Today‘s consumers buy their desired products and services via various channels – stores, online shops, marketplaces and social media. At the same time, their expectations are shaped by major players such as Amazon – customers want a seamless, personalized and „in-time“ shopping and fulfillment experience across all channels, which can be realized through intelligent order routing. Retailers can achieve these benefits by implementing a Distributed Order Management System (DOMS). In this third part of our blog series about DOMS, I will elaborate on the specific benefits a DOMS brings for retailers.

Read the first part of our blog series about the difference between traditional OMS, Next Gen OMS and DOMS here and the second part on how Order Routing solves complex challenges here!

Which benefits does DOMS offer for retailers?

Improved customer satisfaction

DOMS empowers retailers to offer their customers an exceptional shopping experience on all channels. The broad service portfolio includes real-time availability displays in the online store, fast order processing, services for individual product design and various delivery options such as Quick Commerce and Click & Collect. These features are highly valued by customers, providing retailers with a competitive edge by optimizing the customer journey.

Increased sales

Satisfied customers purchase more frequently and in bigger basket sizes. An omnichannel approach significantly impacts buying behavior: Omnichannel customers spend an average of 14% more money compared to single-channel shoppers (Harvard Business Review). An omnichannel presence also has an impact on loyalty, showing further benefits of DOMS. Multi-channel users are 23% more likely to also visit a store (Harvard Business Review).

Higher conversion rates

By increasing the availability of stock for online sales and displaying real-time availability, delivery options and delivery times in the online store, retailers can boost sales and reduce order cancellations due to stock shortages.

Reducing return rates

With DOMS, retailers can provide their customers with detailed information about availability and deliveries before they buy the products, enabling informed purchase decisions. This reduces return rates. The Click & Collect or Click & Reserve option allows customers to view, test, or try on products before completing their purchase.

Flexibility and efficiency through decentralized warehousing

By decentralizing logistic functions across multiple locations, retailers enjoy the benefit of greater flexibility when it comes to order fulfillment. They can serve their customers not only from a central warehouse, but from an entire network, which enables faster deliveries, including same-day or next-day deliveries. This approach also helps reduce their ecological footprint and avoid deliveries across national borders by sending orders from closer locations, for example from brick-and-mortar stores. Additionally, the flexible design of the logistics network makes it easier to expand into other countries, allowing retailers to start with small test stores instead of committing to a large warehouse from the outset.

Better stock distribution

By connecting online and offline channels and integrating stores and dropshippers into the fulfillment network, the entire inventory becomes accessible. This minimizes the risk of items being out of stock. With inter-branch transfer, products can also be moved between stores for Click & Collect, making it easier to provide them to customers. Overstocks can also be reduced by configuring the routing rules accordingly, allowing seasonal goods to be sold at optimal margins and dealing with demand peaks. This enables retailers to better plan their storage capacities and increase profitability.

Leverage existing employee idle time and resources

Especially store employees are not always working at full capacity, for example during off peak hours. By integrating online and offline channels, retailers can use this capacity to fulfill online orders (ship-from-store), thereby increasing the store’s profitability without overburdening staff.

Higher profitability through automated processes

Our DOMS provides beneits through automated, efficient fulfillment processes, reducing costs for manual activities and minimizing errors. With intelligent, AI-driven algorithms, the DOMS performs complex calculations that surpass human capabilities.

Modern technology

With our MACH architecture, an intuitive user interface and the simple and fast integration options in any system, retailers achieve a fast go-to-market strategy, automated processes and swift responses to market changes using our DOMS. The system offers simple scaling options and adapts flexibly to a company’s growth. This gives retailers time to concentrate on their core business.

Which benefits does DOMS offer for retailers?

How DOMS improves sales

Retailers and brands can expect benefits in their online store conversion rate by making more inventory available for online sales. While the exact increase varies by industry, target audience and customer experience, research and case studies indicate an overall improvement of 15% to 40%. This is because missing items often lead to shopping cart abandonment. Globally, the average shopping cart abandonment rate is around 70% (Adloca), with product unavailability being a major reason for this, along with a lack of information in the checkout process. DOMS enables the full product availability for online sales, significantly reducing this abandonment rate. Customers who experience full product availability are more likely to return, which can increase long-term conversion rates and customer lifetime value (CLV). Higher availability encourages customers to buy additional items, especially if their first choice is in stock. This can lead to an increase in the average order value (AOV). Collectively, these effects contribute to higher sales. With DOMS, for example, a fashion retailer with an annual turnover of €100 million can increase the typical conversion rate of 2% (Statista) by 20%, raising it to 2.4%. This enhancement translates to an additional €20 million in sales.

How DOMS reduces delivery costs

DOMS leverages well-defined rules and AI-driven optimization algorithms to identify the most cost-effective delivery options, among other factors. Let’s assume a retailer has an annual order volume of one million orders. DOMS can determine a fulfillment option that saves an average of 20% on delivery costs. Let’s assume an average shipping cost of €6.99 per parcel. By determining the cheapest shipping option, DOMS can save an average of €1.39 (20%) on delivery costs per order. With an order volume of one million orders per year, this results in a total savings of €1,390,000.