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omnichannel order management

3 Reasons to Offer Order Splitting, and How to Do It Right

by Aditya Patel |
3 Reasons to Offer Order Splitting, and How to Do It Right

Modern customers want order delivery to be as fast and convenient as possible. We’ve all been there: adding items to our online shopping cart with the full intention of buying them, only to abandon the cart once the high shipping cost is displayed at check-out. More and more, we’re seeing businesses accelerate the adoption of omnichannel retailing strategies to provide convenience and speed to their customers: opening new stores, repurposing existing locations, or converting stores into fulfillment and pick-up locations. 51% of retailers now offer same-day delivery, and 49% of shoppers claim that same-day delivery makes them more likely to shop. 

However, there are still certain situations where retailers cannot make good on their promise of lightning-fast delivery and easy fulfillment. While these scenarios are unavoidable in omnichannel retailing, properly managing these situations can help ensure the customer's shopping experience is not ruined. 

If a customer places an order for multiple items, some might be back-ordered while the rest are in stock. In this case, retailers have two choices:

  • Break the order into multiple shipments and deliver the in-stock items now
  • Wait for the outstanding inventory to arrive and send all the items in the order together.

Many retailers prefer not to break orders into multiple shipments because it doubles the cost of fulfillment. However, retailers who prioritize customer experience over fulfillment costs should opt to split the order into multiple shipments and deliver them as soon as possible. This process of splitting an order into multiple shipments so that customers do not have to wait for all the items to be in stock is called order splitting. And while the strategy seems expensive in the short run, it yields a better customer experience and more loyal customers in the long run. 

In this blog, we will walk you through how to successfully manage order splitting, and why you need an order management system to create the most efficient process. Let’s begin by breaking down some scenarios in which order splitting is needed.

1.  Mixed Carts

Mixed carts refer to orders that contain some items for store pick-up and others for home delivery. They often contain items that are shipped in separate shipments due to either of the following scenarios

Case 1: A customer places a BOPIS order and a regular order in the same cart.

In this case, customers choose to pick up part of their order from the store and want the rest of it to be delivered to their home. Since all of these items cannot be fulfilled from a single location, orders must be split.  

Case 2: A customer places a pre-order and regular order in the same cart. 

In this case, customers may place an order that contains both in-stock and out-of-stock (but expected to arrive soon) products. This means a part of the order can be fulfilled now and the rest when the pre-order inventory is back in stock. Some retailers prefer fulfilling the whole order at once, but this means longer wait times for your customers. 

2. Out-of-Stock Items at a Single Fulfillment Location

When there are multiple items in an order, there is a chance that not all of them are present at one single fulfillment location. Thus, these products must be shipped from multiple locations, which will require thoughtful order splitting to minimize the fulfillment costs and ensure the entire order is delivered efficiently.

For example, say a customer places an order for six shirts. Six shirts might not be present at one fulfillment location, but they may be available across three locations. Let’s say that Chicago has four shirts, Los Angeles has one shirt, and Houston has one shirt. To fulfill the order quickly, the retailer should leverage split shipments and split the order across the three locations.

But retailers should optimize split shipments by separating orders into the smallest number of shipments possible. Continuing the examples discussed above, if the retailer has two other locations, namely Philadelphia and Washington, each with three shirts in stock, the order should be split into two shipments and shipped from these two locations rather than three above. This minimizes the costs associated with split shipments. Without a dynamic order management system, this process can be costly, time-consuming, and full of headaches. 

3. Multiple Customer Delivery Locations

In some instances, customers may place a single order with different delivery locations for different line items. For example, a customer may place an order containing a gift item (to be delivered at the gift receiver’s address) with an item the customer wants to be delivered to their own address. In this case, the order will need to be split into multiple shipments and shipped separately to two delivery locations, even if the fulfillment location is the same

 

Key Considerations for Order Splitting

Order splitting must be executed efficiently or you risk high costs, overcomplication, and a poor customer experience. 

Knowing this, do not split orders with dependent products. Dependent products refer to the products that are rendered useless in the absence of a certain part, feature, or another product. 

For example, we recently had a conversation with a digital camera retailer. They shared that when a customer places an order for a camera, the camera and the lens are added as two different line items in one single order. It wouldn’t make sense to split these two items, because a lens is useless without its camera. A flexible order management system should be able to intelligently identify dependent products and keep them together. This provides a better customer experience and increases customer satisfaction at a lower cost.

Your order management system should further minimize order splitting costs by shipping the maximum number of line items from one fulfillment location.  

Optimizing split shipments helps:

  • Support sustainability and reduce your carbon footprint.
  • Provide a better customer experience as customers won’t receive a confusing or overwhelming number of packages. 
  • Reduce your shipping and fulfillment costs and increase long-run profit margins. 

One of the most critical factors in successful order splitting is customer communications. To provide the most seamless customer experience, your customers should get real-time updates with detailed information on when they can expect to receive each item in their order. In doing so, you’re managing expectations and increasing customer satisfaction.

Conclusion

Operationally, managing a large number of unique orders each day can quickly become very complicated. 

Let’s say you receive 500 online orders per day. To figure out which orders need to be split, you will need to manually review each order, check inventory, identify inventory across locations, and determine the most efficient shipment split. A process like this could take hours (or days!) with countless opportunities for error, causing delayed shipments, an increased number of errors, higher costs, and a poor customer experience. A robust omnichannel order management system automates this entire process, avoiding these challenges and driving customer satisfaction. 

HotWax Commerce Order Management System uses its smart order routing logic to read every order coming through a retailer’s eCommerce system and identifies which orders can be fulfilled from one location and which orders need to be split. For all split shipments, the OMS will find out the optimal  (speedy & low-cost) fulfillment location that orders should be shipped from.

Our mission is to help merchants increase profitability, cash flow, and customer retention with seamless omnichannel order management. We work with retailers to provide the best return on their inventory through omnichannel retailing strategies such as same-day BOPIS, Ship From Store, and pre-order management. Contact our team for a free consultation to learn more about our dynamic solution.

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