Comma Consulting founder Greg Randall asks what does the Order Management function need to look like in the future?
The Pandemic has made a significant impact (and continues to have an impact) on the Order Management business function for retail business models.
It's OK to say the Order Management function needs to improve, but;
- How is it to evolve?
- What defines its evolution?
- What guides can be applied to effectively define its future?
Defining "Order Management":
Order Management is the process that sits at the heart of all goods-based B2C retail organizations, controlling all business activities from that point where an online order is confirmed and the comprehensive and complex journey a product (or products) must take to reach its destination: the customer's hands.
In its simplest form, this includes:
- Order Management logic which takes into consideration the customer's location, inventory availability, business rules, and existing business infrastructure
- Picking and sorting of orders
- Packing and dispatch of orders
- Shipping of order and tracking the delivery to its delivery point
- Returns management
What dictates the future of Order Management?
The answer is simple: retail experiences.
Permanent new change in retail is here and retailers have worked past their "wait and see" strategy of 2020 and are seeking change. This change is designed to meet the new and rapidly evolving needs of the new "COVID Consumer".
Retailers need to be careful not to become caught in the "chicken-egg syndrome". The act of rapidly applying change in Order Management without first considering the retail experiences to be supporting.
The pandemic highlighted frail Order Management systems which buckled under the pressure of rapid growth in online orders. The knee-jerk response has been to blindly invest in Order Management systems.
While online-only retailers can focus Order Management on speed, efficiency, and scale, bricks-and-mortar retailers have significantly more to think about.
Evolving Order Management cannot begin until bricks and mortar retailers define what their new retail experiences need to look like. While Order Management may be looked upon as a traditional business function, there is nothing traditional about the evolution of retail and the experiences retailers are looking to create.
Some of the questions retailers need to be answering before tackling their Order Management function...
- What do the NEW retail experiences look and behave like? How will retail touchpoints engage with customers?
- What do these new touchpoints mean in the context of delivering customer access to products he/she wants?
- How can the Order Management function compliment and deliver scale for these touchpoints?
To help illustrate this point is to consider some examples of where retail is going are;
- Escapist retail- The move to creating "immersive spaces" and "experiential stores" has been a conversation in the past with many retailers, but its now coming to life.
- "Physical and Digital" retail- The better utilization of technology to activate and enhance in-store experiences.
- "Live streamed Retail/Commerce"- The old traditional Online Shopping channels are having a resurgence in popularity, but largely driven by social channels, not the TV.
How to define and activate the evolution of Order Management:
Gartner recently released a starting point in what is required to define the future of Order Management.
"Determine your need for Order Management by assessing the complexity of your current and planned customer order fulfilment services against the capabilities of existing systems. Create a set of the most critical order fulfilment scenarios you wish the new Order Management software system to enable by writing these scenarios from the customer's perspective. This becomes the starting point for assessing vendor functionalities."
Conclusion - Size of the opportunity:
Research was conducted in mid-June of 2020 finding 75% of the US public tried new brands while eliminating the option of heading into physical stores.
It is this combination of evolved retail experiences and the Order Management function that will enable retailers to acquire and hold on to customers.
When considering where retail is going, Order Management has equal importance and is now part of the "retail experience".
eStar was recently recognised as a Market leader for Distributed Order Management by Gartner. More information can be found here: 2021 Gartner Market Guide for Distributed Order Management.
