3 Tips for Order Management in an Evolving Retail Landscape
As states around the U.S. cautiously begin to reopen, the reawakening of the brick-and-mortar retail industry will be a phased approach. But even when all restrictions are lifted, consumers may not be ready to dive right back into their old shopping habits. At-home delivery and curbside pickup will likely remain popular among customers who feel unsure about walking into a physical location.
Retailers don’t have an easy road back to business as usual either: much of their inventory is probably residing in distribution centers or shuttered stores, given how difficult it has been to move inventory and orders over the past couple of months.
Given these changing expectations and logistical obstacles, retailers will be challenged to achieve profitability. Ask a retail CEO what their most significant cost issues are today, and chances are fulfillment and inventory will be at the top of the list.
Amid the uncertainty of the current situation, better customer service is essential. As such, retailers are working hard to provide customers more paths to purchase and faster delivery to rebuild loyalty and drive engagement with their brand. To foster memorable — and profitable — shopping experiences in the social distancing era, retailers should consider implementing the following three strategies for intelligent, flexible order fulfillment:
1. Take the shortest route available.
Since mid-March, a season’s worth of merchandise sitting in dark stores has fallen out of style or become irrelevant. Retailers can help address these inventory overloads by enabling rules for shipping priority. Instead of shipping new products from distribution centers per usual, they can consider sending first from the stores where there's surplus inventory. This approach protects margins by preventing further markdowns.
Furthermore, retailers can set location priorities to ensure every order is fulfilled as close to the customer as possible, saving on shipping and handling expenses. Let’s say a retailer receives an order for a dress. There are two stores to pick from, both overstocked: one’s in Dallas, and one’s in Chicago. If the customer lives in Houston, shipping from the Dallas store location — almost 800 miles closer — is a no-brainer.
This strategy also allows retailers to move out inventory that won’t perform well in a particular store. For example, a Tom Brady jersey will always sell in Boston, but the demand might be even higher in his new football home of Tampa. Retailers must simply meet the eager customers where they are.
2. Level up the tech.
As retailers look to expand their fulfillment options in light of current restrictions of the phased reopening, the chances of overextending their businesses are disproportionately high. By taking a bite-sized approach to broaden their service offerings, brands can layer in one new customer journey, such as curbside pickup, at a time. This phased rollout allows the profitability of each new customer journey to fund the next customer journey. With so many balls in the air on the inventory side, a modern order management system also provides an essential safety net.
More specifically, a sophisticated management system fulfills orders by leveraging brokering options such as:
- Weigh Your Options: Weighted assignments allow retailers to use multiple criteria such as sales velocity, proximity, and margin to make any given fulfillment decision.
- Make a U-Turn: Use probability rules to override standard fulfillment rules for products or product classes when it makes more sense for the business.
- Enable One View: Empower associates and consumers with a 360-degree view of available inventory.
3. Experiment with retail data science.
For all of this operational change to run smoothly, swift, seamless communication among all parts of the retail enterprise is essential. Today, doing so most effectively means harnessing the economic and computational capabilities of the cloud.
Pairing the power of the cloud with retail data science gives retailers the tools and infrastructure needed to conduct mathematical modeling to analyze all fulfillment options. From margin analysis to location profitability, the methods of turning data into profit are more plentiful than ever. Put more simply, retail data science allows brands to leverage customer insights to strengthen existing shopper relationships — and target potential new ones.
Ever-changing customer standards and expectations consistently drive retail industry innovation. As those evolve during the recovery, retailers will continue to innovate with new ways to shop for, buy, and deliver goods and services. To stay in front of these shifting priorities, retailers must not only be adaptable, they must operate in a coordinated and efficient fashion.
Jennifer Polumbo is a stores and commerce solution manager at Oracle Retail.
Jennifer Polumbo is a Stores and Commerce Solution Manager at Oracle Retail. Jen started working in retail during college and transitioned to retail software after graduation, though one might credit her love of shopping as the earliest start. She has 20+ years of retail expertise in areas such as order management, warehouse management, and point of sale.