How to Succeed as an Online Retailer

Online shopping is experiencing a meteoric rise. The number of online retailers are multiplying, giving customers more incentive to search for something to buy online. And as the web and web services become more integral to people's lives, eCommerce is set to grow even further.

Even though the COVID epidemic was devastating to so many industries around the world, it provided a tremendous boost to eCommerce resulting in a remarkable growth spurt. When you look at worldwide eCommerce numbers, transactions to a total of US$ 3.53 trillion were traded in 2019—and this number is expected to grow to US$ 6.54 trillion by the end of the year 2022.

So how can an online retailer position themselves to take advantage of this growth in the market? And how can a retailer distinguish themselves in the market and rise above the competition?

Building a Solid Customer Base

What does it take to be a successful online retailer? You have to build a reliable, loyal customer base. Your eCommerce business will rise or fall on the back of your customers. Which means you need to generate good word of mouth.

Customer loyalty to your brand is won with hard work and excellence, encompassing the two main areas where your customers interact with your brand: their experience when they shop at your online store, as well as their post-purchase experience when they receive delivery of your product.

When customers buy something from your company, they interact with your brand via your website, any apps which sell your goods, as well as the different social media platforms where you make your goods available. Here it's important to give customers a unified experience, whether they browse for your products, go through your checkout process, or pay for their shopping cart. Integrated technology drives this process.

But once they've completed their purchase, their post-purchase experience comes into play. This starts with quick and efficient order fulfilment and delivery to their doorstep.

If a customer has a positive experience with how well you fulfil their order, they will be much more likely to shop at your online store again. When you look at online surveys, as many as 96% of customers say that a positive post-purchase experience will encourage them to shop with a particular online store again.

If you want to build a solid customer base, you must fulfil all orders accurately and speedily. You must offer shipping that is fast, flexible, and affordable. The management of online orders comes down to putting in place an effective process to route and fulfil orders, as well as minimising human error.

The question is, how to achieve that?

The Steps in Fulfilling Orders

There are many steps between a customer clicking on the "buy" button on an online retailer's website, and the correct product arriving at their doorstep. There are also a multiple of places where this process can be derailed—which will cause a headache for your team and frustrate your customers.

Even though different online transactions need specific workflows, there are certain steps that are common to all online orders:

1. Firstly, a customer visits an online retailer's website (or a third-party retailer that offers the company's goods) and places an order.
2. Next, the online retailer registers and accepts this purchase order. This is either done with a manual system or dedicated order management software.
3. Then an email is sent out to the customer to confirm their order and a receipt for payment. Often these emails give a delivery estimate or link where the customer can keep tabs on their order.
4. With the order now in the company's fulfilment system, a sales order is generated and items from the inventory are allocated to the order. This process may either be manual, or could be managed automatically by software.
5. Now the details of the orders are sent forward to the warehouse for fulfilment. The workers at the warehouse need to check stock levels and confirm that the specific product is available for shipment. Then the correct goods are picked, packed, and shipped out to the customer.
6. An email is sent out to the customer to confirm that their order has been shipped out. Order tracking information may also be provided. At this point in the process, the retailer might have to restock the sold product.
7. Next the customer takes delivery of their order. The retailer will also check up on the customer to make sure they're happy.
8. At this point, the customer might decide to query the company via email, social media, or by phone to raise an issue with their order.
9. If the customer experienced a problem with their order, the retailer will try to resolve their problem. This could mean sending out a replacement product, giving a refund, or some other solution. All of these remedies might have an impact on inventory.
10. Lastly, the retailer could ask the customer to leave a review.
    

The Rise of Order Management Systems (OMS)

The way companies manage their order fulfilment steps has changed considerably over the years. Years ago, retailers used a paper system combined with spreadsheets. Some companies still use a manual system to this day. Nowadays, the biggest and most successful online retailers use dedicated software to automate the order fulfilment processes we described in the previous section.

The wide acceptance of the internet gave rise to online stores. The invention of smartphones and tables resulted in myriads of mobile apps where people can now shop using their smart devices. When large, American online retailers like Amazon, eBay, and also Walmart started to take off, these major companies found that basic order management wasn't nearly sufficient for their needs. They needed to manage orders and inventory across their various sales channels at the same time.

The result is dedicated Order Management System (OMS) software to automate the order fulfilment process. OMS evolved to integrate website and mobile shopping carts with their backroom order fulfilment processes. Many of these functions could now be automated— which improved the quality of their services and customer experience.

This allowed the companies to grow exponentially to the point where most of them sell more goods online than in their brick-and-mortar stores. In fact, it's fair to say that OMS completely revolutionised the online retail industry. This is because it combined inventory management with all the different sales of a company as well as the backend order fulfilment process.

Even though your eCommerce operations are probably much smaller than these big, American, retailers, it doesn't mean that your business won't benefit tremendously from OMS software. If you don't start using an OMS in your business, you will soon fall behind the competition.

Why do you need an Order Management System?

The main reason for using an Order Management System is to improve your order fulfilment process. The goal is to optimise the order-to-cash cycle (OTC) of your business—which is how you receive, process, manage, and complete customer orders. Included in this process is everything from collecting payment, shipping the items, creating invoices, and reporting.

A well-functioning order-to-cash cycle is important for any online business, as it will have a direct effect on your bottom line and customer experience. This is where dedicated Order Management Software (OMS) becomes extremely useful. It manages all the people, processes, and integrations that need to work to together to fulfil an order, including:

• Payment
• Customers
• Inventory and Stock Levels,
• Suppliers and Third-Party Logistics (3PL)
• Returns and Refunds
• Invoices
• Pick, Packing, and Shipping
• Financial Integration
• Reporting and Analytics

A good-running OMS will benefit all of these backend processes. The software will also integrate orders coming from different sales channels in one system.

Your current eCommerce platform or ERP (Enterprise Resource Planning) software won't be able to handle all of these functions, or integrate them with each other. The OMS will track all your orders and their various processing functions across all of your sales channels, and will then be tasked with syncing the necessary information into your current ERP systems as needed.

Conclusion

You might have a popular product with a sales staff that's on fire. But if you're unable to fulfil all the orders coming into your business in a timely and accurate manner, your business will struggle to keep up to demand and your growth will suffer.

If you want to succeed as an online retailer, it isn't enough to win new customers to your brand. You also need to keep your existing customers happy—which means you have to provide excellent service. It's difficult to win new customers if your existing customers are unhappy with the fulfilment of their last order—which means they will leave bad reviews that will put off new customers.

A properly set up OMS will become the central platform from which you will be able to manage the critical processes for both your online and offline sales channels. If you want to stay on top of your orders and provide consistently excellent service to your customers, Order Management Systems is the answer.