In a fast-moving retail world, speed, accuracy, and visibility matter more than ever. Shoppers expect fast deliveries, flexible order options, and seamless experiences across online and physical stores. According to the National Retail Federation (NRF), nearly 80% of consumers now want the ability to buy online and pick up in-store. For retailers, this means one thing: an efficient Order Management System (OMS) is no longer optional — it’s essential.
In this guide, we’ll break down what an OMS is, its key features and functions, the benefits of adopting one, common challenges retailers face, and how to choose the right OMS for your business.
What Is an Order Management System?
An Order Management System (OMS) is software that helps businesses track and manage the entire lifecycle of an order — from the moment a customer places it, through payment, inventory checks, fulfillment, shipping, and after-sales support.
It acts as the central hub connecting sales channels (online stores, marketplaces, physical stores), warehouses, suppliers, and logistics providers. For retailers, wholesalers, and e-commerce businesses, it ensures smooth operations and better customer experiences.
Order Management System Features
Here are the core features modern OMS solutions offer:
- Centralized Order Processing – Manage orders from multiple sales channels in one place.
- Real-Time Inventory Management – Track stock levels across warehouses and stores.
- Multi-Channel Integration – Connects with e-commerce platforms, marketplaces (Amazon, eBay), POS systems, and ERP.
- Payment Processing & Fraud Detection – Secure and automated handling of payments.
- Order Tracking & Fulfillment – Real-time shipment tracking and status updates.
- Returns & Refund Management – Simplifies reverse logistics.
- Customer Communication Tools – Automated order confirmations, shipping updates, etc.
- Order modifications, cancellations, exception handling – Customers change their minds. Addresses may be wrong. Products may stock out. OMS helps you handle all these with minimal friction.
- Analytics & Reporting – Insights on sales, fulfillment speed, stockouts, and customer behavior.
- Mobile apps – Access your OMS on the go to manage sales, customers, orders, product catalogs, invoices, and communications from any device.
- Third-party logistics (3PL) integration – Connect your OMS to external fulfillment partners and carriers to automate order handoffs, track shipments, and sync inventory in real time.
Key Functions of an Order Management System
Knowing features is one thing. Understanding the functions—how OMS operates in your business—is another. Here are the key functions:
- Order Capture: Accept orders from websites, marketplaces, mobile apps, and in-store POS.
- Order Routing: Direct orders to the best fulfillment center (based on location, inventory, or cost).
- Inventory Synchronization: Updates stock levels across all channels in real time.
- Fulfillment Optimization: Ensures orders are shipped quickly and cost-effectively.
- Customer Support Integration: Helps customer service teams access real-time order info.
- Returns Management: Simplifies exchanges and refunds.
- Financial reconciliation, ensuring payments, invoices, and refunds are properly tracked
Benefits of an Order Management System
Adopting a strong OMS brings real rewards. Here are the main ones:
- Improved Efficiency: Improves order fulfillment efficiency. Reduces manual work and errors.
- Faster Order Fulfillment: Customers get products quickly.
- Enhanced Customer Experience: Accurate updates and smooth returns boost satisfaction.
- Inventory Accuracy: Prevents overselling and stockouts.
- Scalability for Growth: Supports business expansion to new sales channels or markets.
- Cost Savings: Optimizes web order fulfillment routes and reduces operational overhead.
- Data-Driven Insights: Better decisions through analytics.
Challenges of an Order Management System
Even with great benefits, implementing and maintaining an OMS comes with challenges. Being aware of them helps you anticipate and avoid pitfalls.
- Integration Complexity: Connecting with existing ERP, POS, or legacy systems can be tough.
- Implementation Costs: Initial setup and customization can be expensive.
- Training & Change Management: Staff need to adapt to new workflows.
- Scalability Issues with Legacy OMS: Outdated systems may not handle high-order volumes.
- Data Accuracy Dependence: If inventory or sales data is inaccurate, the system won’t perform well.
- Vendor Lock-In: Some OMS providers make switching difficult.
How to Choose an Order Management System
Not all OMS solutions are created equal. Here’s a step-by-step approach to finding the right one for your retail business:
- Identify your needs – Start by analyzing your order volumes, sales channels, and customer expectations.
- Look for scalability – Choose an OMS that grows with your business, not one you’ll outgrow in a year.
- Ensure integration – Confirm compatibility with your current POS, ERP, CRM, and eCommerce platforms.
- Evaluate vendor support – Reliable customer service and staff training are critical for success.
- Decide on deployment – Consider whether a cloud-based OMS (faster setup, lower IT costs) or an on-premise system(more control, higher customization) fits your needs.
- Review case studies – Look at how other retailers in your industry are using the solution to boost performance.
Choosing the right OMS is a strategic decision that impacts your entire retail operation.
Conclusion
An Order Management System is more than just software — it’s the backbone of modern retail. From capturing sales across multiple channels to ensuring fast, accurate delivery, a good order management software helps retailers stay competitive in a customer-driven marketplace.
While challenges exist, the benefits far outweigh the hurdles. By carefully selecting and implementing the right OMS, retailers can improve efficiency, delight customers, and scale their business with confidence. The future of retail belongs to those who can manage orders seamlessly across all channels — and that’s exactly what a strong OMS delivers.
Take Your OMS to the Next Level with EcomDrive
Our e-commerce order management system is the cornerstone of EcomDrive’s fully integrated back office. It provides comprehensive, scalable, and flexible order lifecycle management functionality that seamlessly supports your entire web order operation — from procurement through to shipment.
The ecommerce OMS consists of a suite of components that streamlines all buying, selling, and fulfillment processes, resulting in an efficient and cost-effective workflow. Being integrated with the entire back office ensures that order processing is optimized and functions in unison with everything the system offers, from CRM to fulfillment and accounting.
Ready to see it in action? Schedule a EcomDrive ecommerce software demo today and experience how a fully integrated Order Management System (OMS) can transform your retail operations.