Modern retail brands need flexibility, scalability, and the ability to tailor solutions to their needs. There’s a lot of pressure to exceed customer expectations, expand into new channels and new markets, and grow business, and after several years of COVID-influenced upheaval and facing the headwinds of an uncertain global economy, those pressures are amplified. Out-of-the-box solutions rarely satisfy the competing demands retailers face, so as they weigh the potential return on investment of one option against the opportunity costs of another, more and more are turning to composable commerce.
Composable commerce allows retail and commerce brands to combine best-in-breed tools in an integrated tech stack custom-built for their business. It’s an inherently complex ecosystem, which means deciding where to start (or continue) investing can be daunting for digital leaders who need to prove results — fast — in a squeezed fiscal setting. With so many options, deciding where you’ll get the most bang for your buck is crucial.
I spend a lot of time at Orium helping clients think through their road maps for success. While each business is unique, there are two technologies I believe every retail brand can benefit from today: an order management system (OMS) and a customer data platform (CDP). In a modern retail setting, it’s critical to understand and plan around your data to set your brand up for long-term success. These two solutions enable you to do just that.
The Two Titans of Transformation
Two components that can make or break your ability to leverage a composable architecture and offer a true omnichannel experience to your customers are one, your OMS and, two, your CDP. Despite the seemingly endless discussion about data in the world, for most brands it’s still treated as an afterthought, handled by a secondary team within the digital commerce branch. But in a modern retail environment, this is antiquated thinking — and it will inhibit your ability to truly operationalize your best-in-breed tooling to its full potential.
Simply put, your OMS is how you store, organize and make data available within your business’s back-end function. Your CDP is how you operationalize that data to provide a personalized and convenient shopping experience for your customers. They’re the twin elements that can supercharge your omnichannel operations when implemented correctly, and drive value for years to come.
Order Management System (OMS)
An OMS is the primary operational tool for any established retail business. It enables retailers to quickly process orders and transit them to the appropriate fulfillment location, provide accurate inventory reports, and ensure that the order management process operates efficiently and at scale. The OMS touches every team, from merchandising to warehousing and all pods in between.
Retailers need real-time insights into their supply in order to deliver accurate data internally and externally. A fully matured and integrated OMS:
- provides autonomy between teams responsible for inventory accuracy, availability, and customer satisfaction, including real-time stock for high-traffic events and in-store and online connectivity;
- enables customers to accurately and confidently interact with their order after they’ve paid and receive accurate updates as it’s processed (note: this seems like table stakes but many retailers still can’t do this, and it drastically impacts return rates);
- provides accurate delivery times to the customer automatically; and
- enables curbside/in-store pickups in tight time windows — customer expectation is now one hour from order to pickup, but most retailers are still reporting a two-day delivery on BOPIS orders.
With an OMS correctly implemented and fully integrated, your team has total inventory oversight that enables better customer service and improves customer experiences by helping streamline order management, product fulfillment and delivery.
Customer Data Platform (CDP)
Customer data goes beyond an individual’s personal details (e.g., name, address, payment information) to provide meaningful insight into their experience and preferences as a whole. The right customer data shows you their path(s) to purchase, their preferences, the price points they shop within, times of day they’re most active, best conversion methods, and frequency of engagement, just to name a few. A CDP makes that data accessible and usable for your brand.
A CDP takes the data we typically find scattered and siloed throughout an organization and consolidates it so it can power a retailer's choices on how the brand interacts with shoppers. A fully mature and integrated CDP:
- allows marketers to build a single unified view of individual customers, and group them accordingly;
- enables targeted ad spend to improve conversion;
- personalizes the shopping experience for your customers;
- provides autonomy to a retailer’s marketing team, decoupling needs from IT support; and
- leverages data points mastered by the OMS to operationalize sales, discounts and strategies based on real-time stock and inventory availability.
Connecting the Data
When working within a large retail brand, the team evaluating and implementing an OMS is often completely disconnected from the team that selects and integrates a CDP. But when we look at where retailers — pressed for results with tight budgets and lofty expectations — can see the best ROI, it’s not just in implementing a CDP or an OMS. The real power is to work across business units in the early stages of adopting this tooling to understand how the data in your OMS can feed into the customer’s journey powered by a CDP.
For example, the OMS will house the order status updates, and your CDP can ingest this data to provide personalized notifications to the customer on order status, lowering the rate of returns. When implemented effectively, the back-end data layer and the front-end customer journey are woven together with the proper modern platforms, empowering the retailer to target customers with accuracy with each interaction. Suddenly you’ve unlocked not just a portion of a customer journey or retail operations, but the full end-to-end experience.
The pressure is on, and success in today’s retail environment requires a dynamic approach to creating and managing customer journeys and operations. A composable commerce architecture can equip brands with the flexibility to build out the solutions that make the most sense for them and adjust quickly as the landscape shifts. There are countless potential paths to success, but the key to unlocking the full potential of a modern retail approach is with a fully integrated OMS and CDP operating in lock-step to bring your operations and experience in line with one another. Seamless interactions are possible, but only if you take hold of your data.
Becky Parisotto is the vice president of commerce at Orium, a composable commerce consultancy and systems integrator.
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Becky Parisotto is the vice president of digital programs at Orium, a composable commerce consultancy and systems integrator.