How IBM Sterling Order Management is Transforming Retail Operations

With the rise of AI, ever-evolving customer needs, and seemingly endless supply chain disruptions, being in the retail business can be challenging.  Luckily, technology has the potential to provide a welcome reprieve that helps overcome these difficulties.  According to the IBM Institute for Business Value (IBV), organizations are already taking notice. Their recent report Embedding AI in Your Brand’s DNA states that “by 2025, retail and consumer products companies surveyed say they plan to allocate an average of 3.32% of their revenue to AI”.

From fulfilling online orders, to keeping the right items in stock, and even managing customer service via call centers more efficiently, leveraging technology- especially when underpinned by AI capabilities- can be a game changer for retailers. Thanks to software solutions like IBM Sterling Order Management, many organizations are already seeing the benefits of operationalizing technology in the form of simplified and more efficient operations.

Meeting Customer Demand Thanks to Revolutionary Inventory Visibility 

In any given calendar year, customer’s priorities are constantly evolving. Therefore, it can be difficult for retailers to predict buying patterns and accurately prepare to fulfill their orders. Take Advance Auto Parts (AAP), for example. They manage a catalog of 2 million unique parts at any given time. With the capacity to stock fewer than 20,000 SKUs at each store, AAP faced challenges in efficiently fulfilling customer orders.

To improve customer order fulfilment, AAP leveraged OneRail and IBM’s solutions, helping them gain visibility into inventory across multiple locations, and enabling dynamic selection of inventory in real-time.

Partnering with another company that’s customer-centric is really important. IBM and OneRail sit shoulder to shoulder with you to figure out how to best serve your customer,” said Advance Auto Parts EVP & CFO Ryan Grimsland.

By implementing this technology, AAP improved their ability to meet demand with precision while reducing inefficiencies. The result was a 98% on-time delivery rate, a 12% reduction in transportation costs, and a 27% sales increase for their 30-minute delivery segment.

Improving omni channel Order Fulfillment

When it comes to fulfilling customer orders, coordinating efforts across different channels and locations can also be difficult. This was the case for Tiendas Del Sol – Woolworth, the Mexican retail with stores across 70+ cities in the country. As the company navigates evolving consumer demands, they sought tools to help adapt their service accordingly. In turn, they decided to leverage IBM Sterling Order Management and Perfaware’s technology to optimize their order processing capacity with more agile and accurate inventory management.

“Our customers are our reason for being, so we are leveraging our operation to deliver a better experience with Del Sol - Woolworth,” said Rommel Flores, E-commerce Deputy Director at Del Sol -  Woolworth. “And through this technology, we can now provide customers with seamless integration between digital and physical channels, delivering greater accuracy in product availability and facilitating processes such as returns.”  

Additionally, Del Sol- Woolworth used the tools to modernize their operations in the areas of omnichannel, after-sales and logistics. When it comes to omnichannel order fulfillment, they managed to use IBM’s technology to gather timely data around out of stock products. This resulted in a significant reduction in orders cancelled due to out of stock merchandise going from 10% to less than 1%.

Embedding Innovative AI capabilities to Empower Customer Service Representatives

For many retailers, call centers are crucial for their operations. However, it can be difficult for Customer Service Representatives (CSR) to balance providing fast and personalized service. To help our clients overcome this challenge, IBM recently released a new AI-infused IBM Sterling Next Generation Call Center solution as part of IBM Sterling Order Management System (OMS) to support CSRs. The solution plugs into IBM watsonx.ai, our AI development studio, allowing businesses to equip an AI assistant with a comprehensive knowledge base that will help CSRs automate certain manual processes such as applying a coupon retroactively to a customers’ order or summarizing their interaction history, and can lead to more timely issue resolution.

Adopting generative AI (Gen AI) in this manner can empower organizations with the tools they need to enhance both customer and CSR experiences, streamline operations, maintain cost efficiency, and more. 

Supporting Retailers in 2025 and Beyond

As the retail industry continues to evolve this new year, so will customer needs and the strategies businesses must take to fulfill them. At IBM, we are looking forward to continue finding innovative ways for technology solutions, like IBM Sterling, to aid retailers in this ever-changing journey.

Looking for the next step? Check out our blog on the best retailer’s new year’s resolutions: https://www.ibm.com/think/insights/retailers-new-year-resolutions

Learn more about IBM Sterling: https://www.ibm.com/products/order-fulfillment-suite