What Is Order Management?

From a customer’s perspective, few moments in the shopping journey top the excitement of receiving an order. It all starts right after you click the Buy Button: You track your items with anticipation and follow along with every shipping update until a last-mile delivery driver drops it off at your doorstep. (Insert happy dance here.)

Order management is what makes this entire process possible — from order confirmation to shipping to much-anticipated fulfillment. It involves all the steps necessary to get items safely from a company’s warehouse into the hands of customers.

Order management can make or break a brand’s relationship with shoppers. The right strategies and systems can help you build customer loyalty, increase efficiency, and improve revenue streams. Here’s everything you need to know about how it works.

Order management is everything that happens after checkout. And an order management system is what controls all the downstream operational processes, people, systems, and partnerships that help fulfill orders. It’s a platform for managing orders, customer records, fulfillment, inventory visibility, payments and invoicing, and customer care.

Customers expect a lot when it comes to the post-purchase experience. Free shipping, simple and/or free returns, and sustainable business practices are all factors that make shoppers more likely to buy from a brand. They also want complete transparency about the status of their order, including its current location, its expected arrival time, and details about any problems in transit. The right order management system makes it easy to meet these expectations.

The customer experience doesn’t end at payment. The speed, transparency, and simplicity of fulfillment are key to customer satisfaction and loyalty. Get the post-purchase experience right and customers will reward you by placing more orders — but a sub-par experience can result in customer churn. Most consumers say they would stop buying items from a retailer after just one poor delivery experience.

Here’s where to focus your efforts — and make a few cost-effective tweaks — to provide a stellar order management experience that drives loyalty and brand love.

Offer flexible shipping/delivery options

Customers demand flexibility in shipping and delivery – from one-hour and weekend delivery to in-store pickup. Be upfront about your ability to meet these expectations. Display the options you provide on each product page clearly so customers know what you offer before they check out.

Provide accurate product availability information, including location

Don’t disappoint and frustrate your customers with an out-of-stock notification after they’ve added an item to their cart. For business buyers, time is money, and any minute spent shopping for unavailable merchandise is wasted. If a product is out of stock or running low, indicate this on the product page so customers are aware. Inventory management capabilities built into your order management system can help automate this process and avoid hiccups.

Offer self-service order status and returns

Customers are naturally curious about their orders, so give them the ability to check order status and receive updates via text or email. To avoid snafus, make it easy to edit shipping details after customers have placed an order. Returns, too, should be self-serve, allowing customers to easily print return labels and choose how and where to return items. Self-service gives shoppers more control over their experience and helps you lower costs associated with service and support.

Empower service agents and sales reps

Service agents and sales reps are on the front lines of the customer experience. They need to help customers with their orders and make the entire interaction feel seamless. This requires the right tools to reduce call handling time, increase efficiency, and give reps complete visibility into orders. Technology should help them place orders on behalf of customers and make shipping and delivery changes to existing orders, when necessary. This is a proven growth strategy: Thirty-eight percent of digital leaders say customer service drives a substantial amount of incremental revenue.

Use AI and automation to create efficiency

Manual processes for managing inventory, order routing, status monitoring, and returns management quickly become unpractical. The good news? The best order management systems come with AI tools that automate these tasks. In fact, one third of organizations have completely automated the tasks of order status monitoring and reporting.

Order management systems used to be relegated to the back office, typically within the logistics division of a company. But that doesn’t work in a customer-centric economy where order management is so central to the overall customer experience.

All the work that brands put in throughout the customer relationship management (CRM) lifecycle — awareness, marketing, site experience, consideration, acquisition, conversion, and more — leads to this one moment. If companies fail to deliver on their end of the value exchange (money for goods and services rendered), does anything else that came before really matter? Order management systems must deliver on that brand promise.

After a customer clicks the Buy button, an intricate dance begins to carry out the order. Storefronts may interact with as many as 39 different systems to complete this part of the customer journey. The most common types of systems are tax, payment, fraud, inventory management, accounting, enterprise resource planning (ERP), and shipping. Here’s what should happen during an effective order management process:

A customer places an order, and inventory counts are updated.

When it comes to inventory management, a clear view helps you optimize storage space, forecast demand effectively, and save money. You’ll be able to avoid costly mistakes like out-of-stocks, overstocks, mis-picks, and mis-shipments. This also increases the chances you can keep shelves stocked at the right capacity and deliver goods quickly and correctly.

The order is picked, packed, and routed to its destination.

Can customers expect standard shipping, or will their order be routed to a warehouse for customization? For special orders, a team may need instructions to build a personalized product by hand. The right order management system will help you take all of this into account and efficiently manage the flow of goods across your entire supply chain.

The product gets delivered

This final step of the order management process is known as last-mile delivery. With a flexible, integrated order management system, your last-mile fulfillment is quick, reliable, and transparent. You can even use this step to trigger new marketing efforts. For example, when a customer receives the new sofa they ordered, you can send them a personalized email suggesting matching end tables or chairs.

Order management isn’t just about processing orders. It integrates customer-facing systems that affect the post-purchase experience including ERP, CRM, sales, service, and commerce. Order management systems make everything available and accessible to all stakeholders in a unified platform.

With a flexible, integrated order management system built to support omni-channel journeys at a global scale, you’ll have all the tools you need to become more successful and keep customers coming back for more. Customers expect a smooth post-purchase experience, and these strategies will help you deliver.