Retailers today are under immense pressure. With ever-changing customer expectations, decreasing attention spans, customer loyalty as solid as air, old technology holding them back from change and innovation, and new technology popping up every week. Each crisis seems to replace the last, and I can feel the frustration and experience the doubts in their minds every day.
My focus is on helping companies improve the process from when an order is placed in a sales channel, to the point where the customer has the product in their hands. This is often a neglected aspect of the customer journey. Typically, too much effort is spent on winning orders rather than efficiently fulfilling them.
Over the decade, retailers have increased the number of sales channels (online, stores, marketplaces, apps, social etc). There are also more places where orders are delivered from. It can be central warehouses, smaller local warehouses/hubs, physical stores, dark stores, direct delivery from suppliers (dropship) and more. Furthermore, customers now have heightened expectations with regard to the delivery options available, for example click & collect, home delivery, delivery to pick up points, etc. This results in an ecosystem characterized by extreme complexity.
This requires a flexible way to orchestrate the order process and logics that you want to provide. I observe that the traditional legacy systems fall short of meeting the required standards. The ERP system is too rigid and involves too much customization to meet the needs. The e-commerce platform often lacks this support completely, which leads to a large development cost. They’re great systems when you use them for the purposes they’re built for, but they’re not built for the rapidly increasing complexity of managing orders.
In the past few years, the demand for a dedicated system, specifically designed to handle these processes, has increased rapidly. These systems are collectively referred to as Distributed Order Management (DOM) which can be seen as an Order Management System (OMS) on steroids.
The purpose of a DOM-system is to streamline and optimize the entire process of delivering customer orders for retailers, brands and e-commerce businesses. A clear benefit is huge internal cost savings as you can operate more efficiently. But as important are the opportunities to deliver customer experience with precision on inventory, proactive communication on order-status and avoiding over- and underselling.
Having a specialized system for order management and orchestration fits well into the last years development towards a composable setup of technologies and softwares. A modern retailer needs flexibility to cope with speed and complexity. MACH (Microservice, API-first, Cloud Native and Headless) and Composable have become the “new thing”, but what is it really?
Embracing MACH Principles to create flexibility.
Your technology stack, designed for the modern digital commerce ecosystem, needs to be closely aligned with the MACH architecture, ensuring your business is equipped for today and tomorrow.
Microservices
Your architecture needs to be designed for flexibility, allowing you to customize your digital commerce environment to fit your needs perfectly. By breaking down functionalities into services, integration becomes seamless, ensuring your setup is optimized for efficient and adaptable operations.
API-first
Integrations need to be seamless. A robust API layer facilitates easy connections and extensions, allowing for a flexible and scalable commerce ecosystem that can rapidly adapt to changing business needs and customer expectations.
Cloud-native
Picking cloud-native solutions ensures scalability, reliability, and cost-efficiency, allowing your business to adapt and grow without the constraints of traditional IT infrastructure.
Headless Commerce
And finally, you should fully embrace the principles of headless commerce, ensuring flexibility for both minor integrations and major overhaul, allowing you to effortlessly adapt to evolving customer demands, without getting bogged down by backend complexities.
Selecting the right pieces is a strategic choice.
Selecting the different pieces in your technology stack is a thoughtful step towards enhancing your digital commerce capabilities. It’s about embracing systems that align with the evolving needs of the market. Your approach, inspired by the MACH principles, should focus on providing your business with the resilience, speed, and efficiency essential for today’s digital landscape.
An adoption of MACH architecture brings to your business the essential advantages of modern digital commerce—scalability, flexibility, resilience, speed, and cost efficiency. With MACH, your architecture ensures your operations can effortlessly scale to meet demand, innovate rapidly with agile development, and maintain high uptime through robust infrastructure. This approach not only accelerates deployment and testing but also significantly lowers the necessity for heavy investments in physical resources.
Bringing it back to a high level it is to find specialized systems that is extremely good at doing what they are built for, for example:
- CMS for handling your content.
- E-commerce engine for e-commerce.
- PIM for Product Information Management.
- Loyalty system for customers (CDP, Marketing Automation)
- DOM/OMS for managing orders.
- An Experience Data Platform to collect and distribute data.
One thing is for sure: I still haven’t seen a system that can provide a retailer with all these pieces in one place. Some claim they can accomplish it, but the result is mediocrity as no one can be the best in everything. As long as you choose systems that are open and API-driven you can more easily mix and match. It also gives you freedom to easily replace systems down the road if you start small and need to scale as your business grows.