A customer discovers a jacket online, checks whether it is available in a nearby store, orders it for pickup, and later returns it at another location. From the customer's perspective, this should be one simple shopping journey. Behind the scenes, however, that transaction can involve e-commerce, point of sale, inventory, customer information, pricing, fulfillment, payments, and returns.In this episode of Microsoft Knowledge Nuggets on M365 FM, Mirko Peters explains Microsoft Dynamics 365 Commerce in plain English and explores how it connects physical stores, e-commerce, point of sale, products, inventory, pricing, customers, orders, loyalty, fulfillment, and retail operations.Rather than treating stores, websites, and back-office systems as separate environments, Dynamics 365 Commerce provides a connected foundation for modern omnichannel retail.
WHAT IS DYNAMICS 365 COMMERCE?
Dynamics 365 Commerce is Microsoft's platform for connecting the processes behind selling products across physical stores, websites, and other commerce channels.Retailers need consistent answers to basic questions: What products do we sell? What does each product cost? Where is inventory available? Which orders require action? What has a customer purchased previously?When different systems provide different answers, problems quickly appear. A website might display one price while the store displays another. A product might appear available online even though the physical inventory is unavailable. Store employees may be unable to access an order created through the website.Dynamics 365 Commerce connects these activities around shared business information.It is therefore much more than an e-commerce website builder or point-of-sale application.
FROM DYNAMICS 365 RETAIL TO DYNAMICS 365 COMMERCE
Dynamics 365 Commerce evolved from Dynamics 365 Retail, which primarily focused on physical retail operations and point of sale.Modern shopping journeys no longer remain within a single channel.Customers might discover a product online, inspect it in a physical store, order it through their phone, collect it somewhere else, and later contact customer service.Commerce is designed around this reality.The individual channels become different entrances into the same connected retail operation rather than isolated businesses with separate information.
OMNICHANNEL RETAIL
Omnichannel commerce means customers can move between channels while the underlying business information remains connected.A customer might begin a purchase on a smartphone and complete it inside a store. Another customer might purchase online and collect the order from a local branch.Someone else might purchase online but return the item to a completely different physical store.The customer should not need to understand which internal system originally processed the transaction.Dynamics 365 Commerce connects customer-facing channels with products, prices, inventory, customer records, orders, and fulfillment information so retailers can create more consistent experiences across those channels.
REAL-TIME INVENTORY VISIBILITY
Inventory visibility is fundamental to omnichannel retail.If a website tells a customer that a product is available for collection, the business needs sufficient inventory information to support that promise.A product existing in the catalog does not necessarily mean it is physically available in the customer's preferred location.Dynamics 365 Commerce connects online shopping experiences with inventory information from stores and warehouses, allowing retailers to provide customers with more realistic availability information.This enables experiences such as checking local availability before visiting a store.
BUY ONLINE, PICK UP IN STORE
Buy Online, Pick Up In Store scenarios connect digital shopping with physical retail locations.A customer can find a product online, place the order, and select a nearby store as the collection point.Behind that simple customer choice, the retailer needs to know whether the selected location has appropriate inventory, whether the store can prepare the order, and when the product will realistically be ready.The store effectively becomes part of the e-commerce fulfillment network.This is one example of how Dynamics 365 Commerce turns physical retail locations into more than traditional sales floors.
SHIP FROM STORE
Stores can also become fulfillment locations.If a customer places an online order and a particular store has the required inventory, the retailer may choose to fulfill the order from that store rather than a central warehouse.This can potentially improve inventory utilization and give businesses additional options for fulfilling customer demand.The customer simply sees that the product can be delivered.Behind the scenes, Commerce helps connect the order with the location responsible for preparing it.
CROSS-CHANNEL RETURNS
Returns demonstrate why connected commerce information matters.Imagine a customer purchases an item online but later decides to return it at a physical store.In a disconnected environment, the employee might be unable to access the original online order and could tell the customer that online purchases must be handled through another system.With connected order and customer information, store employees can locate the relevant transaction and process supported return scenarios without treating the website and physical store as completely separate businesses.That creates a much more consistent customer experience.
ENDLESS AISLE
A physical store has limited shelf space. The retailer's wider inventory network does not necessarily have the same limitation.The endless aisle concept allows store employees to look beyond inventory physically available in their current location.If a customer wants a particular shoe size that has sold out locally, an employee may be able to check inventory elsewhere, place the order, and arrange delivery or pickup from another location.The physical shelf therefore stops defining the complete product selection available to the customer.
DISTRIBUTED ORDER MANAGEMENT
When several stores and warehouses can fulfill the same order, the retailer needs to determine which location should actually handle it.This is where Distributed Order Management becomes important.Dynamics 365 Commerce can use retailer-defined business rules to determine an appropriate fulfillment location based on factors such as available inventory, delivery commitments, and locations capable of fulfilling the order.Instead of every order entering a queue where employees manually determine the fulfillment location, the platform can help route orders according to established business rules.People still perform the physical work of picking, packing, shipping, and handing products to customers.
STORE COMMERCE AND POINT OF SALE
Physical store employees need fast access to information while customers are standing in front of them.The Store Commerce app provides point-of-sale capabilities for retail employees.Cashiers can use it at traditional checkout counters, while sales associates can use supported mobile devices around the store.According to the episode, Store Commerce supports environments including Windows, iOS, Android, and macOS, giving retailers flexibility in how employees interact with the platform.The point of sale becomes more than a payment terminal. It becomes an operational tool for helping customers.
WHAT STORE EMPLOYEES CAN DO
Store Commerce supports activities around the complete in-store customer interaction.Employees can process sales, find customers, check inventory, work with orders, handle returns, and access reporting.The platform can also support operational activities such as shifts and cash management.Different employees have different responsibilities, so role-based experiences can provide functionality appropriate to cashiers, managers, sales employees, or stock workers.The objective is to give employees access to the information required for their role without forcing them to navigate multiple disconnected applications.
CONSISTENT PRICING AND BUSINESS RULES
Customers expect prices and promotions to remain consistent across channels according to the retailer's policies.Commerce provides a shared foundation for product information, pricing, promotions, customer information, and order processing.Store employees might interact with this foundation through Store Commerce while online customers use the e-commerce storefront.Although the interfaces are different, they can rely on the same underlying commerce rules.This helps retailers reduce situations where customers encounter completely different information depending on which channel they use.
WHAT IS THE COMMERCE SCALE UNIT?
One of the important technical components explained in the episode is the Commerce Scale Unit.Think of it as an engine behind the customer-facing commerce experiences.A shopper might interact with a website. Another customer might use a mobile application. A store employee might use Store Commerce.Behind these different interfaces, the Commerce Scale Unit processes requests and applies commerce rules.Customers never need to know that this engine exists. They simply expect the correct product information, pricing, availability, promotions, and order actions.
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