Replacement or acquiring a new order management system is a daunting task – how do you resolve and arrive at a decision. System project teams within a retail company are the best option to arrive and there is no limitation on the time frames which can vary depending on the complexity of the requirement. However when it comes to evaluating potential solutions, there are some standard steps which a marketer and retailer can follow:
System objectives and priorities
Managing increased capacity, improving customer service online and offline, business methods like continuity shipping, processing costs to be lowered, inventory efficiency are some of the reasons for acquiring a new order management system. It’s always important to prioritize the goals well before choice of the alternatives so that the processing is made easier.
Operations and budgets
As retailers and marketers need to spell out how the order management system should serve business requirements in a formal and comprehensive functional method.
RFP to provide analysis
Besides the results of the functional needs, the RFP should also provide: requests to vendors to indicate if they can meet your requirement, length of time it would take and also support from out of the box functions. Listing of all your hardware, networks, and explanation of how your retail business works, if there are any third party processors are all equally important to be included in the RFP list. Read more
There are several factors which govern the success or failure of any loyalty program and retailers are always trying their best to ensure the marketing strategies do not include them. Sometimes not having an accurate target will translate to not gaining true customers. This might result in defecting patterns in the customer lifecycle and so to overcome this, you need to make sure that the loyalty programs are affordable, multi-usable across different brand outlets of the same retailer and give unique benefits like free shipping.
Some common strategies are:
• Rewards every time. Continuous reinforcement strategies work to create loyalty programs that rewards customers every time they make a purchase, like free shipping or low prices every day, once a week or any another time-bound date.
• Fixed and variable rewards. Sometimes retailers reward customers who have shopped more than 5 times during the same week, or month. A different way of approaching this is that customers get an option to win either of the above options, which is similar to a lottery.
• Interval rewards. Retailers sometimes reward customers who shop during the first week of a month. Another way is deploying a rewards system for a certain time period either for the week or month to keep customers shopping and guessing at whether or not they will reap a reward for their purchase. Unexpected rewards are the most memorable.
Gift cards are successful at increasing sales because when people actually use the cards they tend to spend a greater amount than what is on the card. If they use a $50 gift card towards a $75 purchase, their reasoning for surpassing the card’s amount is that they only had to spend $25 out of their pocket for $75 worth of product(s). Even though the purchaser is buying a specific dollar amount for the gift card, gift cards actually motivate people to spend more than the amount on it.
Because it has been so popular, customers are astutely aware of retailers offering a gift card option, and are now visiting the store and/or site with the sole intention of purchasing one. Since they are purchasing a gift card for somebody else, curiosity often gets the best of them and they naturally browse around the site or store for themselves. Upon checkout, they buy the gift card in addition to the items they found while browsing.
In retail stores, gift cards are typically displayed at the counter, right next to the register. They often serve to remind people that the need to buy someone a gift, and subsequently buying a gift card right there on the spot. This is called an impulse buy—a purchase that was not planned, but you cannot resist picking up. It is like the candy and magazine section at the grocery store checkout aisles where all of a sudden you find yourself needing that chocolate bar. Impulse buys can drive up sales significantly because everyone at one point in their life has the urge or need to buy a gift on the fly, and gift cards removes the effort in searching for one.
Reviews are the most recognized way of gathering feedback from customers and experts for a particular product or service. Through reviews, customers talk to each other, thereby giving the retailer a tremendous amount of insight into the reception, positioning and performance of the product. Reviews are much better than a focus group, as the people involved are not getting paid for it, and thus have better credibility and respect inside he social community.
But for ecommerce websites, displaying reviews is like handling a double-edged sword. You cannot filter out all the hostile reviews. Removing all the negative reviews does more harm than keeping them on the site as it undermines the purpose of the review and sharing process. Adopting this approach will result in a loss of trust in the website in the long run.
Yet, you cannot include all the negative reviews since that may seriously damage the brand value of the product and even the website as well. This may lead to a dip in sales and even a deterioration of relations with your manufacturers and suppliers. Therefore striking a balance between the two types of reviews often determines the fate of the product and the fate of the ecommerce website.
Here are some best practices to keep in mind while handling the reviews:
- Allow any type of reviews to be posted governed by a fair degree of freedom which has constraints like profanity, not to mention competitor names and a customer has to buy the product to review the same
- Allow customers to flag reviews which they think is not justified. This ensures that the retailer can take a look at the particular review and decide, thereby reducing the effort to screen the reviews.
- Merchants should make sure that in the website, only those products which the customer is passionate about, gets included in the user reviews and feedback section.
- Merchants also should ensure that they do not edit the reviews for grammar and brevity. The language and prose reveals a lot about the reviewer, thereby enabling the readers to identify and associate themselves with the reviewer. This means that even spelling errors – if any – on the review should be left as it is, since it tells something about the person who has written the review.
