In our increasingly digital world, pre-orders have never been as effective for eCommerce businesses as they are today. The power of social media trends paired with the accelerated changes in consumer preferences have increased the demand for pre-orders and just-in-time production. In 2019, McKinsey predicted that made-to-order and pre-order models would go mainstream, and their prediction has undoubtedly proven true.
A pre-orderable product is an item that hasn’t yet been released or is currently out of stock that retailers can ship to the customer once available. Pre-order capability boosts DTC sales and helps retailers achieve profitability by eliminating excess stock. Overproduction is costly to retailers, but it’s also costly to the environment: nearly 20% of all the clothing items that are produced remain unsold, left to be sold at a discounted price or dumped in a landfill.
Most DTC brands on Shopify are offering pre-orders using the apps available on Shopify or Shopify Plus. These apps work well on a small scale, but Shopify pre-orders become very complex when merchandisers are dealing with a large number of products and variance in their delivery schedules. Shopify pre-order management requires manual inputs that take a lot of time and leave room for errors.
A good order management system (OMS) helps optimize the fulfillment workflow, streamlining the process for the merchandiser and ultimately providing a better customer experience. But with all of the OMS options in the retail industry, it can be difficult to choose the most suitable one to meet your pre-order management needs. In this blog, we discuss the critical capabilities that a merchandiser must assess before choosing an OMS that will provide a seamless pre-order experience to their customers.
1. Automated listing and delisting of pre-order products
When using pre-orders on Shopify, it is the merchandiser’s job to manually mark products to “continue selling when out of stock.” Using the pre-order apps on Shopify, they can list these products in the admin panel, which swaps the “Add to cart” button with a “Pre-order” button for out-of-stock items. From that point forward, it is the merchandiser's responsibility to track how much inventory is on order and how much of it has been consumed by pre-orders. They must also manually delist products from pre-orders, so the “Pre-order” button is switched to the “Sold Out” button and they don’t over-promise their inventory.
For retail brands offering pre-orders on Shopify for several products, managing this manual process of listing and delisting can be incredibly time-consuming and difficult. A good OMS should automate the entire process, including:
- Checking current inventory levels
- Fetching the PO and Advanced Shipment Notification Data from the ERP to analyze which products qualify for pre-order
- Automatically listing eligible pre-order products on Shopify when physical inventory runs out but more inventory is ordered
Automation streamlines the pre-order process and helps avoid the over-promising or under-promising on inventory that can happen with Shopify pre-order management, which is a big win for your customer experience.
2. Setting accurate customer expectations
Your OMS should help you easily provide a smooth, informative shopping experience to your customers. One important piece of information to communicate to shoppers directly on the Product Detail Page (PDP) is the ETA (Expected Time of Arrival). This sets accurate customer expectations and avoids scenarios that leave customers disappointed with the delivery experience.
When using pre-orders on Shopify, merchandisers are expected to manually enter the estimated delivery date for pre-ordered products on the admin panel of the Shopify App. This process involves:
- Gathering PO/Advanced Shipment Notification data from the ERP to get inbound shipment dates
- Adding lead time to the inbound shipment date that yields the expected delivery dates for customers
- Calculating expected delivery dates for large product assortments and uploading them on the Shopify App
That’s a lot of work! Instead, your order management system should do the heavy lifting of calculating the expected delivery date and displaying it on the Product Detail Page.
Furthermore, your OMS should automatically communicate any changes in ETA. Sometimes supplier shipments are delayed and failure to communicate such changes to customers results in a poor customer experience and, often, “appeasement” discounts from the customer support team. Checking the changes in delivery dates and communicating them to the customers requires a lot of manual effort on the part of retailers. Your OMS should be able to track the delays in supplier shipments and automate the process of communicating these updates to the customer.
3. Streamlined pre-order product allocation
Using pre-orders on Shopify often results in complicated, time-consuming reallocation processes for merchandisers when more inventory is ordered or pre-orders are cancelled.
Adding new purchase orders is common for retailers if they have upped their production plan or placed an order set to arrive before their existing purchase orders. But when this happens, they are forced to manually re-allocate all existing pre-orders in the pipeline and update customers with new promise dates. Failure to do so will allocate the first-available inventory to customers who purchased their order after loyal customers who had previously placed pre-orders. How unfair to your faithful customers! A streamlined OMS eliminates this messy process and automatically corrects orders so they remain on a first-come, first-serve basis.
Similarly, canceled pre-orders can cause a complex, time-consuming reallocation process. Merchandisers must manually recalculate the updated promise date for new orders after every few cancellations, to ensure they don’t undersell their inventory. A capable OMS should automatically make these adjustments to avoid human error and save time.
4. Automatic fulfillment of pre-orders
Once a segment of inventory is allocated to pre-orders, it must be assigned to a warehouse for fulfillment. For smaller retail brands with only one warehouse, this is a simple process.
However, large brands with multiple fulfillment centers must decide which location should fulfill the order. Your OMS should be capable of automatically routing the orders to the optimal fulfillment location based on location proximity and inventory quantity. Automating this process with an intelligent OMS ensures the efficient fulfillment of pre-ordered items and better customer service.
Your order management platform should also facilitate the optimal allocation of inventory between open pre-orders and stores. Retailers often want some available inventory shipped directly to stores to be sold on day one, instead of waiting for pre-orders to be shipped. Your OMS should easily let you specify the quantity of inventory that should be released for pre-orders by product or by order item.
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There are several apps in the Shopify ecosystem that allow retailers to offer pre-orders on Shopify to their customers. These apps are adequate for very small brands with few products, but fall short for retailers with a large assortment of pre-order products.
In order to successfully launch pre-orders on Shopify, you need to be able to automatically list products for pre-order when inventory is available, efficiently process pre-orders on a first-in, first-out basis, and deliver an excellent customer experience with accurate shipping dates.
HotWax Commerce’s Order Management System for Shopify has all of these critical capabilities to ensure your pre-order operation runs smoothly and serves your customers well. Request a consultation with the HotWax Commerce team of experts to learn how we can optimize your Shopify pre-order management strategy.