Author: Extensiv Aug 22, 2023 8 Min READ

Omnichannel Order Management Explained

8 Min READ
Omnichannel Order Management Explained

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What is Omnichannel Order Management and How to Take Advantage of It

Being a successful retail or ecommerce business has never been easy, but it’s certainly more challenging as the consumer landscape changes and customers demand more options to connect with brands.

Long gone are the days of opening a brick-and-mortar store or setting up an online storefront, hoping your customers will find their way to you. With the growth and value of omnichannel sales, the key to success often lies in your ability to meet customers wherever they are, everything from your physical store to direct consumers, from one business to another, and across an increasingly growing list of digital commerce options.

But how do you keep pace? As your operations scale, how can you get real-time inventory visibility and orders with a customer-centric focus, all while ensuring your business decreases risks of costly inventory and order mistakes?

The answer is omnichannel order management, and just how well you handle it may be the life force—or death knell—for your business.

What is omnichannel order management?

Omnichannel order management is end-to-end fulfillment across all of your sales channels such as your on-site locations, online storefronts, social media engagements, online marketplaces, advertising, social commerce, email campaigns, business-to-business (B2B), and more.

Wherever there’s an opportunity to sell your products, an omnichannel order management system (OMS) can streamline processes and increase visibility, accuracy, and efficiency. Omnichannel order management includes all of the processes across your sales channels and fulfillment centers, everything from keeping track of and ordering inventory to processing orders, picking and packing, shipping, tracking delivery dates and status, and returns.

With order management, you can build confidence your business can successfully meet all of your omnichannel retail and customer orders—as soon as they place an order without worrying about product availability, low inventory, shipping the wrong item, or the headache of dealing with backorders.

Why is omnichannel order management critical for ecommerce?

Omnichannel order management is critical for ecommerce businesses. Why? Because without it, your business may struggle to overcome challenges that compound as your operations scale and as the number of sales channels and product sales increase. By adopting an omnichannel strategy, businesses of all sizes can manage order fulfillment processes more efficiently and with less cost—without having to hire more people or overextend your already tight budget.

Omnichannel Order Management for Sellers

For sellers, omnichannel order management is critical to your business because it plays an important role in your customer experiences. If you’re slow to deliver products, send out the wrong product, or have frustrated customers waiting on backorders or poor shipping processes, they’re not going to be happy. Unhappy customers won’t likely buy again from your business, and they’re likely to tell others about their experience. Poor customer service costs businesses more than $75 billion each year, and prioritizing growth over customer satisfaction plays a role in that. An order management strategy plays an important role in your overall profitability. It can help improve business efficiencies, avoid backorders and overstocks, and ensure you can meet customer demand.

Sellers can also more efficiently grow their business by streamlining and expediting order processes and multichannel distribution. Retailers and ecommerce businesses can use omnichannel order management to:

  • Ensure you have the inventory you need to meet order needs
  • Automate inventory orders and reorders
  • Automate fulfillment processes
  • Meet customers where they are: online or in person or a combination of both (BOPIS)
  • Focus on improving customer experience
  • Decrease order processing and shipping times
  • Reduce costs and free up employee time by eliminating repetitive manual processes
  • Make the return process easier, regardless of where the product was purchased
  • Get insight into order status at every step of your processes
  • Keep customers updated about order status
  • Collect data about your fulfillment processes and other business needs for analysis to learn your customer purchasing habits, make better order management decisions, and improve and streamline order processes
  • Forecast future inventory needs across all of your sales channels, regardless of how different they are
  • Build your brand: happier customers = repeat business

Common Omnichannel Order Management Challenges

While there are many benefits of using an omnichannel order management tool, your executives might be a bit hesitant to invest in one out of fear it will cost too much, be too labor intensive to implement, and too hard to use so you’ll never get employee buy-in.

