Retail today is constantly evolving, and the rise of omnichannel shopping has reshaped how retailers fulfill customer online orders. From balancing inventory across multiple channels to meeting the demands of same-day delivery, retailers must optimize every aspect of their fulfillment strategy to stay competitive. At the heart of this lies one of the most critical elements of successful operations: order routing.
In an omnichannel environment, customers expect speed, accuracy, and flexibility in how their orders are fulfilled. Retailers need to ensure that orders are routed from the best possible location, be it a warehouse, store, or another fulfillment center, all while minimizing costs and delivery times.
This blog explains the challenges retailers face with order routing and demonstrates how HotWax Commerce’s sophisticated routing capabilities address these issues, enabling retailers to manage complex fulfillment scenarios with ease.
The Challenges of Omnichannel Order Routing
For many retailers, the rapid shift toward omnichannel retail presents new challenges in managing order routing across multiple channels. Traditional order routing systems are often rigid and incapable of handling the dynamic nature of today’s retail environment. Let’s understand some of the major pain points that omnichannel retailers face:
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Managing Seasonal Surges and Promotional Peaks
During peak seasons like Black Friday, Cyber Monday or holiday shopping, order volumes can surge dramatically.
Traditional routing systems lack the capability to adapt to these surges, leading to operational bottlenecks and fulfillment delays. Retailers may experience significant fulfillment errors and missed deadlines due to inability to adjust routing frequency to match the spike in orders.
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Meeting Same-Day Delivery Expectations
The rise of same-day and next-day delivery expectations has added significant pressure on retailers to fulfill orders quickly.
Traditional routing systems often distribute these orders unevenly across stores and warehouses, leaving some locations overburdened while others remain underutilized. This imbalance not only delays delivery times but also creates discrepancies in stock levels, ultimately affecting the efficiency and profitability of the business.
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Balancing Inventory Allocation for Orders Across Multiple Channels
Managing inventory allocation for orders across diverse sales channels: eCommerce platforms, physical stores, and marketplaces like Amazon, requires strategic prioritization based on each channel’s unique needs.
Traditional routing systems often fall short in this area, leading to order fulfillment challenges. For example, if eCommerce orders are given priority over Amazon orders, the latter may experience delays. Amazon's stringent deadlines can lead to penalties, lost sales opportunities, and reputational damage for the retailer. Implementing channel-specific order routing is crucial to mitigate these risks and ensure timely fulfillment across all sales channels.
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Reducing Split Shipments and Logistics Costs
Minimizing split shipments is a constant challenge for omnichannel retailers. While reducing split shipments can lower shipping costs and enhance the customer experience, there are instances where split shipments are necessary, particularly for expedited orders.
Traditional routing systems present a binary choice: either split shipments are allowed, or they are not. This rigid approach can be problematic. For example, when handling same-day delivery orders, it may be necessary to split shipments if the inventory for all items is not available at a single location. If a system rigidly prevents split shipments, it can lead to delays or unfulfilled orders. Conversely, if the system allows splits indiscriminately, it can result in increased logistics costs and customer frustration due to fragmented deliveries.
So, What’s the Solution?
Configurable order routing. Unlike traditional order routing systems, which follow a static and uniform logic, configurable routing offers retailers the flexibility to define unique rules for how orders should be allocated and fulfilled.
At its core, configurable routing enables retailers to optimize fulfillment operations by considering factors such as customer location, inventory availability, order priority, shipping costs, and delivery timeframes. Retailers can adjust these criteria to adapt to changing market conditions, customer demands, and internal business goals. For example, during peak sales events like holidays or flash sales, retailers can prioritize same-day deliveries and allocate orders to nearest stores with excess inventory, ensuring customers receive their purchases quickly while minimizing the strain on certain locations with fewer stock.
How Configurable Order Routing Works in HotWax Commerce?
HotWax Commerce provides a dedicated Order Routing App, designed to adapt to the specific needs of retailers. HotWax’s routing engine is centered around three core components: Runs, Routings, and Rules. Each of these elements plays a critical role in optimizing how orders are managed, ensuring that fulfillment processes are both flexible and efficient.
