Online Retail Today

3 Ways to Brace for Online Sales Tax Changes

So far, June’s U.S. Supreme Court ruling on sales tax collection has had little effect on merchants. But amidst ongoing debate in Congress and statehouses nationwide, sellers should brace for change in the coming year, and prepare to mobilize omnichannel efforts to smooth the transition.

The Supreme Court’s South Dakota v. Wayfair Inc. decision opened the door to sales tax collection for online purchases, but states are still formulating their responses. A Congressional hearing last month gathered input from supporters and opponents of the ruling, while past attempts at creating federal policy to simplify the existing patchwork of sales-tax rates and rules have continued to stall.

With so much variance in state-by-state sales tax rates, compliance can be tricky and costly.

With so much variance in state-by-state sales tax rates, compliance can be tricky and costly.
Source: Wikideas1 on wikicommons https://commons.wikimedia.org/w/index.php?curid=57036307

Amidst the confusion, merchants wonder what they can do to prepare for whatever the eventual result may be. The good news is that they can position themselves for success now – and many of the tools they need may already be available to them. Among the moves to consider:

Secure a nimble solution now for eCommerce sales tax compliance. Keeping up to date on changing legislation state by state and municipality by municipality can be onerous for small- to mid-sized merchants. They should verify whether their eCommerce software integrates with specialized solutions that help with up-to-the-minute sales tax compliance. Kibo clients can activate Avalara with a one-click integration, while the service TaxCloud is free to merchants.

Offset online sales tax with alternative discounts. One analyst conjectured that 1 in 10 online shoppers will revert to purchasing in physical stores due to implementation of online sales taxes. Merchants should anticipate that the bump in total order cost may dissuade price-conscious shoppers or buyers of big-ticket items, and find other ways to motivate the sale. Item price discounts, double loyalty rewards, or value-added services such as white-glove delivery and installation are among the options.

Strengthen online/offline connections to win sales. Merchants with physical outlets have an advantage if online sales taxes are levied more widely, in that store and eCommerce site pricing can be completely consistent. Shoppers can opt for stores to receive items instantly – or avail themselves of free store pickup for online orders as a means of skipping delivery costs and  keeping the online order total as low as possible. Merchants should work to fully integrate back-end operations in real time and streamline store pickup processes to encourage fluid omnichannel experiences.

How are you planning for potential sales tax adjustments in the coming year?

Digital Stores Survey, Online Shoppers and account creation

For Personalization Success this Holiday Season, Unwrap the Gift of Data.

There’s no time like the holidays to prove the time- and money-saving potential of omnichannel personalization. To achieve optimal results, merchants should feed the right data into their eCommerce personalization engines now to drive accurate real-time recommendations during the peak season.

With so many products and offers crowding online search results and email inboxes, shoppers increasingly acknowledge the potential benefits of personalization. Some 83% of consumers say they’re willing to share data in order to enable a personalized experience, while 91% say they’re more likely to shop with brands that recognize them and provide relevant offers, according to global strategy firm Accenture.

91% of consumers say they’re more likely to shop with brands that recognize them and provide relevant offers.

But the key word, so far, is “potential.” While shoppers yearn for apt recommendations and individualized offers, many personalization attempts miss the mark as retailers struggle to wrangle data into relevant real-time experiences. Fully 48% of shoppers in the Accenture study reported leaving a business’ Web site because of poorly curated offerings, and technology researcher Forrester found that while 90% of retailers say they prioritize personalization, just 40% of consumers report receiving relevant products and offers.

Forrester found that while 90% of retailers say they prioritize personalization, just 40% of consumers report receiving relevant products and offers.

The holidays complicate personalization efforts further because even shoppers who’ve logged multiple interactions with brands often switch behaviors and interests when shopping for gifts for other people. And merchants who’ve yet to create unified customer profiles that incorporate online, mobile, and in-store interactions are at a further disadvantage during the holidays, when online-to-offline activity surges as shoppers research and locate gifts online for purchase in stores.

To overcome these challenges, merchants should begin now to step up data-gathering efforts in an effort to “train” the machine learning algorithms how to predict likely shopping preferences before the season begins. In addition to processing current eCommerce and mobile site data, merchants can run analyses on last year’s holiday activity to increase the likelihood of upcoming peak-season relevance. Among the data sets to glean:

Product pairings and groupings for gift sets. Gift buyers gravitate toward samplers and sets, so merchants should use recommendation engines to surface unique combinations of products that are frequently bought together yet might not typically show up in automated cross-sell or upsell picks. They can then use real-time personalization to tailor pairings or collection recommendations based on cues about preferred price points, brands, or colors.  

Holiday-centric customer segments. While segmentation is considered passé in the era of real-time personalization, customer segments are, in fact, a useful data point for recommendations and offers. And during the holidays, groupings such as loyalty club members, year-round versus once-a-year buyers, and online-only versus omnichannel users can help hone experiences significantly.

