with the merchant. This is driving OMS support to easily receive orders from other sources into the ECP/OMS, while also forcing ECP/OMS systems to natively support linking external systems into order work flows. Stored value databases like in-house gift cards or loyalty programs need to be intelligently and reliably plugged in to the ECP/OMS so that these kinds of features can be leveraged.

To learn more about order management and its growing importance in online retail, download the new whitepaper, "5 Organizational Steps to Plan for Connected Commerce".