Today’s savvy customers expect more than the right product at the right price. For a truly great customer experience that will drive sales and customer loyalty, customers expect (and demand) more. They want more choice, flexibility and convenience in relation to product, service and delivery. They want retailers to personalise and tailor their offerings. In fact customers want simplicity and in the future they’ll only shop with those that will give it.
Whilst this is all great for the customer, remember the retailer whose operations are getting increasingly complex as a result. For a retailer, it’s no longer a simple case of receiving an order and fulfilling it. Just look at all the delivery options now available: next day, same day, 90 minutes, timed deliveries, deliveries to lockers, Click & Collect. The options are increasing all the time, and set to increase further.
Being able to provide customers with this level of choice requires even tighter and slicker operations than ever. It used to be about the relationship with the courier and then the multi-courier. As Lyndon Cerejo pointed out in his recent blog on Making it to the last mile – how not to turn your customers off with shipping options customers expect multiple, relevant, cost-effective delivery and returns options that provide a seamless customer experience. I would argue that whilst still absolutely important, this alone won’t unlock profitability, capacity and future growth.
Bringing calm to the potential information mayhem
Strategic Order Orchestration (SOO) can become the new BFF to the forward looking retailer. From the point at which the customer has browsed, inventory, delivery options and cost-to-serve can be calculated so that only certain options or certain prices are displayed to the customer. How about rewarding the customer based on their degree of loyalty to your brand and personalise the pricing for your customers? How about using under-trading stores as pick locations?
SOO can make all of this happen. Through visibility of stock in all locations (Fulfilment Centres, Drop Ship Vendors, stores etc.), it can calculate the most effective and efficient location for the pick and move the right stock to the right customer at the right time to manage (and reduce) complexity, and do so profitably.
Most retailers now have an online presence, but how many are actually turning a profit? How many actually know what their cost to serve is? How many use that information to inform who, how and when they serve customers? SOO can leverage this data and make use of analytics to help drive a more efficient and effective operation.
Without this information, retailers struggle to turn a profit in their online operations, and also inhibit their own growth, as benefits cases for additional customer propositions become too difficult to prove, or track the return. Retailers strive to add proposition options for the customer, but in so doing inject additional complexity and cost into their operations. How sustainable is this guess work?
Implementing SOO means a customer can place an order across multiple categories, delivery timescales and suppliers and be managed through a supply chain via multiple stocked locations; which, to the customer, appears seamless (even though this may necessitate picking at multiple locations and consolidation en route or at delivery point). SOO is the intelligence that sits behind all of this and brings calm to what could be construed as mayhem. It quietly orchestrates the operation and ensures the fulfilment process is optimised (for both customer and retailer).
Greater Customer Choice and Convenience
SOO delivers benefits directly to the customer:
- Customers can add multiple products, categories and product types into one basket, amend and link baskets, select a myriad of delivery options and only checkout once;
- SOO has visibility of all stock in all locations, delivery options and timescales;
- It acts as a framework that collects data from various sources (inventory management, warehouse management, courier networks) and can make promises to customers;
- In relation to stock availability, the ‘Available To Promise’ stock is based on the rules that govern supply and a hierarchy of locations against which it can offer;
- A series of availability checks are run throughout the checkout process, along with checks for delivery options based on business rules and customer choices; and
- Once the customer has made their selection, an order promise can be made and the stock pegged to that order.
As the ‘brain,’ SOO can render a whole number of business capabilities possible. It offers greater choice and combinations of offer, product and fulfilment, but also opens up possibilities to the retailer in relation to alleviating potential hot spots, adding proposition options and reducing cost to serve. These include:
- Ability to deal with multiple delivery timings in one basket (e.g. named day, same day, next day, standard);
- Support of multiple delivery options in one basket including home delivery, click & collect and 3rd party collection locations;
- Ability to deal with both own Fulfilment Centre and Drop Ship Vendor (DSV) stock;
- Opportunity to use store picking to fulfil customer orders;
- Possibility to take orders now and then payment later;
- Link into replenishment processes to maintain availability; and
- Provision of easy, simple and effective returns options
Cost-Effective Fulfilment Options
SOO can ensure the most cost effective fulfilment route is used to meet the customer promise (which may not be the cheapest). It would be based upon business case-driven rules ensuring full visibility of costs and proposition trade offs regarding time, cost and service. Regardless of what the customer has chosen, once the order is confirmed, the next part of the orchestration ensures those promises are kept:
- Once promised, the order is decomposed and sent to the relevant stocked location(s) for fulfilment (this may not be via a Fulfilment Centre, how about a local store pick?);
- Complex baskets are easily managed through SOO as one order can be split and directed through to multiple fulfilment routes, but the entire order can still be tracked regardless of how and where it is being fulfilled;
- Tracking also enables jeopardy management in the case of a problem in the fulfilment process that may push the order (or part of it) outside of the original process
So, what next?
Successful retailers understand the importance of each step a customer’s order takes in the online fulfilment process. To compete in the ever-demanding world of customer expectations, SOO is fast becoming the new way to keep one step ahead and provide room for future growth.
To find out more about Strategic Order Orchestration and how Capgemini’s All Channel Experience can support your business click here