The way consumers shop is ever evolving, and retailers are striving to meet these consumers where they are. While many retailers have begun offering multi-channel solutions to consumers in an attempt to keep up with general societal demands, without fully integrating into an Omni-Channel toolset built to meet these needs, retailers are creating more work for themselves and often miss the mark on meeting the expectations of their customers. Investing in a Distributed Order Management solution enables retailers to track all of their inventory in one place, trend out point of origin of demand for better forecasting and demand planning, and offer consumers multiple ways to get the product they want, when and how they want it.
Allowing for consumers to drive business requirements for product placement also gives retailers the opportunity to better understand where product is truly expected to be – physically or virtually. For the retailer, gaining better insight into the point of origin of demand enables more strategic inventory placement, and reduced overall losses due to an ability to identify demand swings early on across the network. A higher level view of how different items are selling also allows flow adjustments to reduce markdowns maintaining strong profit margins. This also extends beyond brick and mortar with on-line fulfillment from store reducing clearance on items from a region that may be closing out on a particular season or doesn't have as high of a sell-through rate.
One approach to addressing evolved consumer expectations that we are seeing an increased interest in, is Distributed Order Management. Distributed Order Management is the ability to fulfill a customer order in a multitude of ways based on what is most effective and efficient for the business. DOM offers the consumer various ways to place their order, whether it be in-person or on-line.
Once the order is received, many variables must be taken into account to fulfill it. A solid DOM system will be able to provide logic and decisions around scenarios such as:
- Cost effectiveness of splitting up the order between fulfillment centers
- Use of stores as fulfillment centers to reduce distribution center eaches fulfillment
- Sell-through rates of the SKU in-store
- Cost of shipping from various locales
- Seasonal shifts in demands for certain SKUs and shifting end of season stock in one location to fulfill demand in another
The complex and dynamic nature of Distrubuted Order Management make this a subject with relevance across the value chain. In our IDC PlanScape: Distributed Order Management (Document # 257112) we identify what a Distributed Order Management system is, who they key stakeholders are and what is the impact on each stakeholder, why it is important for retailers to evaluate investing in a DOM system, and most importantly how to approach the process of deciding to invest, and implementing the tool itself. The document will serve as a starting point for those retailers that are interested in the benefits that DOM systems bring to the table, but also covers some key points that solution providers should consider in the development of products to support retailers as well as consumers.