With online shopping and smartphones becoming the predominant mode of shopping and information abundance bringing true price transparency, today’s shoppers have taken the perquisite to compare, review and buy products on the move. This advantage becomes even more apparent during holiday season such as Black Friday and Cyber Monday, where customers hunt from a plethora of deals. As per eMarketer.com, eCommerce sales will grow by 17 percent during the holiday season 2016 and form 10 percent of the total retail sales during holiday .
Online channel has become the fastest growth engine for retailers. However, to cater to the demand, e-stores should be available, scalable, reliable, and robust to provide great shopper experience. Gone are the days of resource-light websites, frequent outages and system errors; high growth has brought new challenges for retailers to make their online channels scalable and available 24*7. More retailers than ever are adopting Omni-channel / hybrid store strategies to increase sales and provide a seamless experience to consumers.
A critical component of this growth requires scalable Order Management System (OMS), which acts as a custodian of orders by interacting with different systems such as order capture, product management, pricing, promotions, payment authorization, fraud management, tax, warehouse management, payment settlement system and financial systems. This puts additional stress on OMS, as Low performance of OMS impacts the lifecycle of orders and can lead to sub-optimal customer experience.
It is therefore imperative for retailers to stress test e-store and OMS thoroughly.
Current Trends in Order Management Systems
OMS has come a long way from being a standalone desktop application to a complex integrated system in the enterprise architecture. Today, order management systems are moving towards build anywhere, customize anywhere and sell anywhere applications. Most of the order management packages are now moving towards the cloud and host multiple retailers with diverse needs on a single platform. These systems not only manage orders but also integrate with different systems such as Big Data for Analytics, Mobile Apps and Social Media.
OMS in the Enterprise Architecture Landscape
OMS interacts with myriad enterprise systems from order capture to order delivery, during the order life cycle, and therefore, forms the core of enterprise architecture for any retailer. Figure 1 represents the snapshot of the main components that OMS interacts while fulfilling the order.
The architecture depicts different sources of order capture channels such as Point-of-Sale (PoS), Mobile, Desktop, Market Place and Kiosks etc. Customers and associates can access the omni-channel basket and modify it across channels. OMS also helps in fulfilling different line items in an order as per the needs of the channel. For example, in the same order the customer can buy online pick up at store, ship from store, ship from warehouse, ship to multiple locations etc.
OMS gives retailers flexibility to have seamless integration with third party systems such as drop ship vendors, carrier services, third party logistics systems, market place vendors, fraud detection and prevention systems. During holiday season, online and offline channels spike at different days.
For example, offline store sales spike on Thanksgiving Day while online sales spike on Black Friday and Cyber Monday. For example, figure 2 provides the snapshot of spikes during these two different days. From the graph, the initial hourly sales on Thanksgiving Day are zero, since the stores are closed. But we see continuous orders from online channel. When the stores open in the evening, we see spike in store sales, but no spike in online sales. On Black Friday as the day progresses, we see rise of online orders, while the store sales decline.