From the warehouse to the doorstep (and sometimes back to the warehouse), seamless order management is essential to provide a satisfying experience for customers.
Order management lives at the intersection of customer relationship management, resource planning, and supply chain management. It is the very core of a good customer experience in ecommerce.
According to Salesforce, “consumers have come to expect lightning-fast shipping times and complete transparency”. Order management is a key capability to provide this experience. To keep up with customer demands, order management systems must be scalable, lean, and flexible.
To enable the capability of seamless order management requires a fundamental shift in the software backbone of ecommerce.
The future is composable commerce
Composable commerce is a relatively new approach in the ecommerce industry.
If you don’t know what it is, it’s very easy to understand. An all-in-one solution, like traditional Shopify or Magento, is a monolith system that contains all the features that your business might need, as well as many more that you’ll never use. The main benefits here are simplicity and reliability, it’s basically plug & play. However, you can’t really:
- Upgrade separate parts of your system without rebuilding the whole thing,
- Quickly implement new features without interfering with other functionalities,
- Pay only for the features you use instead of the whole package,
- Easily change vendors when your needs evolve.
All of these issues are solved by the composable commerce approach. Composable commerce empowers brands to curate their own tailor-made commerce solutions by integrating various standalone, best-of-breed components through APIs. It’s all about flexibility and adaptability to unique business needs and market changes.
The result is a custom-built, modular system that perfectly encapsulates your business. Gartner reports that:
“In the continuously changing business context, demand for business adaptability directs organizations toward technology architecture that supports fast, safe and efficient application change. Composable application architecture empowers such adaptability, and those that have adopted a composable approach will outpace competition by 80% in the speed of new feature implementation.”
Why would you care about the speed of adding new features? New customer touchpoints emerge constantly, and customers expect a dynamic, cohesive, personalized, and engaging experience wherever they engage with your brand. Composable commerce also empowers brands to:
- Create comprehensive omnichannel experiences,
- Avoid vendor lock-in,
- Reduce operational costs,
- Reduce the IT budget as vendors take care of maintaining and upgrading their systems,
- Deliver differentiated, personalized experiences across all touchpoints.
Elements of composable commerce
Composable commerce emerges as a transformative approach in redefining ecommerce operations and order management by integrating flexibility, modularity, and customer-centric experiences.
Picture composable commerce as a sophisticated Lego set, where each building block, or software component, can be carefully selected and assembled according to your specific needs. The fundamental elements of composable commerce are:
This is also known as the “MACH” architecture. Unlike traditional monolith software applications that are a bundle of functionalities, composable commerce divides them into microservices. These can be individually integrated into your ecommerce ecosystem through APIs.
This is what makes it possible to pay only for the services you use, as well as scale and adapt to deliver unique customer journeys and experiences. The cloud is essential, ensuring that microservices and APIs can scale to meet demand.
Having those elements enables you to compose your system out of modules from different vendors, like:
The process of order management from start to finish
Order management in ecommerce is like a relay race, where every handoff must be seamless for the finish to be strong.
- The race kicks off the moment a customer hits 'Order Now' on your website or app.
- This baton is then passed to an Order Management System (OMS), which works like a tactical coordinator. It calculates, deciding from which 'sourcing unit' (a warehouse, a store, etc) the product should be picked.
- Once the playbook is set, the OMS fires a release message to the designated source.
- The warehouse responds, providing real-time statuses like "ready to ship" or "shipped."
- Next, your last-mile delivery comes into play. The final sprinter in your relay, often handed off to logistics operators who collaborate with courier services to cross the finish line, delivering the product to your customer.
- If the customer wants to send the product back, we enter the return lifecycle cycle, another loop in the race. A return order is created against the initial sales order and goes through its own journey, either returning to the warehouse or to a store.
The race doesn’t end there. The order management system is also your inventory scout and cost optimizer. It keeps an eye on stock levels, and even manages shipping costs and methods. It can also send out invoices. In a nutshell, order management is the beating heart of your ecommerce operation.
The issue with traditional order management
When it comes to order management in ecommerce, the stakes are high. If you're still clinging to legacy systems, you might be risking operational hiccups. Think of order management as the backstage director of a Broadway show – if it's out of sync, the entire performance falls flat.
