Many young brands launch their businesses on Shopify, and for good reason! Shopify allows business owners to cheaply and swiftly create an eCommerce storefront to begin building a client base and fulfilling orders. However, as these businesses mature and expand into new channels, they often face a multitude of challenges, particularly related to order management.
Shopify's order management system lacks the real-time inventory, order, and return management capabilities that most established businesses require in today’s competitive retail environment. Without real-time visibility and availability across channels and locations, brands struggle to fulfill orders and keep up with rising customer expectations.
In this blog, we will discuss the top challenges that Shopify merchants face with the order management system and how to overcome those to ensure your commerce technology.
One thing is clear, particularly as industry staples continue to close their doors during the so-called “retail apocalypse” (exacerbated, no doubt, by the ongoing global pandemic): brands must re-design customer experiences to reduce the barriers between the physical and digital worlds and remove friction in the customer journey. Unfortunately, Shopify does not provide retailers with the tools necessary to provide this sophisticated customer experience.
Lack of Inventory Synchronization and Back-Order Management
Shopify’s order management system does not allow for real-time inventory visibility across both online and offline channels, which often means that brands take orders online and have to cancel them due to stock shortages. Shopify’s lack of inventory synchronization capabilities across multiple channels ultimately means frustrated customers and unnecessary manual processes to ensure accurate inventory reporting.
To make matters worse, Shopify does not track when products are going to be restocked, so when a customer calls, your customer service team cannot provide them with an expected delivery date. Since Shopify does not manage backorders, your customer service representatives also cannot help customers when they call in to inquire about the status of their order, since they have no visibility into whether the order is being routed, picked up, packed, or shipped.
Return Management Challenges
Returns are an expected and inevitable part of the eCommerce buying process. Studies show that eCommerce businesses typically experience a 20-30% return rate, and customers expect to get a refund almost immediately. In fact, 91% of shoppers say they check a website’s return policy before they ever make a purchase. However, Shopify offers only a basic return process relying on manual workflows, inefficient tracking, and poor record management. As a result, customers can expect to wait as long as 10-15 days to get their money back.
Shopify’s nominal refunds & exchanges support means that when a customer calls in to make a refund request, your team has to manually look up the order, validate the return policy, create a return ticket, and generate a shipping label. Once returns are received in the warehouse, your team can finally initiate the refund process in Shopify and close the support ticket. If the returned item is not damaged, the customer service team is responsible for manually restocking the item in Shopify for resale. As your business experiences a growing number of orders and returns, you can expect these processes to take hundreds of hours, hurt customer relationships, and damage your profit margin.
Loss of Sale
Now more than ever, it’s important to save the sale whenever possible instead of pushing your customers into the loving and eager embrace of your competition.
High Delivery Costs and Lack of Fast Delivery
Shipping an order placed on the west coast from an east coast warehouse can be expensive. To cut down on delivery costs and offer next-day delivery to customers, retailers might choose to fulfill online orders from a store or a warehouse near the customer’s shipping address. Shopify manages inventory across multiple locations but it doesn't allow you to select the closest warehouse to the customer's location. As a result, customers are saddled with high delivery costs and long delivery timelines. While this delivery system may have been sufficient in the past, it certainly won’t cut it in today’s want-it-now retail environment. If you aren’t already, you can expect to lose precious sales to competitors that have invested in a sophisticated order management system.
Email Me When Available
When products are out of stock, brands want to capture the customer’s interest so that they can be notified as soon as the item is available. Shopify allows you to add a form to your product details page for customers to fill out if they’d like to be notified by email when an out-of-stock item is back. Unfortunately, this process is largely manual and inefficient. Brands must constantly check for items (due to a lack of real-time inventory visibility) in order to execute the sale as quickly as possible. This process is time-consuming, leaves room for human error, and often leads to a loss of sale as customers get tired of waiting.
If you’re only handling a handful of orders a day, Shopify is the tool for you. Brands can print each order and use it as a packing slip, generating a shipping label one order at a time, which is a great place for a young brand to start. However, once your company matures and begins fulfilling hundreds or thousands of orders a day, this manual process is infuriatingly time-consuming and error-prone. It’s not uncommon for large Shopify brands to ship the wrong item to a customer, resulting in a sour customer experience and even longer delivery timelines. Once you develop a solid customer base and expand to multiple sales channels, it’s imperative that you invest in a sophisticated order management system that eliminates manual errors, accelerates the fulfillment process, and delights your customers.
What's A Brand To Do?
You might be reading this blog, nodding your head to some of the challenges above, and wondering: “what’s a brand to do?” Clearly, real-time inventory visibility and availability across multiple sales channels is a must for the seamless shopping experience your customers demand. Is there a way to actually achieve this without a rip-and-replace? Fortunately, there absolutely is! In fact, there are two ways you can approach your order management transformation.
The Shopify ecosystem offers multiple apps to overcome the challenges discussed in this blog. While these can be effective, brands should be warned that integrating numerous apps can add layers of complexity to your online store that are challenging in their own right. It’s important to understand that many apps can cause conflicts with Shopify themes or the Shopify platform itself. Most apps offer one or two features, which are effective in terms of improving the shopping experience, but can quickly strain the business when it comes to wider operations. A lot of Shopify apps slow down your Shopify store.
Pre-integrated Distributed Order Management System with Shopify
The more sophisticated approach to improving your shopping experience is to partner with an enterprise-grade order management system that integrates with your Shopify platform. Best-in-class order management systems come with built-in features to overcome all of the challenges discussed in this blog, without the added headache of dealing with multiple vendors or slowing down your Shopify store.
Features of Pre-integrated Distributed Order Management System with Shopify
- Real-time inventory visibility across the supply chain
- Online order routing based on proximity and inventory availability
- In-store and warehouse fulfillment tools for picking, packing, and shipment
- Store inventory management
- Buy-Online Pick-Up In-Store tools for in-store pickup
- Endless aisle
- Return management
- Order Splitting
- Backorders and pre-orders
- Amazon & marketplace integration
- ERP integration
Business Benefits of Pre-integrated Distributed Order Management System with Shopify
- Increase the customer lifetime value
- Reduce delivery time and cost
- Increase store traffic and conversions
- Save the sale
- Increase average order value
- Save on integration costs
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Shopify is a fantastic platform to rapidly and successfully launch your eCommerce business. But growing brands need a Distributed Order Management system in place to overcome the growth and management challenges of Shopify order management system outlined in this blog.
If you’ve been looking for ways to enhance your order management processes, set up time with the HotWax Commerce team of experts to learn how our platform integrates with Shopify to compliment your existing business.