Smart Order Routing: An Overview for Retailers
Posted by Alex Samuely on Oct 24, 2023
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There are many different omnichannel shopping options today. One of the ways to best adapt to customers’ needs is for retailers to provide quick order fulfillment. They can do this by leveraging smart order routing.
Investing in automated processes like smart order routing can remove friction from the fulfillment cycle, facilitate more inventory movement, and keep customers happy with fast deliveries. Let’s learn more.
Smart order routing enables brands to automate the process of selecting a location from which to ship orders to their purchasers. Shipping locations can include a specific brick-and-mortar store, warehouse, or distribution center.
With smart order routing, brands can configure specific rules that instruct their order management systems how to fulfill and order based on their business requirements. For instance, they may ship items from the store located closest to the customer, a ranked location (such as a warehouse with a high number of inventory items), or any location containing the biggest share of items in a shopper’s order.
Brands can face many order routing challenges, especially as their customer bases grow. For example:
Read below to learn how smart order routing can benefit both retailers and consumers.
Smart order routing allows for retailers to leverage several types of locations to assist with quickly filling orders. This lets brands leverage ship-from-store fulfillment options, which enable them to fill online orders at brick-and-mortar locations and ship them to nearby customers in lieu of relying on fulfillment centers, which may be far away.
Not only does this type of fulfillment model help save on shipping costs because packages travel over shorter distances, but it also helps ensure greater stock availability. Distribution centers only have a finite number of each product, but stores tend to carry inventory that appeals to their local clientele. Therefore, it’s likely that the store closest to the shopper will have their products in stock and be able to ship them quickly. This also frees up space at physical locations to receive new inventory.
In addition to leaning on physical stores, distribution centers, and warehouses, brands may opt to use wholesale routing. With wholesale routing, retailers allow external wholesale companies to fulfill orders when they no longer have the customers’ requested items in stock.
For example, an in-store shopper may want to purchase a style of pants that’s no longer in stock. If the pants aren’t available at any other location and the retailer has enabled smart order routing, a store associate can send a fulfillment request to the wholesale company. If the wholesaler fulfills the order, the retailer will receive a smaller profit but will succeed in achieving customer satisfaction.
Ultimately, strategic order fulfillment yields many benefits, spanning lower shipping costs, greater customer happiness, easier omnichannel returns, and faster delivery times.
As many retailers make more concerted efforts to bring sustainability into their businesses, smart order routing provides several ways of doing this. Brands can leverage item-level ordering to fill an entire order from one location. This cuts down on split shipments, which translates into using less packaging material and saving on complex transportation costs.
Furthermore, smart order routing empowers brands to create more sustainable shipping experiences by avoiding item markdowns. Brands can opt to fulfill orders from a location that is preparing to mark down inventory. This practice enables brands to offload inventory that isn’t selling before sending it to a landfill.
Not only do these practices help foster a more sustainable world, but they also may drive more loyalty among environmentally conscious shoppers.
If orders can ship from the closest location to the customer, shoppers will experience faster shipping options at a lower cost. Customers who receive their purchases more quickly, and spend less or spend nothing on shipping fees, will have higher satisfaction.
Even more, smart order routing can help prevent stock outs by directing orders to the store or warehouse with available inventory. Similarly, by reducing the need for manual intervention in the order fulfillment process, smart order routing can help minimize errors in order processing. When customers can purchase items they want, and receive the correct items and quantities they ordered, they are more likely to be satisfied with their shopping experience.
In summary, smart order routing enhances the efficiency and accuracy of order fulfillment, which may encourage shoppers to continue ordering from that retailer, as opposed to shopping at a competitor next time. The increased brand trust in the short-term will lead to a lifetime of customer loyalty.
Retailers can leverage a flexible order management system to support smart order routing. A flexible order management system tracks all inventory on one platform. It also displays all purchase data on a dashboard, making it a one-stop shop for up-to-date inventory information. This data then helps predict which items will need reordering and manages returns with more efficiency.
Additionally, flexible order management systems support item-level order routing. This form of smart order routing helps brands optimize their product fulfillment to lower costs and shorten delivery times. It also allows customers to choose their preferred form of order fulfillment, such as shipping, BOPIS, or curbside pick-up.
As retailers consider ways to enhance their omnichannel fulfillment options, investing in a flexible OMS with smart order routing should be a top priority. Not only will this help scale the business, but it will also provide a better customer experience. Retailers will benefit from greater inventory oversight and more sustainable shipping practices. Meanwhile, lower shipping fees and quick delivery options will increase customers’ loyalty in the long term.
Want to learn more about our flexible order management system? Reach out for a demo today.
