As buying behaviors continue to shift, the lines between in-store and online shopping have become blurred. Consumers expect to have the same buying experience with your brand—whether they are scrolling on their phone or strolling through your store. Retailers need the capabilities to meet these expectations to continue to grow.
That's where retail order management systems (OMS) come in.
OMS systems tie your commerce tools and customer experience together. In this article, you'll learn what every retailer needs to know about order management systems and how to determine the right solution for your brand.
Order management is the facilitation of all retail order data and processes—from storefront to front door. It automates the receiving, routing, fulfilling, tracking, notifying, (and potentially returning/exchanging) of orders.
Simply put, order management overarches everything from when a customer browses your website (or store) — to the time they receive the order— and unifies touchpoints that compose seamless shopping experiences.
What makes a modern order management system (OMS) unique is its ability to zoom out to see the big picture of the retail business—beyond warehouses, inventory visibillity, and channels—and give brands the ability to map out their desired customer journey.
Powerful order management brings all retail channels together and empowers brands to connect with customers exactly where and when they want to buy—whether click, cart, or curbside.
Two of the most important aspects of any retail business are:
Because order management involves how customers purchase and receive your products— it is a key driver behind your brand experience. And given that almost half of consumers won’t buy from a brand again if they have a poor experience—order management is vital to customer acquisition and retention.
Order management is vital to customer acquisition and retention.
Order management system software also empowers omnichannel retail. Since omnichannel shoppers have a 30% higher lifetime value than those who shop using only one channel (Google), then your order management system acts as a growth engine for your retail brand.
In 2019, retail sales from physical stores accounted for 84% of total retail sales in the U.S. (Digital Commerce 360). Amidst a global pandemic and the closing of brick-and-mortar stores, the retail industry took a huge hit in 2020.
However, brands with a strong omnichannel backbone in place survived (or even thrived) over brands that were slow to transform digitally.
An order management system helps pain points:
Each of these interactions can be headaches for retailers and customers alike, but an order management system empowers brands to unify their systems, channels, and operations to create smoother customer experiences with less hiccups.
It is critical for retailers to create their customer experience with creativity and precision. A modern OMS gives you control of the complete order lifecycle so that you can curate the best possible customer experience. Your customer experience can be the differentiator between a one-time customer, and a lifetime customer.
Distributed order management (DOM) aggregates inventory across your distribution network, so you can fulfill orders in the most efficient, cost-effective way possible. A high-performance order management solution should include DOM capabilities— where you can configure and design order routing, logic, and complex workflows to help you ship from the closest inventory point— ensuring your customers receive their shipments faster and cheaper.
The order lifecycle spans from order receipt through final-mile fulfillment. While retail brands may have disparate systems through the buyer experience, (i.e. storefront, ERP, POS, WMS, TMS, etc.) an OMS overarches and unifies all of the systems and serves as the single source of truth for orders. OMS will give retailers access to all the order information and history your finance, fulfillment, IT, and customer service teams need at the various points of the order lifecycle.
A modern OMS provides available-to-sell inventory levels so you know exactly where you can fulfill orders (online, ship from store, etc.) and avoid stock-outs and unplanned backorders.
As consumer buying habits become more interwoven and complex, so does a retailer’s need to offer advanced order fulfillment processes. For example, a shopper may browse your website, visit your store, and download your app before they decide to buy. If they see something they want to buy but you don’t have the capability to fulfill it in the channel they happen to be in— they may go to your competitor instead.
If you have “gaps” in meeting your customer expectations, you should consider leveraging an order management system to close gaps other technologies may have. Some advanced customer interactions include the following capabilities:
If you have “gaps” in meeting your customer expectations, consider leveraging an order management system.
Without an order management system, many orders require manual processes and can be cumbersome. These tasks can lead to your associates spending more time focused on processes rather than people (i.e. your customers!). With OMS you can automate complex, or time-consuming tasks such as:
Case Study: See how a wellness retailer automated 94% of order management processes.
Automating once-manual tasks and processes makes life easier for everyone— but especially your customer service team.
OMS systems are not "one size fits all," so it is important to assess your retail business before deciding what option would be best.
| Option | Pros | Cons |
| Leverage Your ERP |
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| Leveraging your Storefront Software Suite |
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| Build an OMS In house |
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| Order Management System (OMS) |
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Not all order management solutions are created equal. So how do retailers find the solution that works best for their brand?
Consider the following capabilities “must haves” for your order management system:
First and foremost, outline all of your commerce requirements and what you need OMS to accomplish for your brand. Are you a traditional retailer moving to direct to consumer? How “omni-minded” is your supply chain?
Read More→ What to Consider When Choosing a Software Vendor for your Ecommerce Business
Think about the various factors that determine the complexity of your fulfillment chain. Perhaps consider the following key factors:
Possibly the most important aspect of determining the right solution, is finding the right partner to help you accomplish your business goals. These types of providers often look beyond contracts—and become an extension of your commerce team.
The cost of order management can vary greatly. First there is the initial "price," and then there is the long-term cost (and potentially opportunity cost) of the approach you select.
"Tack on" capabilities to larger systems (i.e. ERPs, storefronts software suites) are often cheaper to implement initially as you are likely offered bundled pricing from their flagship applications. If you are a small-volume retailer with a less complex distribution network, a tack-on approach might be sufficient for your requirements.
However, if you are a high-volume, D2C retailer or have fairly complex fulfillment operations— leveraging a high-performance OMS solution will most likely prove to be more cost-effective in the long run.
Why? Because many D2C brands find that implementing a tool that offers them what they need right now, is often not the full order management solution they need for their future tech stack. Morphing a tack-on tool into what your brand needs is costly, both in time and money.
Order management is more than a buzzword in commerce— it is the thread that unifies your commerce tools and hems your customer experience together. As consumer habits continue to shift, OMS now offers retailers the capabilities and visibility they need to craft the best possible customer experience.