How do you stand out in an industry where customers have endless options? With over 1.07 million retail establishments and 13.98 million ecommerce sites in the United States alone, no matter how niche your product is, you will still have at least a few hundred competitors. Let’s not forget about bigger competitors such as Amazon, holding a giant 37.6% of the US ecommerce market share.
Distributed order management (DOM) has emerged as a pivotal technology for ecommerce businesses aiming to streamline order fulfillment and optimize customer satisfaction. Unlike traditional order management systems (OMS) that operate on a linear process with limited channel connectivity, DOM offers a multi-dimensional approach to order fulfillment, integrating data from multiple channels in real time.
Distributed order management provides retailers with the adaptability and data visibility needed for today’s omnichannel landscape, where customers increasingly expect seamless buying options and swift delivery. By optimizing inventory, improving order fulfillment speed, and boosting profit margins, DOM enables retailers to meet and exceed customer expectations.
Investing in DOM is no longer optional; it's essential for survival in the age of omnichannel commerce. Keep reading to learn how distributed order management is transforming ecommerce in 2024 and beyond.
As omnichannel order management and ecommerce becomes increasingly complex, it is clear that this model is here to stay. Distributed order management provides a unified framework for businesses navigating this new commerce landscape.
With the rapid evolution of ecommerce technology and trends—including social media, apps, and third-party retail platforms—brands must adapt swiftly to keep pace. This complexity in managing inventory necessitates robust backend technology, offering a reliable foundation for brands to fulfill customer expectations flexibly, cost-effectively, and efficiently.
Ultimately, DOM's unique capabilities translate into tangible business benefits. By streamlining order management, inventory management, fulfillment operations, and customer experience, DOM drives increased revenue, reduces costs, improves customer satisfaction, and strengthens a retailer's competitive edge.
Your customers expect fast, accurate, and transparent order fulfillment. Failing to meet these expectations can lead to lost business and negative reviews. Customers are now demanding faster order fulfillment, and 24-hour delivery is quickly becoming the norm. In a survey when shoppers were asked about their delivery expectations for online purchases across various categories, nearly two-thirds of global shoppers anticipated receiving their items within 24 hours, with four in ten expecting delivery in under two hours.
Accurate data is the foundation of any order management system as this ensures fulfillment decisions and strategies are based on truth, minimizing the risk of negative consequences. Neglecting data accuracy and integrity in supply chain management can lead to costly mistakes, delays, and disruptions. Inaccurate data can lead to wasted resources, reduced productivity, and an inability to respond quickly to market changes. For example, inaccurate inventory data can lead to overstocking or stockouts.
Siloed systems for inventory management, order processing, and customer relationship management (CRM) can create communication gaps and errors. Investing in integrated systems ensures seamless data flow and reduces the risk of overselling or mismanagement. Given the increasingly strategic role that order management plays within your business, silos put you at great risk. For example, it’s harder if data on your sales channels are not integrated; you risk overselling and disappointing customers.
Failing to provide diverse shipping options can drive customers to competitors. Offering various shipping methods—such as expedited, flat-rate, or free shipping—can improve customer satisfaction and retention. Every customer is different, and one shipping option cannot satisfy everyone. Consider getting different shipping services according to the type of products you sell and using the best one that suits your customers' needs.
This capability optimizes resources across multiple locations and provides flexibility to adapt to supply chain disruptions or demand fluctuations. Leveraging these orchestration tools helps businesses maintain a seamless, agile fulfillment process that aligns with customer expectations for speed and reliability.
However, without a robust returns management process, unauthorized refunds or replacements can disrupt inventory levels and finances. A strong DOM system can streamline reverse logistics by directing returns to the most efficient location based on proximity, inventory requirements, and capacity, thereby reducing both costs and processing time. Once a return is processed, DOM systems update inventory in real-time across all locations, minimizing stock inaccuracies and supporting faster restocking and resale. Additionally, DOM gathers data on return trends, enabling businesses to identify potential product or process issues and improve overall operations.
Technology alone isn’t the answer. A strong DOM solution can simplify operations, but only when aligned with robust processes and trained teams. Relying exclusively on technology without refining operational workflows or training staff can lead to errors, slow fulfillment, and even customer and employee dissatisfaction. Emphasize process improvement and empower your team with training and support to make the most of your DOM system.
DOM introduces new complexities in cost management, particularly when orders are shipped from multiple locations. If you don’t evaluate fulfillment costs per location and understand the cost implications of multi-location shipping, you may end up paying excessive fees. Frequent reassessment of shipping costs, warehouse fees, and labor expenses is essential to identify the most cost-effective fulfillment routes.
Customers now expect to know the status of their orders from the moment they place them until delivery. Without a clear communication strategy, customers may be left in the dark, especially if orders are fulfilled from multiple locations or split into multiple shipments. DOM platforms can automate customer notifications, and it’s worth investing in this capability to maintain trust and minimize service inquiries.
To choose the best distributed order management system, you will need to have a clearer picture of what you hope to achieve. However, there are some key questions and elements to address when it comes to choosing the system that is best for you, your company, and your future growth. It means taking some well-defined steps:
This should be discussed throughout the business. Take time to research what your new system should do for you. Include every department in your decision, and remember to discuss your expectations and plans with your suppliers. You need to have an aligned focus to choose the distributed order management system that best suits your needs.
By questioning as much as possible, you will develop a much clearer picture of your requirements over the features and functions that are nothing more than nice to have.Consider the following questions:
You will need a vendor for your distributed order management system. By drafting a proposal, you can organize the selection process. That’s because it will contain the core features that you are hoping for and the technical requirements that you need. The key elements to include in your proposal are:
This will provide both you and your DOM vendor with the technical specifications to help quickly determine if they can match your needs.
You will be more satisfied with your final system choice if you have a stronger awareness of what the key features and limitations are of the available systems. Find various DOM vendors and discuss their systems with them.
At this stage, it is often a good idea to make use of trials and demos of the systems that you have narrowed down. This gives you a much more effective means of evaluating the ease of use and the practicalities of training on a new system. It is also a smart move to check customer reviews on sites like GetApp, G2, and Capterra, as this will give you a much more unbiased perception of the tools.
It’s also worth remembering that ecommerce platforms like Shopify and BigCommerce also host reviews for integrated products. These review sections can be a valuable source of unbiased and practical reviews.
It is challenging to find a system that will always fulfill 100% of your requirements. In those cases, it will be essential to make the trade-offs that ensure that the features you lack will not hinder you. Consider as many additional elements as possible so you have a clear picture of your exact needs and what you can live without.
Make sure that you get the features and functions that are most vital to keep your business running smoothly. However, don’t merely evaluate the software itself. Make sure your system vendor is a good match for your brand. Once you’ve narrowed down your final selection of potential software, it’s time to ask the harder questions:
Extensiv is a great choice for any business to adopt a distributed order management system. We provide a robust, 360-degree view of all orders at every stage of the order lifecycle. Exteniv’s order management software is designed to centralize and optimize every step of the order fulfillment process.
Extensiv’s solutions for brands bring together all the tools and insights needed to excel in distributed order management. Interested in learning more? Request a demo today!