Fig 1: Order Routing Workflow
1. Runs: Strategically scheduling multiple brokering cycles.
HotWax Commerce allows retailers to set up multiple brokering runs at different times throughout the day. These brokering runs ensure that orders are processed and routed to the right location at regular intervals.
Example: A retailer prepares for a peak season by scheduling frequent brokering runs every 15 minutes. This helps them avoid order backlogs and ensures that orders are processed continuously, preventing delays during high-demand periods.
2. Routings: Defining pathways for different order batches.
Retailers can define specific routing pathways based on the type of order, such as same-day deliveries batch, standard deliveries batch, or international shipping batch. By setting up different pathways, retailers can prioritize critical orders and ensure that they are routed to the best location for timely fulfillment.
Example: Choosing same-day delivery batch prior to standard delivery batch will ensure that routing is first performed for all same-day delivery orders so that inventory allocation is prioritized for them.
3. Rules: Inventory allocation based on recursive rules.
HotWax Commerce allows retailers to apply multiple recursive inventory allocation rules based on different batches of orders.
Example: For a batch of same-day delivery orders, a retailer may configure rules such as:
I. Check warehouse locations within 100-miles of proximity without splitting the order; if inventory is not found, move orders to the next rule.
II. Check stores that have not hit the order limit and warehouse locations within 100-miles of proximity; if inventory is still unavailable, move orders to the next rule.
III. Check all store and warehouse locations, allow order splitting if necessary; if inventory is still not available, move orders to unfillable parking and apply auto-cancellation date.
This approach enables retailers to allow order splitting or exceed a location’s maximum order limit in exceptional cases, improving overall order fulfillment efficiency.
Key Order Routing Parameters
Configurable order routing in HotWax Commerce isn't just about moving orders from point A to point B, it's about optimizing fulfillment decisions that align with the retailer's unique goals. Whether it's prioritizing orders during a holiday rush, balancing inventory across multiple channels, or reducing costly split shipments, these parameters give retailers the control they need to meet their customers' expectations without compromising efficiency.
Fig 2: Configurable Order Routing in HotWax Commerce
1. Order Filters: Defining the batch of orders to route
Order filters in HotWax Commerce determine which orders will be selected for routing. These filters give retailers the power to prioritize specific types of orders based on a variety of factors, ensuring that each routing run processes the most relevant orders for the given scenario.
I. Shipping Methods: When customers choose specific shipping methods, like expedited or same-day delivery, these orders must be prioritized differently. Retailers can use this filter to fetch a batch of orders based on the chosen shipping method, ensuring that orders requiring fast shipping are processed first.
II. Order Priority: Not all orders carry the same urgency. Retailers may want to pick orders with higher priorities (such as VIP or time-sensitive orders) before others. By filtering orders based on priority, they can ensure that the most critical ones are routed and processed before any less urgent orders.
III. Promise Date: When orders have a specified delivery date, fulfilling them on time becomes crucial. This filter allows retailers to batch orders based on their promise date, ensuring that orders with the closest due dates are routed and processed first, minimizing delays and ensuring timely delivery.
IV. Sales Channel: Different sales channels (eCommerce or marketplaces) may require different routing strategies. Orders can be filtered by channel to ensure the right group of orders is picked for routing based on channel-specific fulfillment rules, reducing the risk of penalties or delays in fulfilling orders from marketplace like Amazon.
V. Queues: HotWax Commerce uses virtual queues to park orders that are not brokered to a facility. Retailers can filter by queue type (e.g., brokering queue, rejected parking, or unfillable parking) to determine which orders should be brokered to available inventory.
VI. Origin Facility Groups: This parameter allows retailers to filter orders based on the facility group from which they originated. For example, many times when walk-in customers cannot find their preferred items in store, store associates place the order on their behalf, these are known as Send Sale orders. In this scenario the origin facility becomes the specific physical location. If a retailer wants all Send Sale orders from specific facilities to be routed differently, then they can apply this filter to fetch a batch of orders and proceed to create their routing.
2. Order Sorting: Ensuring the right orders move first
After filtering the orders, how should they be sorted for maximum efficiency? Order filters define which batch of orders will be picked for routing, while order sorting determines how these orders will be arranged within that batch.
I. Order Date: HotWax allows for FIFO (First-In, First-Out) sorting, ensuring older orders aren’t overlooked. This reduces delays and helps maintain customer trust by consistently processing orders in the order they were placed.