Those concerns aren’t without cause. In fact, historically, order management systems have been cumbersome, expensive, take too long to implement, and complicated to use. However, with the correct OMS, for example, Extensiv Order Manager, you can streamline your order and fulfillment processes to overcome common challenges such as:

Lack of inventory visibility

Many businesses struggle with keeping track of accurate inventory levels. For some, the problem is inventory management and reorders are done via manual processes and employees must make a point to routinely check, update, and restock as needed. The more sales channels and products you have, the harder and slower this process becomes. Worst yet, when inventory isn’t up-to-date, you risk not being able to meet your order demands, leading to frustrated staff and unhappy customers.

An OMS like Extensiv Order Manager gives you comprehensive visibility into your inventory levels in real time, so you always know when it’s time to restock. And, with its automation tools, you can even automatically reorder inventory whenever stock reaches a specified level. With real-time data and analytics, you can also use Extensiv to forecast inventory and orders, so you can plan ahead for busier times and never be left understocked or have too much inventory sitting on your warehouse shelves.

Inaccurate and slow order routing and fulfillment

Omnichannel sales are great for boosting business, but the more opportunities your customers have to buy online, the more complicated your order routing and fulfillment processes can be. Accurate and efficient order routing is vital to your business. If you’re managing inventory with paper manifests or spreadsheets, it can be challenging, if not impossible, to know which orders need to go where and how to get them the fastest and most cost-effective way.

An order management platform can help improve your omnichannel fulfillment needs with fast order processing. With Extensiv, for example, you can automate processes such as routing the right orders to the right warehouses and instantly triggering specific actions with orderbots. With real-time insight into all of your orders, as they come in, you can manage them quickly and accurately, ensuring your customers have positive experiences.

Data integration

Traditional order systems don’t provide integrations that work hand-in-hand with your favorite business tools, like your point-of-sale (POS) system. To close the gaps, many companies end up bolting on other solutions that weren’t meant to work together. Disparate systems silo data and hold critical information hostage. This often is the result of not using the right tools for the correct business functions, resulting in an inability to see how everything within your order management and fulfillment processes work together, from back-office to the warehouse and out to the customer.

Yet, order management systems don’t have to be that complicated. Extensiv’s order management tool seamlessly integrates with major sales channels such as Amazon, Walmart,  and Shopify, funneling all your important data into one platform.

Customer expectations

Since the pandemic, customer demands and expectations have shifted and will likely continue for the foreseeable future. Customers want omnichannel purchasing opportunities. If your business can’t fulfill orders across all of the sales channels where your customers want to engage with you, you may very well lose them to competitors that can. An order management solution can help automate all of your inventory, warehouse, order, and fulfillment processes so you can meet customer expectations. And, as your business scales, with Extensiv, you can expand into new sales channels using APIs purposefully built to handle high-order volumes with speed and accuracy. The more you grow and the more your omnichannel sales network expands, the more confidence you can have that your inventory is accurately allocated, reducing stockouts and overselling, and keeping your customers happy.

Returns and exchanges

Even if you send out the correct products at the right time, returns and exchanges still happen. In 2022, according to Statista, the cost of all retail returns in the U.S. hit $817 billion, and of those, a quarter were from online retail. That same year, of the $1.3 trillion spent in online sales, 16.5% resulted in returns. If you’re operating with an omnichannel sales strategy, and you’re managing returns with manual processes, you’ll likely find it’s hard to keep track of them all, which further frustrates the customers you’re trying to keep happy and will end up costing you money in the long run. To circumvent some of these challenges, be sure you have a clearly defined and prominently displayed return policy. Make sure that policy protects your business, but also ensures your customers have options and reasonable opportunities to return unwanted, damaged, or incorrect products to you. With the Extensiv platform, you can simplify returns and track items, including confirming returns when they move through your system.

Omnichannel Order Management Best Practices

Order management is challenging, especially if you’re scaling operations. This is even more complex if you’re juggling omnichannel orders. To improve efficiencies and reduce costs, consider adopting best practices to help your business reap the full benefits of omnichannel order management. With the right strategy, you can improve the accuracy and efficiencies of your order processing and fulfillment operations, while keeping your customers happy with improved customer service automation. Here are some recommendations:

Centralize your data

Omnichannel orders come in from multiple sources, which can make them difficult to track and manage. However, by centralizing your order management processes, you can get more comprehensive visibility into all of your inventory; incoming and outgoing orders; and customer, tracking, and shipping information. With all of this information streamlined into a single platform like Extensiv, you can efficiently track orders in real-time, regardless of the channel from which the order originates.

