Sep 8, 2022
Multichannel Order Management: A Key Driver of Digital Transformation
Expanding business across multiple channels can be hard for retailers. But with the right tools and software like a multichannel order management system, you can make this transition easy. Read how multichannel OMS can digitally transform businesses and help them grow.
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What is Multichannel Order Management?
The continuous process of managing all your inventory and sales orders of multiple channels on a platform is referred to as multichannel order management. There was a time when it was done manually but modern retailers are using digital solutions and systems for multi-channel order management.
A multichannel order management system streamlines the process across different online channels and physical locations. It assists a multichannel order manager to aggregate inventory from all physical locations and sync it to different online channels. You can get orders from multiple channels in one place and can assign orders to different locations based on inventory availability. Thus, you get an all-in-one solution for managing orders and inventory across multiple channels including your website and marketplaces.
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Multichannel Order Management Market Growth
The multichannel order management market has seen incredible growth in recent years. In 2020, its global market value was estimated at 1.58 billion USD which is astonishing but not unexpected. And the market research data suggests that it’ll continue to grow further.
For the forecasted period (2021 - 2026), the multichannel order management market growth is expected to bloom at a CAGR of 10.3%. This is a very promising number that shows us a clear picture of the market trend. Whereas North America is the largest market and the Asia Pacific region is the fastest growing market.
This simply represents that retailers should sell products across platforms to boost their revenue. Moreover, they need to implement effective multichannel order management strategies to manage their business accurately. For that, they should be aware of the challenges which they might have to face.
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Challenges of Multichannel Order Management
Selling across different channels is profitable but it can be hectic. You get to market and sell your products to the right audience on the right platform. But, keeping track of orders and sales on multiple platforms is a tedious task for any multichannel order manager. Below are some major challenges of multichannel order management that retail businesses have to face.
Difficulty in Inventory Management
The key to success when selling across multiple platforms is inventory planning. This includes inventory forecasting, keeping the optimal inventory levels, and displaying all your inventory online. Keeping the wrong inventory levels can increase inventory carrying cost and dead stock and lower your profit margins.
Moreover, you must be aware of your inventory levels and should know when it is changing in real time. This will help you avoid dead stock and prevent overstocking. You need to distribute your inventory in such a manner that stock is always available in your multi-location stores and it should also be visible to online buyers.
Complexity in Order Fulfillment Processes
One of the major issues of multichannel order management is keeping track of SKUs. The process is more complicated when you are selling on multiple channels than on one platform.
The process of order fulfillment becomes complex as you may have to follow different methods for different channels. Also, retailers have to transit inventory between warehouses to effectively run their business. This is where you may lose track of your stock if you don’t have the right system.
Performance Insights on All Channels
For any business, data is crucial to making informed decisions on time. You can easily track and monitor the performance of one channel but managing more than two is tricky. You may have to look at excel sheets for hours to find the right data. The situation only becomes worse when retailers have to explore data from online channels like Amazon.
Even if you hired skilled labor for reporting, you may not be able to make good decisions. Data which cannot show a clear picture of orders and sales is useless.
Pro Tip: Managing business on multiple platforms is tricky but you can avoid the complexities with a multichannel order management system. An all-in-one OMS allows you to process and manage orders in real time by automating your entire workflow.
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Essential Features of a Multi-Channel Order Management System
A multi-channel order management system is the right tool for a multi-location retail enterprise. However, before you invest in one, you must ensure whether it can meet your business needs. We have enlisted some key features that a multichannel order management system should have.
Multi-Location Inventory Management
A multichannel OMS is of no use if it cannot show the collective inventory status of each location in one place. This means that the system should be seamlessly integrated with your multi-location warehouses. This way you can pick the nearby location for order fulfillment and see whether an out of stock product is available in another warehouse. It should also be able to sync the aggregated inventory of all the location to all the sales channels so that you can reduce inventory carrying and avoid dead stock.
