After a year (and then some) of very little control, consumers crave flexibility and transparency from the companies they work with. As they experience the convenience of e-commerce, shoppers today can seamlessly switch between channels by browsing in person, then buying online, or switching devices while searching. In fact, social media bounce rates have increased 14% since Q2 2020, and abandoned cart percentages rose up to 65% in the last year on desktop computers and 81% on mobile, according to the quarterly benchmark report by Kibo.
Part of the increase in the bounce rate is due to the newfound ease in comparison shopping. It really has become a habit. If a customer can find the same product elsewhere besides the price comparison that is delivered at a cheaper time or is available earlier in the inventory of a nearby store, they are likely to forego brand loyalty for flexibility. To win back these customers and regain their loyalty, retailers need to ensure that every customer gets the product they want, when and where they want it, by seamlessly syncing the online space with the physical store. This is where distributed order management comes into play.
What is distributed order management?
Distributed Order Management (DOM) enables retailers to meet customer expectations by automatically maximizing order fulfillment at the lowest possible cost. DOM is working on rules-based practices to remove the kinks that tend to plague supply chains. The system automates key functions – such as order routing, shipping, inventory forecasting and re-ordering, inventory management and order processing – from all channels and fulfillment centers. A DOM system can streamline inventory replenishment by connecting to a central platform and adapting to pre-set supply and demand rules.
A DOM system can also process orders from across the company, regardless of the sales channel, and route them to the best fulfillment center and shipping courier. Orders can also be prioritized in the system. This option allows retailers to simultaneously fulfill pending orders, manage backorders, and prepare pre-orders for upcoming launches. This leads to faster order turnaround times with more accuracy at lower costs.
How do retailers benefit from DOM?
The central DOM platform provides a view of every item in the inventory and offers both trade guides and customers the transparency they want. In the past, retailers had to decide whether to exceed customer expectations or to keep operations cost-effective. For example, the promise of lower costs or faster delivery to compete with Amazon has driven internal business costs up. With a DOM, however, these goals can be preset and achieved automatically as the system finds the best way to meet the needs of both the buyer and the seller without risky compromises.
Which merchants should invest in DOM?
Any retailer can benefit from DOM software in today’s omnichannel retail industry, but some retailers will need this advancement sooner than others. Brands with a wide range of cross-functional activities, a long list of suppliers, or a large product portfolio should consider prioritizing DOM investments sooner rather than later.
For these large or high-growth companies, a DOM system for consolidating data from a variety of sources becomes essential. For example, if a retailer is working with multiple suppliers for different inputs, managing these relationships can become tedious. With a DOM, the system tracks how and when a retailer orders from its suppliers and can ensure that products are never overstaffed or understaffed. If a retailer has multiple warehouses across the country, DOM systems can coordinate inventory management in the warehouses and additional factors such as third party logistics warehouses (3PL) and drop shippers. The inventory data is not only compressed, but the DOM platform also offers real-time analysis without complicated spreadsheets, no matter how many storage units the brand offers.
However, smaller retailers can also benefit from a DOM. The system reduces the risk of a technology or information silo by coordinating all processes in a single data hub. This improved connectivity helps businesses of all sizes manage data more effectively and can lead to higher profits and increased growth potential.
What should retailers consider before choosing a DOM?
Before retailers can take advantage of a DOM, they need to define exactly what the system should do. Identifying the comprehensive and unique list of requirements for the business is the first and most important step in choosing a DOM. Common considerations are whether customers can choose a delivery date or a courier service. Can customers activate recurring orders? Could these needs change as the business grows?
Taking into account these individualized points, retailers can suggest a wish list with core functions. The landscape is designed so that some vendors are better prepared to help with one aspect, such as different order volumes, different portfolio sizes, and different schedules. It is important that retailers understand what they need and find a partner who is ready to meet all requirements on time and on budget. Reviewing vendor success stories or participating in test runs or demos can ensure that the right solution is found.
Upgrade to a DOM system today
Traditional order management systems lack the flexibility needed to keep up with today’s omnichannel shoppers. A distributed order management system will unify the business, increase visibility in the supply chain and ultimately create a better customer experience for buyers no matter how they choose a brand.
