How Retailers Are Lowering DTC Order Processing Costs

Brands and retailers selling direct-to-consumer operate at razor-thin margins. In addition, evolving consumer shopping expectations require continued investments in technology to remain competitive.
Investments that can deliver improved shopping experiences and drive cost reductions are highly valued in the industry.

Deck Commerce helps by providing market-leading expertise with an out-of-the-box order management system that’s purpose-built for direct-to-consumer retail.

By automating order processes, brands can save time and money while creating great consumer shopping experiences.

This guide outlines common retail order processing cost savings opportunities merchants realize when leveraging direct-to-consumer order management solutions.

Order Processing KPIs & How They Should Be Tracked in an OMS

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Order Processing KPIs	How an OMS Tracks Them
Order Cycle Time	An OMS provides real-time tracking of each order from when it is received until it is fulfilled, allowing for calculating average order cycle times.
Order Accuracy Rate	By automating order processes and integrating directly with sales channels, an OMS minimizes human errors, improving the accuracy rate of orders.
Average Order Value	By offering convenient fulfillment options, an order management system can help increase the size of an average order as many consumers purchase additional items when picking up in-store.
Order Fulfillment Rate	By setting capacity levels per node, warehouses aren’t overwhelmed, allowing them to meet their performance KPIs and get orders out the door faster.
Inventory Turnover Rate	By automating processes, returned inventory can get processed and back in stock to be sold faster.
Return Rate & Reasons	An OMS monitors all returned orders and can track return reasons to help brands identify potential issues and make strategic business decisions.
Pre-orders & Backorders	Gain momentum for a product launch with preorders. Accept backorders for out-of-stock products and notify customers when they’re back.
Percentage of Orders Delivered On-Time	Deliver orders faster by routing to the location closest to the customer – even if it’s a local store.
Cart Abandonment Rate	Lower the cart abandon rate by showcasing omnichannel fulfillment options (BOPIS, Curbside, etc.) and list the estimated home delivery date to set clear expectations.
Customer Satisfaction Rate	Though not directly tracked by an OMS, customer satisfaction can be inferred from metrics such as order accuracy, delivery times, and return rates. A well-functioning OMS can contribute to a higher overall customer satisfaction rate.

Cost-Savings Through Order Processing Automation for Retailers

By reallocating the resources saved through automation, retailers can invest more in product development, marketing, or customer service, further enhancing their growth and profitability.

Here’s how order processing for retailers improves bottom lines.

Reduced Labor Costs

Automating the order processing system will save retailers on labor costs.

The need for manual data entry and order tracking is eliminated, meaning fewer staff hours are needed for these tasks.

Furthermore, automated systems can operate 24/7 without breaks, providing constant service that doesn't demand overtime pay.

Minimize Errors

Automated systems reduce the likelihood of errors common in manual processes, such as misentered data or mishandled orders.

Fewer errors mean less time and resources spent on resolving them, whether that involves reshipping a misdelivered order, issuing a refund, or managing customer service inquiries related to the error.

Optimized Inventory Management

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Automated systems allow for better inventory management with real-time updates and precise tracking. Overstocking and stock-outs can be avoided, leading to cost savings on storage, waste, and lost sales.

Enhanced Customer Satisfaction

Improved order accuracy and faster processing times result in more satisfied customers, which leads to repeat business and reduces the costs associated with acquiring new customers.

Scalability

Automation provides scalability that manual processes can't match.

An OMS can handle an increased load during peak sales periods without additional staff or resources—this scalability efficiently handles high sales volume without incurring additional operational costs.

Mitigate Workforce Challenges

Amidst labor shortages, automation ensures order processing continues seamlessly. This allows businesses to avoid the costs of rushed hiring or training and maintains productivity levels despite workforce fluctuations.

Embrace Omnichannel Fulfillment

With automated systems integrating with various platforms, retailers can leverage omnichannel selling more efficiently.

This can lead to increased sales and reduced costs associated with managing separate inventory or processes for different sales channels.

Shipping Costs

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Order processing automation can also lead to considerable savings on shipping costs in several ways.

Accurate Order Fulfillment: Automated systems ensure precise order fulfillment, thereby reducing the chances of shipping errors. This minimizes the cost of returned shipments and resending the correct items.
Optimized Carrier Selection: Automated systems can be programmed to select the most cost-effective and efficient shipping option from a range of carriers based on weight, destination, and delivery time. This can result in significant savings, particularly for businesses that ship large volumes.
Bulk Shipping Discounts: Automation enables retailers to process and ship orders in larger volumes more efficiently. This could open up opportunities for bulk shipping discounts from carriers.
Inventory Management: With better inventory control thanks to automation, retailers can strategically manage and distribute their inventory to reduce shipping distances, times, and costs. For example, orders can be automatically routed to the warehouse closest to the delivery location, minimizing shipping costs and delivery times.
Reduced Expedited Shipping: Automation can reduce the need for costly expedited shipping services by improving order processing times. Orders are processed and ready for shipment more quickly, meaning they can often reach customers within the desired timeframe without expedited service.
Return Management: Returns can range from 5-30% of total orders placed, depending on the industry. Automating the returns process can make it more efficient and less costly. This includes generating return labels, managing return inventory, and processing refunds or exchanges.

Streamlined Financial Reconciliation

Order processing automation streamlines financial reconciliations and the "closing the books" process.

It does this by ensuring accurate and real-time recording of every transaction, which reduces human error and accelerates reconciliations.

The system also simplifies record keeping and invoice processing, directly contributing to faster financial closing.

Additionally, features like automated matching of transactions with invoices and the generation of clear audit trails facilitate the verification process during reconciliation.

Lastly, the reduced requirement for manual labor leads to cost savings. As a result, automation speeds up closing the books and enhances financial control and visibility.

Eliminate IT Support on Order Processing

Traditionally, maintaining and troubleshooting order processing systems requires a dedicated IT professional team. However, an OMS handles these tasks.

Any errors or issues that arise are typically addressed by the system's built-in error handling and recovery mechanisms.

Retailers can achieve substantial cost savings due to the decreased need for IT support.

Resources previously allocated to maintaining and troubleshooting the order processing system can be redirected to other strategic areas, such as system enhancements or digital innovation.

Supports Fulfillment Ops

Order process automation greatly enhances Fulfillment Operations, making life easier for warehouse personnel.

An order management system routes the orders to the best location—whether that’s closest to the customer, consolidating shipments to save on shipping costs, or even routing to the local store for fulfillment. It also allows brands to set capacity levels at fulfillment centers to prevent overwhelming the warehouse and slowing down deliveries.

By streamlining the returns process, brands can reduce manual tasks while increasing productivity. An OMS minimizes human error, ensuring refunds are quickly credited and returned product is back into inventory as quickly as possible.

Lower Your Order Processing Costs With Deck Commerce

In conclusion, Deck Commerce's Order Management System (OMS) solutions are more than a means to increase efficiency and accuracy; they are a strategic tool providing substantial cost savings for retailers.

Automating processes reduces the need for labor-intensive tasks, decreases reliance on manual IT support, and offers a more streamlined and efficient approach to managing inventory and shipping.

In an increasingly digital retail environment, Deck Commerce's OMS solutions are the key to operational excellence, cost savings, and a more seamless customer experience, providing retailers with a competitive edge.

As the retail landscape continues to evolve, investing in automated order processing is not just an operational decision but a strategic one that directly impacts a retailer's bottom line.