II. Order Priority: VIP customers and loyalty members deserve a premium experience. With this parameter, high-priority orders can be sorted to ensure they move through the fulfillment process first, ensuring these valued customers always receive their orders on time.
III. Shipping Method: Expedited shipping doesn’t just mean faster delivery, it means faster order processing too. This sorting option ensures that orders with faster shipping methods are prioritized in fulfillment queues, meeting critical deadlines for same-day or next-day deliveries.
Together, these filters and sorting options allow retailers to maintain the agility needed to respond to fluctuating demand, manage multiple sales channels, and uphold customer promises.
Key Inventory Allocation Parameters for Order Routing
Configuring inventory parameters is just as crucial as filtering and sorting orders. These parameters determine how stock is allocated and used for fulfillment, ensuring that the most appropriate inventory is utilized for each order.
1. Inventory Filters: Defining the pool of stock available for routing
Inventory filters allow retailers to specify which pools of stock should be used for order fulfillment, ensuring that the most suitable stock is allocated for each batch of orders.
I. Turn Off Facility Order Limit: During high-demand periods, retailers may need to exceed normal operational limits. This filter allows facilities to process more orders than usual by temporarily turning off the order limit, ensuring that surges in demand, such as holiday spikes are met without delays.
II. Brokering Safety Stock: For retailers who rely heavily on store inventory, which fluctuates due to continuous in-store sales, HotWax Commerce provides a brokering safety stock feature. This feature defines the minimum stock level required for an order to be brokered to a facility. For example, if the brokering safety stock is set to 15, only locations with more than 15 units of a product will be considered for allocation. This ensures that orders are routed to locations where there is enough buffer stock to handle the demand, reducing the risk of stockouts and improving overall order fulfillment reliability.
III. Facility Group: Grouping certain facilities allows retailers to simplify their decision-making. For example, slow-moving or lower-demand facilities can be grouped together and designated for non-urgent orders, while high-demand facilities are reserved for time-sensitive fulfillment.
IV. Proximity: This filter allows inventory to be allocated based on the geographical proximity of a facility to the customer. For example, a retailer can set a 200-mile proximity filter for next-day delivery orders, ensuring that only inventory within 200-miles of the delivery location is used to fulfill those orders. This helps in meeting delivery SLAs and reducing shipping times.
V. Split Order Item Group: Some products, such as bundles or gift sets, should always be shipped together. This filter ensures that specific groups of items are processed and shipped as a single unit, improving the customer experience by delivering a cohesive package rather than split shipments.
2. Inventory Sorting: Prioritizing which stock to use first
Once the pool of available inventory is selected through filters, inventory sorting determines how that stock is allocated to fulfill orders.
I. Proximity: Sorting inventory by proximity ensures that the nearest available stock is used to fulfill an order, reducing shipping time and costs, and ensuring the fastest possible delivery.
II. Inventory Balance: To prevent stockouts or overstocks at certain locations, retailers can prioritize facilities with higher stock levels. This helps ensure that inventory is distributed evenly across locations and that no facility runs out of critical stock prematurely.
III. Custom Sequence: Every retailer has different strategies for managing their inventory. Custom sequence sorting allows retailers to create their own hierarchy of fulfillment priorities, such as using slower-moving stores to fulfill eCommerce orders, which prevents inventory build-up and balances stock more effectively.
By leveraging inventory filters and sorting options, retailers can intelligently allocate inventory to prevent stockouts, avoid overselling, and balance inventory levels across locations.
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In an increasingly competitive retail environment, having a configurable order routing system is no longer optional, it’s essential. HotWax Commerce provides omnichannel retailers with the tools they need to optimize their order fulfillment strategies, adapt to real-time changes, and meet the ever-growing demands of modern customers.
From managing seasonal surges and offering same-day delivery to balancing inventory across multiple channels, HotWax Commerce’s configurable order routing engine enables retailers to streamline their fulfillment operations and reduce costs. By offering precise control over brokering runs, routing paths, and inventory allocation rules, HotWax Commerce ensures that retailers can confidently tackle the most pressing challenges of omnichannel retail.
Contact an expert today to see how HotWax Commerce can help you optimize your order routing strategies.
