Guest Column | February 10, 2022

How e-Commerce Complexity Can Work To Your Advantage

By Nicola Kinsella, Fluent Commerce

eCommerce Retail Tech

Ecommerce used to be simple: one website that took credit card payments and shipped orders from a single distribution center. But those days are long gone. Complexity abounds.

From fulfillment methods such as Click & Collect/BOPIS and Ship from Store, to the addition of Drop Ship Vendors and social selling, not to mention the remix happening right now in payments, there’s no shortage of complexity in today’s retail. Regardless of how daunting the e-commerce landscape is, challenge is always met with opportunity. Retailers can gain control over their inventory and workflows in a way that will stand the test of time.

Buy Now, Pay Later & Crypto

There is a plethora of alternative payment methods available to consumers today. PayPal, Google Wallet, and Apple Pay might initially come to mind, but it goes beyond that. A remix on traditional consumer credit is shaking up the retail industry, and it’s caught the attention of major brands and financial institutions alike.

As inflation rises, and with it, credit card interest rates, more consumers are seeking alternative forms of credit. The Buy Now, Pay Later (BNPL) microloan option allows people to make a purchase and receive it immediately, but pay for it in installments over time. The BNPL is particularly popular among younger generations, with more than half saying they have bought a product on social media using BNPL. Not much different from what older generations would refer to as a layaway option, the BNPL market experienced a surge in popularity during the pandemic as more people, including those who had lost their jobs during the shutdown, began shopping for goods entirely online.

Block (formerly Square) recently acquired Afterpay, one of the key players in the BNPL space. The Australian company was sold for $29 billion, making it the largest acquisition in the BNPL industry. Not only does Block have extensive reach within the SMB retailer space, it plans to integrate Afterpay with Block’s Cash App, which has a staggering 40 million monthly active users. With this type of attention and momentum, BNPL looks destined to take on both Venmo and big credit card players alike.

Another shake-up to traditional payment methods is cryptocurrency. While some brands have been accepting crypto as a payment option for some time—namely, Microsoft Xbox, Nordstrom, Gamestop, Whole Foods, Crate & Barrel, and, more recently, PacSun—others are struggling to understand what a non-traditional payment option such as crypto means for their business.

Order Processing & Fulfilment

As we approach the second anniversary of the pandemic, many retailers are reflecting on the drastic changes their online order volume experienced. Their ability to scale fulfillment operations became ever more important in the face of, not only a global pandemic but a consequential global supply chain disruption several months later. Scaling fulfillment likely meant adding more stock locations like distribution centers or drop-ship vendors, more channels like marketplaces, or even online stores in a new region. Whether it’s new fulfillment locations, new sales channels, or new payment methods, one thing is stood out: how retailers process orders have to change. Today, there are more steps to complete, more integrations to support, and more exceptions to consider. What’s more, the requirements for each continue to evolve, and it’s not just the order process that’s impacted. When fulfillment operations reach a certain level of complexity, there must be a way to manage them intently and adaptably.

Don’t Forget About Returns

More than 30% of all products ordered online are returned. There is no questioning how important it is for online retailers to optimize the customer return process to build brand reputation. Retailers must manage quality checks before restocking and selling inventory and must do it quickly. They must understand the reverse logistics of their supply chain and be able to put products back on the shelf as soon as possible to protect the bottom line. But how does that process work in such a complex e-commerce ecosystem? With the rising popularity of BNPL payment options and the increase in direct-to-consumer (D2C) fulfillment models, there are a lot of questions to be answered. For instance, what happens if a customer uses a BNPL payment option but has only made two payments out of four? Does that trigger a different process than if they paid in full up-front? And what is the returns process for crypto payments?

While complexity can be a challenge, there are systems designed to help retailers manage it with ease. In fact, these rising complexities can actually be a competitive advantage when approached correctly. For starters, it’s important for retailers to take control of their inventory in each sales channel and to stay adaptable throughout the payment, processing, and return processes. A flexible Order Management System (OMS)—one that lets businesses adapt quickly—is essential to close the gap. An OMS also can be used to trigger manual processes like fraud checks or events in other systems. A distributed order management system automates exceptions so that retailers can manage all of the different workflows for different types of orders and returns to keep their e-commerce operations humming.

About The Author

Nicola Kinsella is SVP Global Marketing for Fluent Commerce.