Omnichannel Retail: Distributed Order Management Fills Customer Orders from Any Location

Tags: distributed order management e-DOM multi-channel omnichannel retail operations web order fulfillment

Many multi-channel retailers struggle to fulfill customer orders. In particular, brick-and-mortar retailers are still hampered by lack of integration among legacy systems and supply-chain organizations that are still managed quite separately. The Distributed Order Management system from Jesta I.S. can help such retailers fulfill multi-channel orders.

Rising Customer Expectations

It’s old news that multi-channel shoppers expect a consistent, seamless shopping experience across all their preferred channels. What is new is how much more customers expect.

Online retailers are setting a very high bar for other channels. Shoppers at Amazon.com, for example, have come to expect next-day delivery of items they purchase. They can get such service free or at very low cost. Now many Amazon customers expect brick-and-mortar retailers to take orders in their stores and ship to their homes, also with fast service at low cost. Wal-Mart and Amazon offer same-day delivery in some urban locations. If the trend continues, their customers may soon expect other retailers to step up to this new standard as well. The stakes are high. Numerous studies show that multi-channel customers are more valuable to retailers than single-channel customers.

Stores as fulfillment centers

Rising customer expectations make it necessary for retailers to fulfill customer orders as efficiently as possible, from wherever inventory is available. This means both stores and distribution centers are now serving as fulfillment centers. Distribution centers can usually fill customer orders much more cost-effectively than stores. But retailers can achieve a huge benefit by using stores as fulfillment centers: They can move more excess inventory from their stores without having to mark it down. By reducing markdowns, they increase both revenue and gross margins.

What retailers need to fulfill customer orders from stores, retailers need back-office systems that can identify inventory availability in real time. A recent survey from RIS News indicates that 45.2% of the respondents currently have that capability. But only about half that number – 26.9% – say they can fulfill digital orders through their stores. How one system does it? Jesta I.S. offers a Distributed Order Management system that helps multi-channel retailers fulfill orders from anywhere they stock inventory.

Here’s how it works:

1. When a customer order arrives, the system checks the items on the order and the customer’s ship-to address.
2. The system finds the closest inventory-stocking location that has most of the items on the order.
3. If an order contains multiple items, it checks whether all items are available from any one location. If not, the system determines the optimal combination of locations to fill the order at the lowest shipping and handling cost.
4. The system puts a hold on the items in the order so they aren’t sold to someone else.
5. It generates a pick order with the customer’s ship-to information.
6. It interfaces to the systems of United Parcel Service to pick up the order. It also interfaces to other systems so customer-service agents can track the delivery status if a customer inquiry arises.

The module can interface to any front-end order-entry system. The order may come from a web store, a catalog system or a merchandising system. On the fulfillment side, it can search for inventory available from the Jesta I.S. Vision Merchandising System or from Vision Sourcing and Demand Management. To manage the number of fulfillment orders you send to any location, you can designate which inventory-stocking locations get the highest priority in filling orders.