The unsung heroes of eCommerce are the ones who make products more affordable, get them to the customer on time, "make it right" when things go wrong, and drive cash through the order to the balance sheet.
A disproportionate amount of attention is paid to the eCommerce discipline of marketing; i.e. things that happen before an order is created. Demand generation and conversion are sexy and quantifiable, but it's everything that happens after the buy box that drives customer loyalty.
The back-office superheroes of eCommerce are:
- Financial and Logistics Operations (FinLo)
- Order Management
- Order to Cash
- Contact Center Management
Let's dive into these unsexy jobs that we all depend on.
Financial and Logistics Operations
FinLo, the portmanteau of Finance and Logistics, is the Bennifer of eCom. They're more interdependent than any other of the disciplines, and especially in digitally savvy organizations, they rely on each other for continued success.
The COO and CFO have their work cut out for them in a digital commerce business. Balancing profitability is tricky when you're peddling physical goods. The mere act of making a product requires an investment into inventory, which is trickier the earlier the stage of business you're in. Data is required to make strategic bets on inventory positions, and the more you optimize the more dependent you become on those bets being right more than they're wrong.
For financial roles, negotiating terms is a volume game: the more volume you can commit to a vendor, the more favorable of terms you can negotiate. In this way, finance is highly dependent on marketing and demand gen for its ability to forecast.
How a product gets delivered, returned, and returned to stock is one small piece of the puzzle. Add in B2B concerns for an omnichannel business and your pains just doubled.
Customer loyalty has more to do with shipping and logistics than it does with points and rewards tiers. If it takes three weeks for a product to arrive on the doorstep, it doesn't matter how great your rewards program is, the customer is less likely to buy again. The promise of receiving 3X points cannot make up for a long delivery cycle.
The role of the order management professional is to account for all orders, and make sure they're shipped complete, or otherwise triaged for missing and substitute items. Modern order management uses a fair bit of automation to speed up the job but edge cases always arrive that require human intervention.
Order management, then, becomes a critical and often overlooked role for the eCommerce business. The daily duties of an order management professional include:
- Spotting outlier orders and monitoring for fraud
- Flagging orders for split shipment, replenishment, or delays
- Managing internal communications about
For more sophisticated operations, OMS also optimizes fulfillment to gang up serial orders for shipment to a customer.
Where does order management take place?
Any point of sale platform, eCom platforms included, contain a rudimentary OMS function. More mature businesses might have discrete OMS platforms, with a full team managing both the automations and the manual processes that get orders to your door, or shield the business from fraud.
Order to Cash
Most orders in digital commerce ship when a credit card authorization is secured. This authorization gives the merchant a reasonable amount of confidence that the buyer is good for the money, but the authorization is just the beginning. The merchant must then capture (or debit) the payment from the buyer. Depending on the terms of the agreement, it could be 3-5 days before the funds arrive in the payment gateway account.
Funds are 'swept' (transferred in bulk) to the merchant's bank account on a set schedule after payments have settled. For international transactions, this could take as long as two weeks!
The role of the order to cash operations team is to financially account for all shipped orders and their corresponding payments, ensuring that the balance sheet is intact.
And finally, what do you do when things go wrong? Customers want human accountability. Something that we've found through primary research over the past year at Future Commerce is that customers are willing to endure more friction when they desire a human to take accountability for a lost package, a wrong product shipment, a size exchange, or the desire for a refund. Whenever there is friction, there's the opportunity for churn.
Historically, contact centers were cost centers to manage exceptions. But today, with more data about the customer, the contact center has the opportunity to transform into a profit center. When the customer feels like the employee on the other end of the line knows 1) who they are and 2) what their history is, they will 3) feel a closer connection when they reach the positive resolution that they're in search of.
Data is empowering the transformation of this relationship. And B2B SaaS companies are empowering new suites of tools that are integrated with payments and order management to affect change, drive new sales, and allow the contact center employee to have a happy outcome.
Beyond the Marketer
As an engineer, I knew that the devops and infrastructure teams were the ones that made my code highly available to the rest of the business. Without them, I'd be lost. Much the same is true for our eCom businesses. Without product to sell, without settled transactions, and without human intervention, we'd never have brand loyalty.
The myopic focus on the marketing stack has done us a disservice in eCom. The real unsung heroes are the ones who ensure loyalty and profitability for the business. We've written a good deal about this in our most recent research report, Service is the New Storefront, and in an entire season of Step by Step.