omnichannel order management

15 Critical Capabilities of an Omnichannel Order Management Solution

by Anil Patel |

In today's dynamic retail landscape, customers are constantly engaging with brands across various channels—be it through their smartphones, laptops, tablets, or in-person interactions. Despite the complexities associated with managing orders across these diverse platforms, retailers are under immense pressure to deliver swift service and seamless delivery experiences. To meet these evolving demands in 2024, businesses are turning to advanced order management solutions that streamline the entire fulfillment journey, from initiation to completion.

However, amidst the multitude of options available, selecting the right Omnichannel Order Management Solution (OMS) tailored to your company's specific requirements can be daunting. Too often, businesses invest in an OMS with high hopes of resolving all their operational challenges, only to discover it lacks essential features and functionalities. To avoid falling into this trap, it's crucial to understand what to prioritize when choosing an OMS.

In our previous blog, we delved into the significance of adopting a Distributed Order Management System and provided an overview of the key features of an Omnichannel Order Management Solution. In this installment, we will delve deeper into the 15 essential features of an OMS to guide you through your journey of selecting the right platform and vendor in 2024.

1. Real-time inventory visibility across the supply chain

We live in an age of instant gratification: our increasingly digital world has completely transformed customer expectations in the retail industry. When a buyer is searching for a product to purchase, they want it now. Real-time inventory visibility across all the store locations (stores & fulfillment centers) is a critical component of any Omnichannel Order Management Solution because it provides shoppers with up-to-date product inventory data. This improves the customer experience, drives sales, and promotes a positive brand image.

APIs (application programming interfaces) are critical features within an OMS that connect multiple customer touchpoints to enhance functionality and improve the buying process. Look for an OMS equipped with APIs: this capability allows your Point of Sale (POS) and Warehouse Management Systems to be connected, enabling real-time inventory visibility.

2. Online order routing based on proximity and inventory availability

An OMS must provide retailers with the flexibility to dynamically adjust order routing rules based on various factors beyond just proximity, inventory, and capacity. These factors may include special promotions, seasonal demands, or even specific customer preferences. By allowing retailers to configure these rules, the OMS empowers them to optimize their fulfillment network efficiently, ensuring timely delivery while maximizing customer satisfaction.

In addition, an OMS must empower retailers with granular control over their order fulfillment process. This includes the ability to enable or disable participation of specific fulfillment locations due to operational constraints. For instance, if fulfillment is temporarily disabled at a particular location due to maintenance or inventory shortages, the OMS ensures that orders are automatically rerouted to alternate centers without disruption.

3. In-store and warehouse fulfillment software tools for picking, packing, and shipment

Once an order is routed to the store, associates need in-store software to pick, pack, and ship it accurately and efficiently. Without this software, tracking the location of each item in the store can be a time-consuming process that leaves a lot of room for error.

In-store and warehouse fulfillment software tools offer huge benefits to your company when it comes to the accuracy, efficiency, and speed of your fulfillment process. These software solutions optimize the process from start to finish and increase your profitability. 

4. Rate shopping for a shipping label

Uncertainty over shipping rates poses a real issue for sellers: shoppers today are demanding quicker and cheaper deliveries, and retailers must provide customers with a multitude of delivery options.

Rate shopping gives you the power to compare different carriers’ shipping prices, so you can make the optimal choice for order fulfillment every single time. Before generating a shipping label, the Omnichannel Order Management Solution obtains the shipping rate of multiple potential shipping methods in a given service level (one-day delivery, two-day delivery, etc.) and selects the cheapest method that meets the service level agreement (SLA). In some scenarios, shipping by air is cheaper than the default ground shipping method: rate shopping saves money and time by identifying the optimal method.

Rate shopping eliminates the guesswork and guarantees cost-effective order fulfillment. In addition to minimizing the upfront cost, it can also reduce the delivery time.

5. Store inventory management

Accurate, real-time inventory visibility is a crucial feature of any Omnichannel Order Management Solution. Now, many retailers using POS systems have in-built store inventory management features, however, those retailers with no such features end up having poor inventory management and would eventually need an OMS to solve the issue.

Inventory management is often a big challenge for eCommerce retailers, as making mistakes, especially with inventory accuracy can drive away customers and cost your company money. Luckily, the right OMS can ease this burden by tracking the inventory across all locations.

To manage inventory, a platform must facilitate receiving stock in-store to increase inventory count and reduce the inventory count when fulfilling online orders. Furthermore, it should do periodic inventory counts to identify discrepancies promptly, ensuring accurate inventory levels and optimal stock control.

6. Coordination of “Buy Online Pick-Up in Store” orders

With the growing popularity of the Buy Online Pick-Up in Store (BOPIS) sales model, it’s important that an Omnichannel Order Management Solution is capable of coordinating the multiple touchpoints in the BOPIS framework. Implementation of a BOPIS sales strategy requires inventory APIs, giving real-time inventory availability of the stores. Once an order is placed, the OMS notifies (via mail, push notification, or SMS) store associates and provides them with in-store tools to pick and pack the order. After the order is prepared, the OMS also notifies customers that their orders are ready for pick-up. 

Customers expect a consistent shopping experience across all channels. An Omnichannel Order Management Solution that can coordinate the various components of a BOPIS order is essential to keep up with this growing model.