Native E-Commerce Integrations
Online integration is an essential feature that every multichannel OMS should have. This allows retailers to integrate all their online channels with offline stores. Thus, you will experience a seamless workflow and monitor the order fulfillment process on your website or other channels.
A good multi-channel inventory and order management system can integrate your business across various marketplaces including Amazon, eBay, Walmart, Shopify, and Daraz.
Flexible Order Fulfillment
The whole point of having an OMS is to automate the workflow. Get an order management system which can pick the warehouse or fulfillment method by itself depending on the order. This will enable you to fulfill and ship orders in the fastest and cheapest way possible.
An order management system which has or can easily be integrated with POS is the ideal choice for retail businesses. This will enable your customers to buy products seamlessly whether they are shopping online or in-store. Furthermore, you will be able to keep track of inventory and total orders placed in one system.
Data-Driven Inventory Planning
The right multichannel OMS will provide you with instant access to data for inventory planning. You can see high-selling items and slow-moving stock to make informed decisions.
A crucial part of order management is the analysis of post-purchase metrics. For this, retailers need real-time data of their sales, orders, and inventory. This is where the right OMS will come in handy and make the process easy for the multichannel order manager.
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Benefits of Multichannel Order Management Software
The perks and benefits of having a multichannel OMS are hard to overlook. Below are some main ways how multichannel order management software can boost your business.
Expanding Your Sales Platform
One of the biggest benefits of multichannel OMS is that it magnifies your sales and that too on multiple platforms. You can establish your eCommerce website, manage multi-location stores, and sync online and offline channels on one system. Moreover, it makes it easy for retailers to sell products across other marketplaces like Amazon, eBay, Walmart, Shopify, and Daraz.
Maintaining Precise Stock Levels
The main challenge that businesses face while selling across multiple channels is keeping track of inventory levels. Many fail to maintain the stock levels only because they were unable to manage inventory or order data. Overselling of products on one or more locations creates a stock shortage which can easily be avoided through OMS.
A good multi-channel order management system diminishes inaccuracies by providing precise stock information. Retailers can measure inventory across multiple channels and keep track of orders and stock movement.
Accurate Order Fulfillment
Fulfillment mistakes may happen when you are balancing orders across multiple channels. This can then lead to delayed shipments, wrong orders, and unhappy customers. Multichannel order management systems can reduce such risks by ensuring all orders are managed through a single platform. These systems have features and tools which can generate labels and help retailers mark orders. As a result, retailers can reduce fulfillment mistakes and get to offer a faster turnaround time.
Selling Based on Demographics
A multichannel order management system not only integrates different marketplaces but also provides useful insights. Based on the data, you can make informed decisions to market specific products on a specific channel to the right audience. By identifying sales trends and engagement time, you can run successful marketing campaigns.
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Average Pricing of Multichannel Order Management System
Now that you are aware of the benefits and features of a multichannel OMS, let’s discuss the average pricing. But you must keep in mind that the prices of multichannel order management systems vary depending on their features and technology. This also depends on your business needs and inventory levels.
The average price of a multichannel order management system starts from $50 but most software cost about $500 per month. Then there are additional setup costs and training fees which you may have to pay. That's where XStak’s Omnichannel Engine (OE) stands out from other order management systems.
OE is an all-in-one multichannel order management system which is based on the usage-based pricing model. Instead of paying a premium amount every month, you'll only be charged based on your usage of the OMS. So technically. you’ll only pay-as-you-go depending on your use of multichannel order management software.
Not to mention the remarkable features that OE has to offer. Our cloud-based OMS not only automates the workflow but also synchronizes inventory across selling channels and marketplaces. You can manage orders as well as shipping and stock lists from one dashboard. The best part is that OE offers BI reporting to make informed decisions and shows you a clear picture of your business in real-time.
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Multichannel order management is the key to digital transformation for retailers who want to sell across multiple platforms. It allows you to keep track of your inventory at different locations, sync your offline inventory online and automate your entire order management process.
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