Growing Your Business with Order Management in the Cloud

Feb 26, 2013 8:36 AM  By

Small to medium-size multichannel merchants are operating in a business environment that is vastly different from even a few years ago. Consumers have an abundance of information at their fingertips and can interact with businesses through many different channels.

As a result, retailers need to operate across multiple channels as efficiently as possible while finding new ways to differentiate themselves. Small to medium-size retailers, in particular, face pivotal decisions for their businesses in 2013, such as how to grow online sales as efficiently as possible, while still providing the ideal customer experience and growing overall revenue.

Unlike big-box retailers, small merchants do not have the luxury of absorbing costs that may occur in the order management process, so they must focus on improving efficiency and solving the potential road blocks that are standing in the way of experiencing double-digit growth. In a 2012 report, industry analyst firm Aberdeen Group reported a number of solutions that greatly enhance a small to medium-size business’ ability to succeed. Topping the list is Order Management, which is used by 86% of best-in-class SMBs.

Additionally, the proliferation of the cloud has helped usher in the next generation of order and inventory management that’s paving the way for SMB retailers to increase growth. As SMB retail merchants evaluate the benefits of the cloud for their order management process, they need to focus on three critical components in order to grow their business while improving the bottom line and satisfying the needs of their customers including: managing inventory across multiple channels, accelerating growth with improved marketing and delivering great customer service.

Managing inventory across multiple channels
Today’s business environment enables even the smallest of retailers to reach a market of millions. Selling through multiple channels offers retailers the opportunity to increase sales and, at the same time, significantly complicates inventory management and other key business processes. Order management in the cloud greatly enhances visibility into each stock item’s quantity and availability, which is critical to effectively forecasting demand and maintaining healthy business operations.

SMBs need to be able to track inventory across all channels, such as a web store, as well as Amazon, popular third-party ecommerce software such as Magento, offsite fulfillment centers and other shopping channels. The last thing an SMB needs is to have too much inventory on hand and too few orders coming in, leading to reduced margins.

Excessive inventory ties up cash that could have been re-invested into the business to help it drive additional revenue. At the same time, not having enough inventory on hand results in backorders, cancellations, negative social buzz and, potentially, lost customers. It’s a balancing act and an issue every company faces. The cloud helps companies to more quickly adapt, in near real-time to inventory fluctuations, keeping each channel running smoothly.

Accelerating growth with improved marketing
One of the biggest and most overlooked opportunities for SMB retailers to grow their business is to better focus target marketing efforts and expand market visibility across channels. If retailers are not effectively marketing to their existing customer base, they are missing one of the biggest opportunities to grow their business. This means that the customer list is one of a SMBs most valuable assets, and retailers can unleash its value by doing the following across each channel:

· Segmenting the customer base to compare and contrast purchasing behavior.
· Tracking results of specific campaigns and promotion programs.
· Generating lists of customers by specific categories to integrate with the email marketing system.

The cloud delivers a scalable way to integrate marketing efforts across all sales channels and customer profiles. It does so by tying the back-office to the front-office, improving how and where small businesses utilize sometimes limited resources to help grow their business.

Delivering great customer service
It costs five times more for companies to earn a new customer than to retain an existing one. In today’s world, customers can interact with a business from anywhere at any time and through multiple channels. Whether the customer interaction occurs in person, over the phone or online, delivering excellent customer service is a key ingredient in developing and nurturing customer satisfaction, customer retention and ultimately repeat business through loyalty. The key to managing customer interactions effectively is having agile, scalable back-end business processes.

Cloud order management provides anywhere and anytime access to critical business information, improving the ability to not only meet customer needs, but anticipate them. Three questions every SMB retail merchant should be able to answer about its ability to provide top customer service include:

· Does my business have the tools to provide visibility into my customers’ orders across all channels?
· Does my business have a customer service team in place that can use these tools to quickly respond to customer enquiries and engage them?
· Do I have the ability to view the status of an order online or am I able to access information in real-time?

It only takes one poor customer experience to produce countless lost customers due to negative reviews and posts online. For an SMB, outstanding customer service can be a differentiator.

Fred Lizza is CEO of Dydacomp.