Today‘s consumers buy their desired products and services via various channels – stores, online shops, marketplaces and social media. At the same time, their expectations are shaped by major players such as Amazon – customers want a seamless, personalized and „in-time“ shopping and fulfillment experience across all channels, which can be realized through intelligent order routing. With the right Routing Strategy, which is part of the Distributed Order Management System (DOMS), retailers can effectively meet these requirements. In this fourth part of our blog series about DOMS, I will explain how an advanced Routing Strategy helps retailers in complex environments.

Read the first part of our blog series about the difference between traditional OMS, Next Gen OMS and DOMS here!

The benefits of an advanced Routing Strategy

In very complex environments, creating a single rule set is often insufficient in order to handle the complexity and satisfactorily cover the use case at hand. Therefore, retailers need a Routing Engine that allows them to set up different context-specific routing sets. The items in a customer order are then either divided into different rule sets or assigned to a specific rule set as a whole. DOMS uses the properties of an order, or the items ordered to identify which rule set is to be applied. Creating different rule sets can be advantageous for different use cases such as:

• A customer’s order includes items that require different handling, for example dangerous goods and parcel shipping (see below for a description of the use case).
• Different rule sets are needed for orders from different countries, for example from Germany and the USA.
• Part of the order is handled differently if an additional service, such as engraving or assembly, has been booked.
• Orders are placed via marketplaces where special rules apply (see below for a description of the use case).
• There are individual requirements for special items such as bulky or hazardous goods.
• Customers are specially categorized by the retailer and treated differently, for example VIP customers.

Routing Strategy in Action: Covering mixed shopping baskets

A customer orders a hammer and a gas cartridge for their camping trip from the online store of a DIY store. The hammer is sent as a parcel, while the gas cartridge requires hazardous goods transportation. Additionally, the order is split between different delivery sources since the items are only available at different locations. The hammer is shipped from the warehouse, while the gas cartridge is delivered via dropshipper. The challenge is to route the order in such a way that minimizes the process costs, ensures the customer receives the products conveniently and quickly, and guarantees that the individual components of the order are delivered in quick succession.

The distribution of the hammer and the gas cartridge to different sources within the network requires different rule sets for the shipment of dangerous goods and parcel goods. For the delivery of the gas cartridge, the distance between the shipping location and the customer’s address directly influences the price, which is not the case for parcel deliveries. To act cost-efficiently, different rule sets for the fulfillment of the two products must be applied to the sources of supply.

Marketplace Routing Strategy: Navigating Order Allocations

Selling items via marketplaces like Amazon or Zalando helps retailers to attract new customers who might not have otherwise discovered their products. However, selling via marketplaces can also pose challenges, especially in case retailers choose to handle order fulfillment themselves rather than delegating it to the third-party provider. This approach allows retailers to maintain control over their inventory and their margins.

Marketplaces often have very specific fulfillment requirements that may not be as relevant for orders placed via the retailer’s own online store. Using the DOMS, retailers can set up a separate set of rules for each marketplace to meet the specific requirements. For example, fast shipping is an important requirement for Amazon. In this case, the rule set should guarantee the fastest possible shipping. For example, orders via Amazon can be preferentially routed to warehouse locations with later cut-off times or those closest to a carrier branch to achieve faster delivery.