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Congratulations, an order has been placed! Now you need to process and deliver it, which is not a simple task.
Let’s first look at the order processing from a customer perspective, then discuss the main points for the backend implementation.
In the Checkout section of the course, we stopped on the Order Confirmation page.
The next step is to send an order confirmation email. Unlike a promotional email that targets a group, this transactional email is sent directly to one customer in response to an action they’ve taken. These emails are sent to registered and guest customers and offer an excellent opportunity to follow-up with them.
The email verifies necessary information, such as who made the purchase, what was purchased, and how much it cost. It can also confirm a reservation, appointment, subscription, or some other type of service that you are providing.
An order confirmation indicates an online transaction was successful and gives your customer peace of mind.
Let’s look at Zalando’s transactional order confirmation email. It contains:
Here is another example—the email sent by Airbnb to confirm a reservation. The company provides all the vital details, including the time and date, check-in time, address, reservation code, and the amount to be paid. Link to Airbnb site allows viewing or changing the reservation, and there is information about the host and how to contact him. Also, Airbnb provides essential information about the house rules and how to contact customer support. There is a call to action to participate in the referral program and cross-sell offering of popular tourist activities at the destination. To learn more about Referral programs, go to the “Promotions” section of the canvas:
It is best to keep a balance between brevity and friendliness in an email confirmation. Here is a list of the essential transaction details to be included:
Recurring orders require a notification email before the order is to be placed. Here is an example of the email from Dollar Shave Club in which it notifies a customer about upcoming order and gives an option to add new items before the order is shipped.
Receiving the order offers an excellent opportunity for establishing a closer relationship with the customer by asking for feedback.
With most customers saying online reviews impact their purchasing decisions, only half of them write reviews. They need additional motivation to invest their time in doing it. Merchants need to integrate the “Leave a Review” message into Post-Purchase communications and give customers some tangible value in exchange, for example, by offering a discount on the next purchase or entering them into a drawing.
In this example, Hollister offers an opportunity to enter a draw to win a $100 gift card.
Post-order communication is a not-to-be-missed opportunity to generate additional revenue and offer customers other products that they can be interested in. Personalized offers work the best. B2C business can also ask customers to share their purchase on social media, follow up the company on Instagram or Facebook, or signup for a newsletter. See the Promotion section for different incentives that can be offered to achieve this.
Customers should have the ability to manage their past orders. Under the “My Account” area of the site, it is common to find the “My Orders” section. Here customers can review what has been purchased, print receipts, ask for a return, or repeat an order.
For regular customers, especially in B2B, the list of orders could be long. You will need to implement the ability to search for orders that contain specific products and filter orders by date when they were placed.
The order detail page lists products included in the order and offers a customer interface to cancel the order or initiate the return process. Most cancelations happen in the next 30 minutes after placing the order. If the cancelations rate is high in your industry, it will be prudent to implement a waiting period between placing an order and starting to process it.
Please note that in many cases, it is not enough to show the overall order status, and you may also display the status per order item.
Whether we like it or not, the rate of returns and cancelations is quite high in Ecommerce, especially in consumer goods and fashion categories. Making cancelation and return policies clear and transparent builds trust and lets a buyer place the order without fear. Despite its importance, the research has found that the return processes cause most usability issues.
Clearly specifying steps in the return process and the next step to take, as shown in the examples here, removes confusion, reduces support cost, and develops customer loyalty. If some products cannot be returned, it should be specified in the return policy and on the order details page.
To simplify the return process, a digital commerce site needs to implement a simple method of selecting items to return from a past order, request confirmation, receive approval, print return slip, and send goods back.
Recurring business drives a substantial portion of the revenue, especially in a B2B company. You need to make reordering as simple as possible. Customers may want to reorder the entire order or just some items from it.
For consumables, repeating the last order should be offered as a one-click option. Nespresso provides a convenient way to reorder and allows a customer to convert previous order into the recurring one.
We have examined the customer’s view on order placement. Now let’s discuss what happens in the backend of the digital commerce system. Order processing is a complex process that needs to be designed carefully in each Ecommerce implementation. It involves managing payments, fraud prevention, picking and packing, in-store collection, drop shipment, reserving and updating stock, tracking delivery, as well as synchronization with sometimes multiple ERP, OMS, CRM, and other systems.
The diagram below shows a simplified “happy path” of order processing.
The customer places an order, and after successful payment, it is sent to a warehouse, where it is picked, packed, loaded on a truck, and delivered.
For most businesses, order processing is much more complicated. In addition to the “happy path,” the process needs to handle returns and cancellations, refunds, customer service, and replacements. Businesses can also have multiple sales and delivery channels. If this is the case for your business, you must carefully consider how digital commerce fits into established business practices and processes.
It is essential to decide which backend systems will be responsible for order fulfillment. You have three options: Ecommerce System, Enterprise Resource Planner (ERP), or a dedicated Order Management System (OMS).
Every Ecommerce system comes with built-in order management functionality, and it can be sufficient for some businesses who manage orders exclusively on their own e-commerce domain. It should work fine for small to medium businesses when all orders are placed in an online shop, and your website is closely tied with your fulfillment process and inventory management.
However, if a business has multiple channels, suppliers, and delivery partners, the chances are that it needs a more robust system for managing orders.
