Online Retail Today

Distributed Order Management: Holidays in August Edition

Holiday Gift Guide
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As summer swelters, merchants are busy planning for the winter season’s peak sales bonanza. New eCommerce site features and store designs may dazzle shoppers as they make their holiday debuts, but just as important – if not more so – is the engine with the potential to integrate these touchpoints into a seamless whole: the distributed order management system.

Retailers increasingly recognize the importance of fulfillment alternatives such as Buy Online, Pickup In-Store (BOPIS) and “endless aisle” capabilities that link store shoppers to online inventory. That’s because such services are increasingly popular, especially over the holidays.  In 2017, for example, 58% of holiday shoppers reported they planned to use BOPIS – a 25% increase from the prior year, according to Kibo’s Holiday Consumer Trends report.

Furthermore, merchants of all stripes – from online-only retailers to brand manufacturers selling direct to consumer  – increasingly face pressure to boost order fulfillment speed. Thanks to the wide popularity of Amazon’s Prime service, which includes free 2-day shipping and reportedly counts more than 95 million members in the U.S., expectations for swift and free holiday delivery are on the rise. Last year, a holiday survey from research firm, Deloitte, found that 64% of shoppers would pay nothing extra to receive holiday orders in 2 days, and 65% believed they could order holiday gifts after December 17 and still receive free on-time delivery for Christmas.

Robust order management software is key to providing both in-store fulfillment services and the swiftest possible delivery options – but merchants have so far been slow to prioritize overhauling legacy systems. Technology researcher, Forrester, found that just 5% of retailers ranked order management as a top operations initiative for 2018, which means that many sellers may find themselves ill-equipped to realize their holiday fulfillment goals.

Even those who’ve taken steps to modernize their omnichannel fulfillment systems are fast approaching “code freeze”, when new features and integrations are put on hold to ensure the stability of the eCommerce site, mobile apps, and back-end systems through the holiday season. But given the high consumer expectations for seamless fulfillment, merchants can – and should – continue to work on optimizing order management operations through the end of summer and into fall.

Fortunately, there are many order management improvements that retailers and online merchants can make which don’t require a total code overhaul or new integrations.

Repeatedly test BOPIS features end-to-end.

Retailers with physical stores, as well as manufacturers who’ve integrated their website offerings to feature retail partners, have much to gain from a seamless BOPIS operation. Not only can fast, free order pickup satisfy holiday shoppers’ need for fulfillment speed; as the clock counts down to the holidays, BOPIS can bridge the gap between online and offline for last-minute shoppers who order too late for home delivery. In fact, some 30% of merchants last year didn’t publicize guaranteed delivery cutoff dates. And those that did set the cutoff an average of one day earlier, compared to the previous year. This change was in part due to the availability of last-minute alternatives such as BOPIS.

To realize the full potential of BOPIS for the holidays, merchants should test the functionality of their system extensively, including monitoring online inventory visibility for accuracy, fine-tuning post-purchase transactional emails and notifications, streamlining mobile BOPIS features, and using outsider “mystery shoppers” to ensure store signage is clear and pickup counter service is on-point.

Prepare to capitalize on pickup traffic in stores.

Some 36% of consumers who use store pickup report buying additional items off the shelves, according to Forrester. Anecdotal evidence suggests that during the holidays, that percentage is even higher.

BOPIS users who buy additional items say that special deals highlighted in-store are among the top reasons they make additional purchases, according to Forrester. Merchants should therefore ensure that store pickup customers are cognizant of the latest holiday deals. Transactional emails and pickup notifications should feature an invitation to receive localized deal alerts via email and/or mobile.Signage near the pick-up counter should give shoppers another opportunity to learn about in-store events and promotions. Assortments of stocking stuffers and other gift-friendly merchandise should also be on prominent display nearby.

Train seasonal store workers to “save the sale.”

More than half of store shoppers are willing to have out-of-stock items ordered online and shipped to their home, Forrester found, suggesting that merchants who are well-prepared can indeed “save the sale.”  Shoppers are increasingly using this option, with close to 60% of participants in Kibo’s 2018 Consumer Trends Report survey saying they’ve relied on store associates to locate items elsewhere in the past six months – an 18% jump compared with the previous year.

To take advantage of this opportunity, merchants should ensure that regular and seasonal store workers are well-versed in procedures for locating and ordering items from other outlets, and store-to-store inventory tracking should be tested for accuracy.

Prepare for the wave of post-holiday returns.

In addition to optimizing the potential for customer acquisition and sales using omnichannel fulfillment, merchants should also spend time before the holidays vetting their reverse logistics. That’s because anywhere from 20% to 30% of items ordered online are returned, according to Multichannel Merchant – and the percentage can surge still higher during the holidays. Indeed, in 2017 Deloitte found that some 44% of shoppers predicted they’d take advantage of policies that enable easy returns.

Fully 58% of shoppers prefer to return items to local store outlets, according to UPS’ Pulse of the Online Shopper report – and given that up to 70% of in-store returns can result in new sales, merchants should promote the option, if it’s available, to encourage disappointed gift recipients to visit and examine alternative purchases. Even if immediate new sales don’t result, flexible and hassle-free returns can engender plenty of holiday goodwill, earning brand trust and a possible future repeat visit.

How are you preparing order management operations for the holiday rush?

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