Following these can go a long way in making your reviews section a happening and engaging place for your customer community.
There are different steps in order fulfillment process, which involves not only order placing but also returns and exchanges. The next section deals with the different challenges that are encountered in fulfillment and some possible solutions.
The following are the steps in order placing. Keep in mind that this is about eCommerce sites and not traditional order fulfillment processes.
- Order is placed on eCommerce site.
- Payment for the order is cleared.
- Warehouse receives the order.
- Packing slips get printed
- Pickers pick the product.
- Arrange shipments.
- Packages are shipped to customers.
In the above steps the picker can only pick if the product is available in the warehouse. This brings in the process of inventory management as a precursor for successfully completing the steps off the order place scenario. Arranging the shipments and shipping the products also brings the logistics of shipping and business processes like agreements with the shippers, and insurance against lost product into warehouse management. Some of the organizations have a separate department that deals with loss prevention.
The fulfillment process also has to take care of returns. This process is initiated by the customer when the customer returns the product they received. The following are the steps involved in processing returns:
- Returned package is received in the warehouse.
- The product is returned to its location in the warehouse.
- Initiate payment return process.
- Log the reason for return.
It is imperative that we log the reasons for the return of any product. You will see in the later sections as to why this plays an important role. The reason for returns could be because of “Damaged Package”, “Item Defective”, “Poor Service”, “Poor Quality”, “Not as Expected”, “Undeliverable”, “Wrong Item Sent”.
The exchange process is basically a combination of returns process and order place. The item that was returned goes through the regular returns process and the exchanged item is placed as a new order. It is a business decision as to how the payment will be handled. The most commonly seen method is to use the refunded amount and charge the customer for the difference.
Consumers everywhere want to have control over their shopping experience, and not experience any pressure from online salespeople. They want room to shop and decide at their own pace how they would like to add, delete or modify their basket items. Even the slightest interference through online sales push initiatives may irritate them. For retailers to be effective in merchandising, marketers need to understand this behavior.
Here are some tips for this:
1. Do Not Force Sell
Some retailers try to push un-popular products onto consumers. The natural reason for this would be overstock or fewer sales. But instead of creating a sales spike, this action may drive away even new users. Marketers therefore should be careful if they choose to market these products at all.
2. Show the Best Offer Upfront
Marketers should know that whenever they hide a good offer behind a bad offer, they are not doing any justice to their sales. Not only does the user get turned away from the former, but the retailer also loses the chance of sale for the latter.
3. Dare to be Different
Promote personalization with each customer in a different way. If a customer has bought shoes for the first time, marketers should identify and strategize ways to sell other accessories, which would go well with the initial purchase of the product, like socks, watch, handbags, etc.
4. Dynamic Landing Pages
Retailers can take advantage of building a specially merchandized result page, which is used to promote a brand when people are searching for the brand or even the product category.
5. Virtual Shopping
Since the web gives more flexibility to present a product to the consumer, retailers should find creative ways to encompass the same. Products which can be shown in detail should be shown so that the consumer gets a real time feel.
Neuhauser will speak at the upcoming Internet Retailer Conference & Expo, which is being held at Chicago’s McCormick Center from June 5-8, 2012. The company is sponsoring this year’s Internet Retailer Top 500 Guide giveaway, which will include the Echo Rank’s top 100 rankings. The inaugural Echo Rank contains some surprising results, including a stellar performance for Office Depot, which ranks at #28, far above leading competitors OfficeMax and Staples, which are both ranked in the 300s. Read more
Early in the dot-com era, a lot of companies set-up their online presence for failure because they did not think through all the processes involved in fulfillment. Most companies that were successful were the ones that already had a catalog business. The reason for their success was because of a well-established fulfillment system. You have to understand that when dealing with fulfillment systems, you also deal with the logistics of shipping, maintaining inventory, procuring, etc. The companies that failed did not realize this importance.
Let’s look at the different parts of a warehouse/fulfillment system. You now have a well maintained eCommerce site. This site is accepting orders from customers. Now that you have the orders in the system it is important to ship it to them (fulfill). Only after fulfilling an order can we collect the funds from our customers. This presents the first problem that needs to be solved. The solution of this problem is the first piece of the fulfillment system, i.e. the communication channel between the eCommerce site and the warehouse/fulfillment center. Once the channel has been established the second thing that you need to think about is the protocol of communication between the eCommerce site and the warehouse. The third piece of the puzzle is the warehouse itself. For managing a successful and profitable warehouse is to manage not only the space but also the flow of products once they have been picked to where they have been packed and loaded to be shipped. To do all of these aforementioned tasks there are systems designed by companies like Manhattan Associates, Sterling Commerce, RedPrairie, etc. To complete the fulfillment system is the final piece of the puzzle, the backend accounting processes. Read more