The next option to consider is ERP. Suppose you are an existing retail business that adds a digital channel or a manufacturer that wants to sell directly to consumers. In that case, the chances are that you already have an ERP with some order management capabilities.
For small-volume retailers with a less complicated distribution network, an ERP approach might sufficiently meet most business requirements either through standard capabilities or custom workarounds.
While this approach can be cheaper initially, it brings some challenges.
However, ERPs are expensive to implement and manage. Additionally, they lack innovative order management capabilities like omnichannel support, advanced routing, multiple payment options, automation, loyalty, etc.
While ERPs can be customized, most companies are reluctant to change their ERP system, as it is the source of financial records. Meeting evolving customers’ expectations with ERP as an order management system could be a challenge.
Your third option is to use a dedicated order management system (OMS) that complements your ERP functionality. It serves as the single source of truth for order and real-time fulfillment data while remaining agnostic enough to integrate and/or communicate with your other systems easily. If your business takes orders from many different places: marketplaces, website, POS / in-store, phone orders, and fulfills orders from many different warehouses or suppliers, OMS is the way to go.
Order management systems tie your commerce tools and customer experience together. It facilitates all processes—from Storefront to the front door and automates the receiving, routing, fulfilling, tracking, notifying, (and potentially returning/exchanging) of orders.
OMS supports an omnichannel strategy, which means offering online orders with in-store pickup or home delivery, as well as a hotline or click-to-chat feature to inquire about the order status and any other conceivable combination between the “online” and “offline” worlds.
OMS acts as a central hub for order orchestration and update. Ecommerce System uses OMS to check on inventory availability. When an order is placed, OMS performs order routing between warehouses and other fulfillment locations. It manages order pickup and dispatches it for delivery by one of the carriers. When an order has been shipped, it tracks order status and updates ERP.
OMS is a central point to monitor real-time order status and product inventory levels at all locations.
With more than 30% of all products purchased online being returned, returns are an unavoidable part of selling online. You need to decide how your commerce operations will handle returns. While some shops allow returns of any products, no questions asked, others require customers to obtain return authorization before sending goods back, and some businesses don’t accept returns at all.
We have already discussed the customer experience part of the return. Now let’s see how the process looks from the merchant’s perspective. This diagram shows the necessary steps for the return process.
RMA stands for Return Merchandise Authorization.
The business should also be able to manage more complex cases, including warranty replacement and exchange.
Click & Collect, a buzzword that has been around for some time, is about starting a purchase online and picking it up in a store. While the concept is straightforward to grasp, implementation could be quite challenging.
Stores become mini-warehouses, which means new tasks for staff members: receiving package deliveries or order requests and preparing them.
A robust order management solution combined with store fulfillment can turn store networks into a strategic ecommerce asset. Ship-from Store, for example, creates virtual distribution centers across a retailer’s network of physical locations. It leverages store assets to fulfill ecommerce orders, minimize out-of-stock situations, and reduce delivery times and expense.
Order picking is done in a retail location instead of a warehouse, and a carrier picks up the prepared package from a store. The Order Management System should adjust the number of orders sent to each store to avoid overburdening them.
There are now many options for implementing Click & Collect. In addition to their retail locations, merchants use self-service lockers, convenient stores, offices of delivery providers (DHL, PostOffices), and curbside pickups. B2B buyers who have their own logistics can collect their orders directly from the seller’s warehouse.
The omnichannel approach to order fulfillment is extending to returns as well. All major retailers encourage Buy Online, Return In-Store (BORIS). BORIS cuts out the cost of return shipping completely, both for the merchant and the customer. It also offers another benefit for the retailer — it brings customers into stores and creates a perfect opportunity to upsell or cross-sell them on additional purchases.
Retailers can turn returners into shoppers!
E-commerce is reshaping the physical store, and new innovative models are evolving to accommodate changing customer preferences.
Finnish postal and logistics company Posti developed PostiBox. It is a self-service post that combines fitting rooms and hospitality elements alongside lockers, unboxing stations, and recycling points.
Many of us were in a situation when you pick up your order, get home, open a parcel, only to realize that the shirt your ordered is too small or does not look good on you.
Posti Box reinvents this entire process with the idea of an efficient pickup point with a room full of parcel lockers. Posti Box also incorporates a fitting room for people to try their purchases on immediately and customer-service elements. After parcels have been collected, unpacked, and their contents tried on or tested, packaging can be disposed of at a dedicated recycling station.
DHL has also tested the same concept in the Netherlands and Belgian company Bpost.
For sellers, the Posti Box has also created a Spotlight area to be used by online companies to showcase their products.
If your business sells services, your digital commerce system will not need these complex OMS implementations required to ship physical goods.
But that does not mean you don’t have the order fulfillment process. You do. You may be selling SaaS plans or insurance policies, ride-sharing, or travel packages. There are steps you need to implement to process an order and provision the service in all cases.
Payment needs to be authorized, accounts created, access granted, tickets issued and delivered, ride-sharing enabled, and so on.
During all these steps, customers need to receive order confirmation, order status updates emails, and check their service status in the My Account section.
Customers need to see billing history, receive a receipt after each billing cycle, and be notified about service renewal or credit card expiration for services billed on a recurring basis.
You need to think through the order fulfillment process to ensure a great customer experience.
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