Retail order management system is key in fueling omni-channel sales, provider says


OrderDynamics, a leading provider of global order management and omni-channel solutions, has released the results of a new global retail study that identifies the role order management technology plays in accelerating cross-channel growth by supporting consumer oriented features such as buy online, pickup in-store, and fulfilling web orders from retail stores. 

In a commissioned study conducted by Forrester Consulting on behalf of OrderDynamics, an eCommera company, Forrester Consulting surveyed 337 decision makers across North America, Europe and Asia with knowledge of their firms’ multi-channel fulfillment strategy. The research revealed cross-channel fulfillment programmes are the top omni-channel priorities among retailers.

Despite the focus on fulfillment tactics, the newly released study – The Retail Order Management Imperative – found while only 49% of retailers currently use an order management system, many of these solutions are ill equipped to support complex cross-channel fulfillment offerings. Moreover, the study found traditional order management systems typically cannot support the multiple facets of evolving omni-channel commerce initiatives. The study identifies several key findings including:

Cross-channel fulfillment programmes trump other omni-channel initiatives

The study discovered that optimisation of cross-channel fulfillment processes such as pickup in-store, ship-to-store and ship-from-store are being prioritized over other omni-channel tactics like single view of the customer and cross-channel loyalty programs. In-store pickup options provide retailers with greater in-store traffic and new opportunities for more cross-selling.

  • 26% of retailers in the United States and 47% of retailers in Europe already have ship-from-store capabilities, while 10% and 18% respectively soon plan to enable this offering
  • 23% of retailers already have a buy-online, pickup-in-store program in place. Likewise, 20% have a reserve-only pickup-in-store programme. According to the study results, these store pickup numbers are set to almost triple in the next 12 months
  • 63% of retailers surveyed indicated that gaining a competitive advantage over online pure-play retailers by leveraging their stores assets (inventory, shipping cost efficiencies and reduced delivery times) was a primary driver for investing in omni-channel initiatives
  • Retailers already (or expect to) fulfill an average of 35% of online orders from their retail stores

Order management technology underpins omni-channel initiatives

The study also identifies the growing need for modern retail order management systems that can support complex fulfillment programs in addition to standard order automation features. The study states, “Some retailers have invested in traditional order management systems that are largely centered on order automation, many do not possess the technology to enable next generation fulfillment… As a result, an increasing number [of retailers] are investing in retail order management systems to provide not only a consolidated cross-channel view of inventory and order data, but also to support the orchestration of complex cross-channel sales and fulfillment scenarios.”

  • 85% of retailers stated a retail order management system would play an important role in the execution of their omni-channel strategy
  • 75% of the retailers surveyed believe an order management system will reduce inventory costs and improve fulfillment efficiencies
  • 63% of retailers are considering SaaS-based order management systems to support their rapidly evolving omni-channel initiatives 

Omni-channel initiatives have the attention of the c-suite

The study reveals the importance C-level executives are placing on omni-channel commerce strategies. The study states, “… at many of the retailers we surveyed the CEO, CIO, COO and CMO are all taking an active role in defining their firm’s omni-channel strategy and prioritizing explicit programs that will serve to connect the cross channel purchase journey their customers now expect.” The successful implementation and execution of omni-channel commerce requires the input and ongoing collaboration between many departments and shouldn’t fall onto the sole responsibility of one individual. 

  • 39% of retailers have created a dedicated executive or c-level role to lead and coordinate omni-channel initiatives
  • 34% of retailers have their CEO leading omni-channel initiatives
  • 9% retailers have already re-aligned their online and offline departments to become an omni-Cchannel organisation with a single P&L

As part of the research in this study, Forrester Consulting completed in-depth surveys and interviews with retail executives to understand the full spectrum of challenges and considerations being put into order management and omni-channel initiatives.

“The vast majority of our 2,000 stores are enabled for distribution. At the end of the day that is the big advantage we have – we can have the product same-day/within minutes – pure plays cannot match that. With ship-from-store and store distribution centers we can get the product to customers much faster,” said a director and general manager at a major US retail chain.

“Omni-channel fulfillment represents a strategic advantage for many retailers by leveraging inventory across multiple locations, and streamlining fulfillment processes. These initiatives ultimately lead to reduced operational costs, and more importantly, an enhanced customer shopping experience. It’s clear retailers recognize a retail order management system as a strategic solution for enabling next generation fulfillment tactics and gaining an advantage over direct competitors and nimble web-only retailers,” said Michael Turcsanyi, president at OrderDynamics.