Omnichannel orders: A spotlight on splits!
A split order consists of, as the name suggests, splitting the same omnichannel customer order into several packages. The order can be shipped from more than one stock location if the requested items are not in the same place.
Interview of Vincent Vila, Chief Product Officer at OneStock
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How do splits work for omnichannel orders?
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Splits are directly linked to stock allocation! The implementation of a unified stock and, by extension, making the entire stock available for sale involves making splits. The way it works is simple: when a customer order is placed, store stock is displayed alongside warehouse stock. If no stock point has all the products needed to fulfil the order, the OMS will split it according to the orchestration rules previously established by the retailer.
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Why do retailers want to limit splits as much as possible?
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Often for budgetary reasons! Splits lead to additional preparation costs in-store and/or in the warehouses and increase transport costs, which in turn reduce margins.
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Why might splits still be advantageous in certain circumstances?
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Each order should not be considered individually. Instead, the overall mass of orders and the average split rate should be analysed. When you do this analysis, you realise that splits don’t have the negative impact you could expect! Another important benefit is customer satisfaction. Thanks to order splits, items that might not have been available to customers otherwise can now be delivered.
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What role does the OMS play in this configuration?
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The OMS takes control of the number of splits and orchestrates the order so as to limit the number of packages as much as possible, even if that means not serving the entire order if it is determined that there are too many!
Our recommendation as an omnichannel solutions provider is that splits should not necessarily be limited, provided that the stock range is homogeneous throughout the network (shops and warehouses).
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What variables will determine the number of splits?
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Brand strategies for splits are customisable. We would recommend starting with simple rules and doing a profitability study a few months after the implementation of the OMS.
We have found that the optimal number of splits varies according to six main variables, all of which are important: the uniformity of the assortment in the network, the product margin, transport costs, the average basket size, the basket index and seasonality.
With regards to seasonality, there are, for example, more splits during clearance sales to empty store stock. In this case, it is better to sell products at reduced margins than to sell via an outlet!
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What advice would you give to an omnichannel retailer?
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Always put the customer first! Customers are not always used to receiving several packages for their order. As there is a chance they will receive a parcel before the others, they might think their order is incomplete. As such, they must be informed of the split and communication with the customer must be faultless!
OneStock provides the customer with reassuring messages about the contents of each package and the remaining delivery time. The Delivery Promise module also allows the retailer to notify a customer in advance that their order will potentially be fulfilled in several packages. This module also allows retailers to indicate the date at which the entire order will be delivered. It is recommended that this information be indicated on delivery notes.
In short: Remember to have an overall perspective on splits rather than focusing on individual cases and always keep the customer well informed!
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