Outdated systems can't keep up with real-time demands. Say your website shows a product is in stock, but in reality, it's already sold out. This can easily happen when your order management system isn't communicating in real time with your front-end channels. Imagine the frustration of a customer who thinks they've scored the last item, only to find out it's already gone.
The issue here is latency. Traditional order management systems often batch-update inventory data, rather than real-time syncing. This is where composable commerce comes into play. It can make your systems talk to each other like they're in a seamless, ongoing conversation. Without it, you may end up propagating delays, eroding trust, and ultimately driving customers away.
It's not just about speed, it's about accuracy and adaptability. Order management isn't just a backend function, it's the backbone of customer experience, and that backbone should be as agile as possible considering the rapid modern pace of ecommerce.
For some companies, transitioning into composable commerce might be necessary just to keep operations going. That’s because ERP vendors, like SAP, are stopping support for their on-premise apps. This leaves managers with a tough choice.
They can either extend their existing, outdated ERP systems or take on the high cost and risk of a complete migration. This situation has elevated the importance of having a truly composable system.
Implementing a composable OMS, like Fluent, can de-risk these ERP decisions. It offers flexible deployment and migration options that are tailored to specific use cases, unlike the many-month-long, one-size-fits-all projects that traditional monolithic systems enforce.
Thanks to composable commerce, order management can be flexible:
- Instead of being tethered to a singular, rigid system, businesses can employ APIs or an API gateway to connect to microservices and develop orchestrations on the API gateway.
- This facilitates dynamic and real-time adjustments in the supply chain and inventory based on events and data analytics.
- Through data-driven and event-driven architectures, personalization initiatives can be infused into the order management process, such as providing alternative sourcing suggestions when a product is out of stock or recommending services based on customer history.
Ultimately, composable commerce fosters a holistic, interconnected, and customer-oriented ecommerce operation, embodying a fundamental evolution in the industry.
Enabling seamless order management
Imagine your ecommerce business as a high-performance car. Seamless order management is the turbocharged engine that makes everything run smoother, faster, and more efficiently. Let's dive into why you'd want to invest in such an engine for your business:
- Improved customer experience - direct the customer journey so precisely that every click, every interaction feels intuitive and satisfying. Happy customers are loyal customers.
- Automation - during peak seasons or unforeseen events, robots order management automatically scales to meet demand.
- Low operational costs - pay only for what you use, keeping your budget lean.
- Composability - no vendor lock-in, you can adapt, scale, and grow business capabilities with ease.
There are two perspectives to enabling seamless order management. One is internal optimization, and the other – external capabilities.
Internally, think of upgrading your tech stack as renovating a vintage car. You might still be running on a legacy system (or monolith), but that doesn't mean you can't add some horsepower, for example:
- Invest in your integration platform,
- Update your protocols,
- Create a data hub that serves as your centralized command center, pushing real-time updates to all your channels, letting your data flow freely across your whole ecosystem.
Externally, composable commerce lets you plug-and-play different vendors like LEGO blocks. You get to be the architect, focusing on capabilities that provide immediate benefits. You can also easily test the waters with prototypes of new features.
For instance, try a new inventory service from a vendor on a specific market. Scale it up or shut it down based on performance. You can test-drive different vendors in an efficient, scalable, and future-proof way.
To enable this, the cloud is essential. It’s not just about scale and flexibility, but it also comes with built-in support structures, courtesy of cloud providers and their robust service-level agreements.
For your business to thrive, your data must flow freely and be as reliable as a Swiss watch. Whether you choose to polish your existing systems or branch out with external capabilities, the key lies in movement. Just like money has to keep circulating to grow, your data has to keep moving to keep your store growing.
Reliable and fast order management = satisfied customers
Ready to turbocharge your ecommerce operations? Transitioning to composable commerce isn't just an upgrade. It's a strategic pivot towards agility and customer-centricity. Take control, curate your tech stack, and deliver an exceptional customer experience at every touchpoint.
This is a guest post by Vipendra Singh, who is in charge of Digital Solutions at Pandora, the world's largest jewellery brand. To learn more about composable commerce and retail innovation, reach out to Vipendra on Linkedin or contact Netguru’s retail experts.