7. Process endless aisle orders

“Endless aisle” refers to a sales and marketing technique in which businesses enable in-store shoppers to virtually browse or order a wide range of products—products that are either out of stock or not normally sold in-store. These products will then either be shipped directly to the customers’ homes, or to the store for pick-up. An OMS must have the capability to seamlessly integrate with the Point of Sale (POS) systems, and with a view of inventory across the entire retail network, help in routing online orders coming in POS to the right fulfillment location.

8. Syncing returns to ERP

An OMS plays a crucial role in integrating with an ERP and other systems to record accurate status of returns, refunds and exchanges. Most retailers using an ERP system, leverage an OMS to manage online orders, while relying on a third-party Return Management System (RMS) to handle returns. An OMS acts as a bridge between the two systems by integrating with RMS and syncing return orders to ERP, for the purpose of journal ledger posting.

Additionally, an OMS should be able to manage returns for Point of Sale (POS) systems at stores and sync with ERP. In case the POS is not directly integrated with ERP, then OMS must help in downloading the in-store data for returns/exchange orders and post them in ERP.

9. Order Splitting

The practice of “order splitting” is common with e-retailers, because it accelerates the fulfillment process.  Sometimes, no single warehouse or retail location has all of the necessary items in stock for a given order. In this situation, Order Splitting allows the routing engine to fulfill partial orders from different locations and still meet the customer’s expected delivery date. Instead of having to wait for all the necessary inventory to be available at one location, the order is split. This feature is an important part of ensuring lightning-fast service and delivery to customers.  Fortunately, a strong OMS platform will take care of this complex process.

10. Backorders and pre-orders

More and more retailers in the eCommerce space are realizing the advantage of having backorders and pre-orders available on their platforms. A pre-order allows a customer to purchase an item that has not yet been released, while a backorder is for an item that is currently out of stock but will be available in the future.

These capabilities are a powerful way to avoid supply chain delays and challenges: allowing customers to pre-order and backorder maximizes your company’s operational efficiency and improves customer satisfaction. Additionally, your business can retrieve data from these orders to gain insights into your customers and drive revenue.

11. Customer Service

No matter what channel your shoppers are utilizing, delivering excellent customer service should be your company’s top priority. The right Omnichannel Order Management Solution will help you perfect the customer experience from start to finish, and support your customer service representatives.

With all the tools and features we’ve discussed at their disposal, customer service representatives can assist shoppers painlessly. A centralized Omnichannel Order Management Solution gives them a full view of the customer and their order history, so customer service team members can easily help them with any questions about their order or issues that arise. For example, customer service representatives will easily be able to edit order details, cancel orders, or view real-time information about inventory availability.

12. ERP integration

ERP systems automate core processes and offer real-time visibility into both operational and financial performance. With an integrated suite of applications for accounting, order processing, inventory management, production, supply chain, and warehouse operations, ERP systems provide businesses with clear data visibility and tighter control over their operations.

When retailers want to procure new inventory from vendors, they create purchase orders and in the event where they want to transfer inventory between their locations, they create transfer orders. An OMS should help in synchronizing both purchase orders and transfer orders created in the ERP systems. Additionally, when ERP systems like NetSuite are used for managing warehouse operations, an OMS should sync order data and inventory data with the ERP. This includes inventory receipts from new purchase orders received in warehouses or returns and inventory reductions in warehouses for any reason.

13. POS integration

A Point of Sale (POS) system is the heart of in-store retail operations, where transactions are processed, inventory is managed, and customer interactions are recorded. An OMS must be capable of integrating with POS systems to synchronize in-store sales data, ensuring accurate inventory calculations in omnichannel retail environments. When a sale is made through the POS system, an OMS must capture the transaction details and update the inventory records accordingly. 

This synchronization of sales data from the POS to OMS ensures that both online and offline sales channels are accurately reflected in the inventory records, providing a holistic view of product availability across all touchpoints. This helps retailers streamline their omnichannel operations, improve inventory accuracy, and ultimately, deliver a seamless shopping experience to their customers, whether they're shopping online or in-store.

14. WMS integration

A warehouse management system (WMS) is a type of software that tracks and manages day-to-day operations in a warehouse. These systems use automation to track inventory and shipments, ensuring orders are fulfilled at a quick pace and with high accuracy. An OMS should integrate with the external WMS systems to synchronize any increase in inventory, received in the warehouse from purchase orders or returns receipts and reduction in inventory for order fulfillment due to incidents of damages or loss.

An OMS helps in finding the best location to fulfill an online order from. In the event where an order is routed to a warehouse fulfillment location, an OMS should synchronize allocation details with the WMS. Once the order is fulfilled, an OMS should also synchronize the fulfillment updates from the WMS systems. Ultimately, an OMS that enables integration with your WMS will tremendously enhance your company’s order efficiency and boost customer satisfaction.

15. Reporting and analytics

Robust reporting and analytics capabilities are imperative. An OMS must provide retailers with comprehensive insights into sales, fulfillment, and pre-order performance through pre-configured reports and customizable options. This ensures that retailers can effortlessly track key metrics, analyze trends, and make data-driven decisions to enhance operational efficiency and customer satisfaction.

Additionally, by facilitating the identification of demand breakdown and return rates, an OMS empowers retailers to optimize inventory management and streamline fulfillment processes for seamless order processing.

*     *     *

Choosing the right Omnichannel Order Management Solution can often be a challenging task for the retailers.It's imperative to avoid committing to a platform that lacks essential features, as it could hinder your business operations. Fortunately, HotWax Commerce offers an Omnichannel Order Management Solution that encompasses all these critical features and beyond. Reach out to our team to schedule a consultation and discover how our solution can elevate your business.