June 18, 2018

The Importance of Ecommerce & ERP Integration in The Omnichannel Experience

Written by
Ilmie Sham Ku
Tags: ERP

Do you remember the last purchase you made? Where did you discover the product? Was it the same place you ended up purchasing it from? Chances are that there were multiple channels involved in the buying process of that particular item.

You may have found it online but bought it in a brick-and-mortar location. Or, you may have seen the item at a brick-and-mortar location but purchased it a few days later through the brand’s eCommerce site or online marketplaces such as Amazon. Perhaps you saw the product on the company’s site and called them to place the order. This is how customers shop today. Just like yourself, your customers expect a shopping experience that caters to their needs. It should be convenient; it should be seamless; it should be Omnichannel.

So, exactly how many of us are shopping this way? According to the Harvard Business Review, around 73% of today’s consumers shop on more than one channel when making purchases. Whether you’re a B2B or B2C company, in order to expand your business and retain customers, you must offer online and offline channels – these can extend to everything from brick-and-mortar locations, phone, email, EDI, social media and one of the fastest growing channels, eCommerce.

eCommerce is a necessity

Online shopping is a key component of creating an omnichannel experience. Digital Commerce 360 predicts that online sales will continue to gain market share year over year, growing from just under 13% of retail sales in 2017 to 17% by 2022. It has become a necessity for both B2B and B2C businesses looking to grow, with more and more customers flocking to the online space to place their orders – and why wouldn’t they? Shopping online has become one of the most convenient ways to make purchases because it affords customers:

  • The ability to place an order anytime from anywhere, 365 days a year
  • Access to search items by categories such as name, brand, serial number, location
  • Viewable product descriptions and availability
  • Recommended products based on past orders
  • Similar products or complementary products
  • Access to order history

Unifying all sales channels

eCommerce benefits makes having an online presence a no-brainer, however before you set up shop online, it’s important to think about how you will account for these additional sales. What will happen after a customer places an order on your webstore? How will the order get fulfilled?

Integrating a proper back-end software such as an ERP system unifies all your sales channels, which means all of the business’s inventory and sales data gets stored in one central hub. This automates most of your operations and gives you and your customer real-time insight into product availability and pricing.

Here is a quick example that demonstrates what eCommerce and ERP integration looks like.

There are 50 blue watches currently available on your eCommerce site. A customer places an order for 10 blue watches online. This order information flows directly from the online store to ERP system where the following actions occur:

  • Inventory automatically gets allocated for order fulfillment in real-time. This means that the system will know to allocate 10 blue watches for this specific order
  • Inventory quantity is then updated meaning that the system will know that there are only 40 blue watches left in inventory – this update is pushed to the web store and customers will see the new blue watch quantity in real-time.
  • Your warehouse operators also have access to accurate inventory information along with the customer’s shipping information all from one system.
  • Bi-directional information flow allows for shipping confirmation to flow back to the store, updating your customer on the status of the shipment.

Integrating ERP for omnichannel success

What successful omnichannel businesses have in common is that all their different channels are connected – they don’t see individual channels as a separate “stores.” Rather inventory is managed and updated to reflect all sales channels. This is the key to your omnichannel strategy reaching its full potential. You may be thinking that this sounds like a tremendous amount of work, however, it doesn’t need to be with the right back-end ERP solution in place.

Whether your customer is purchasing your products through eCommerce, EDI, in-store, through marketplaces, over the phone/email, or any other form, they can access up-to-date, accurate inventory information such as availability and pricing.

Going back to our example, say another customer was interested in purchasing 30 of the blue watches from your web store, however decides they’d like to see it in person before buying. When they come into your brick and mortar location, you’ll be able to check the quantity in the ERP system, which was updated to account for the previous sale of 10 blue watches placed online and any other sales that have come in from other channels. Once the purchase is made, the system will automatically update the item count and feed it back into your webstore and marketplaces.

A true ERP system will also allow you to manage procurement by giving you accurate insight into reordering levels – you can automate reordering to re-stock the blue watch based on rules you create within the system such as minimum inventory levels.

Ilmie Sham Ku is the Content Marketing Coordinator at Blue Link Associates– an ERP company providing integrated inventory and accounting ERP software for small-medium size businesses. As an all-in-one system, Blue Link helps businesses streamline and automate their processes by providing inventory management, accounting, order entry, warehouse management, and customer relationship management.