Use a robust order management system

Organizations that use disparate software and other tools to track orders often struggle with accuracy and fulfilling and shipping orders quickly. That’s compounded if you’re stuck using paper manifests and spreadsheets or solutions that don’t integrate with your enterprise resource planning (ERP), customer relationship management (CRM), and other operational tools. Instead, consider investing in a robust order management system that can handle all of your omnichannel order management complexities. Extensiv’s Order Manager, for example, enables full visibility into all of your moving parts so you can see and control all parts of your processes from sales to order and from fulfillment to delivery.

Optimize your fulfillment process

Receiving, fulfilling, and tracking orders across multiple channels simultaneously can be a nightmare, especially if you’re still using a lot of manual, repetitive tasks in your processes. This can lead to inefficiencies such as errors, wasted time, and duplicated work. Instead, optimize your fulfillment processes with a distributed order management tool like Extensiv, which will help you automate and streamline processes all within a central hub.

Implement real-time inventory management

Few things can make you lose business faster than not having products in stock or delaying orders because you weren’t tracking your inventory and you don’t have what you need when your customers want it. To overcome this common challenge, adopt a tool that empowers real-time inventory management so you can track inventory levels across multiple channels. Extensiv’s Order Manager gives you accurate visibility into your supply levels in real-time and can synchronize inventory availability with your sales channels and pending orders. You can even set minimum and maximum inventory levels to reduce over-orders or stockouts.

Provide a seamless customer experience

Customer expectations are rapidly changing, but there is a common theme rising to the surface—your customers expect a consistent experience with your business, regardless of channel. To improve customer service and retain satisfied customers, create a seamless experience across all of your channels. Integrate your website, ecommerce platform, mobile applications, in-store point-of-sale, and all of your other channels within a single tool to ensure your customers can move from one channel to another with no hassle or headaches.

Monitor and analyze your data

For many years ecommerce, retail, and 3PL businesses have piecemealed technologies together to try to improve operational efficiency. Unfortunately, this often creates data silos and limits visibility into your complete order and fulfillment processes. As a best practice, consider adopting a solution that can help you collect, routinely monitor, and analyze all of your order management data so you can continuously improve operations and make better business decisions, including the ability to forecast models so you’re never caught off guard as your market and customer needs evolve. Reporting and analytics are part of the Extensiv platform. Order Manager can help you gather and summarize your important order and fulfillment performance metrics and even offers recommended actions to help you more effectively manage your business.

The Future of Omnichannel Order Management

As more technologies and applications make daily life more efficient for everyone, in the coming years, you’ll likely adopt more order channels to meet your customers where they are. Adopting an omnichannel order management strategy, supported by an order management tool, can ensure you’re always on the right track for accurate order processing and flawless fulfillment services.

To learn more about Extensiv’s solutions for brands, request a demo today!

Omnichannel Order Management FAQs

How can businesses measure the success of an omnichannel order management strategy?

Establishing, tracking, and evaluating key performance indicators (KPIs) for your order and fulfillment processes can help your teams effectively measure the success of your current order management strategy, help identify gaps and performance issues, and set goals to continuously improve your order management strategy.

How important is customer service in omnichannel order management?

Customer service is critically important in omnichannel order management. Customers across all industries expect a seamless experience with your business, regardless of where a point-of-sale originates. How effectively, accurately, and quickly you manage order and fulfillment processes will directly impact your customer satisfaction and as a result, your ability to retain those customers and recruit new ones to become champions of your brand.

What is an omnichannel order management system?

Omnichannel order management is end-to-end fulfillment across all of your sales channels such as your on-site locations, online storefronts, social media engagements, online marketplaces, advertising, social commerce, email campaigns, business-to-business (B2B), and more.

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