Gift-giving cues. While it can be difficult to determine whether purchases are for customers themselves or for others, some purchases can be flagged as likely gift picks – especially when analyzing past holiday data. They include:

  • Items not in shoppers’ typical size, gender, or price range
  • Items shipped to other names and addresses stored in customers’ address books
  • Items purchased using gift cards
  • Items purchased in orders that also include gift cards
  • Products saved to wish lists
  • Items shared or favorited socially

Online/offline usage. Merchants should do their utmost to understand shoppers’ store usage patterns, whether by knitting together online and offline interactions in a unified customer profile or by outright asking online shoppers to choose a store near them. Such localized information can then be used to inform real-time inventory information and back-in-stock alerts during the peak season.

Mobile search. More than half of all traffic to retail Web sites came from mobile devices during the 2017 holiday season, according to Adobe, so merchants should prepare for this year accordingly – including honing mobile search with personalized recommendations and suggested keyword terms. Search is especially important on mobile devices both because the smaller screen size is more suited to focused searching versus browsing, and because shoppers are likely to use mobile devices to hunt for items on the go, whether while between store visits or from within the store aisles. Search usage can also spike during the holidays when shoppers visit new sites at the behest of recipients who’ve requested specific items. Intelligent search can help these first-time visitors connect to the right products faster.

Explicitly-collected data. Given that shoppers are willing to share information with brands in the hopes of receiving relevant picks, merchants can devise opportunities to collect holiday information up front. Merchants can do this in the form of holiday surveys or sweepstakes responses, via gift guide customization tools that collect information on recipients and givers to make gift picks, or even in brief questionnaires attached to email signup forms.

Regardless of which information merchants feed their personalization platforms, they should test – and retest – the results as manifested in personalized eCommerce site, email, and mobile features. Asking friends and family to form ad-hoc test groups can give merchants valuable feedback on how personalization features work outside the office and over time.

How are you boosting personalization effectiveness for the holidays?

Holiday Gift Guide

Distributed Order Management: Holidays in August Edition

As summer swelters, merchants are busy planning for the winter season’s peak sales bonanza. New eCommerce site features and store designs may dazzle shoppers as they make their holiday debuts, but just as important – if not more so – is the engine with the potential to integrate these touchpoints into a seamless whole: the distributed order management system.

Retailers increasingly recognize the importance of fulfillment alternatives such as Buy Online, Pickup In-Store (BOPIS) and “endless aisle” capabilities that link store shoppers to online inventory. That’s because such services are increasingly popular, especially over the holidays.  In 2017, for example, 58% of holiday shoppers reported they planned to use BOPIS – a 25% increase from the prior year, according to Kibo’s Holiday Consumer Trends report.

Furthermore, merchants of all stripes – from online-only retailers to brand manufacturers selling direct to consumer  – increasingly face pressure to boost order fulfillment speed. Thanks to the wide popularity of Amazon’s Prime service, which includes free 2-day shipping and reportedly counts more than 95 million members in the U.S., expectations for swift and free holiday delivery are on the rise. Last year, a holiday survey from research firm, Deloitte, found that 64% of shoppers would pay nothing extra to receive holiday orders in 2 days, and 65% believed they could order holiday gifts after December 17 and still receive free on-time delivery for Christmas.

Robust order management software is key to providing both in-store fulfillment services and the swiftest possible delivery options – but merchants have so far been slow to prioritize overhauling legacy systems. Technology researcher, Forrester, found that just 5% of retailers ranked order management as a top operations initiative for 2018, which means that many sellers may find themselves ill-equipped to realize their holiday fulfillment goals.

Even those who’ve taken steps to modernize their omnichannel fulfillment systems are fast approaching “code freeze”, when new features and integrations are put on hold to ensure the stability of the eCommerce site, mobile apps, and back-end systems through the holiday season. But given the high consumer expectations for seamless fulfillment, merchants can – and should – continue to work on optimizing order management operations through the end of summer and into fall.

Fortunately, there are many order management improvements that retailers and online merchants can make which don’t require a total code overhaul or new integrations.

 

Repeatedly test BOPIS features end-to-end.

Retailers with physical stores, as well as manufacturers who’ve integrated their website offerings to feature retail partners, have much to gain from a seamless BOPIS operation. Not only can fast, free order pickup satisfy holiday shoppers’ need for fulfillment speed; as the clock counts down to the holidays, BOPIS can bridge the gap between online and offline for last-minute shoppers who order too late for home delivery. In fact, some 30% of merchants last year didn’t publicize guaranteed delivery cutoff dates. And those that did set the cutoff an average of one day earlier, compared to the previous year. This change was in part due to the availability of last-minute alternatives such as BOPIS.

To realize the full potential of BOPIS for the holidays, merchants should test the functionality of their system extensively, including monitoring online inventory visibility for accuracy, fine-tuning post-purchase transactional emails and notifications, streamlining mobile BOPIS features, and using outsider “mystery shoppers” to ensure store signage is clear and pickup counter service is on-point.

 

Prepare to capitalize on pickup traffic in stores.

Some 36% of consumers who use store pickup report buying additional items off the shelves, according to Forrester. Anecdotal evidence suggests that during the holidays, that percentage is even higher.

BOPIS users who buy additional items say that special deals highlighted in-store are among the top reasons they make additional purchases, according to Forrester. Merchants should therefore ensure that store pickup customers are cognizant of the latest holiday deals. Transactional emails and pickup notifications should feature an invitation to receive localized deal alerts via email and/or mobile.Signage near the pick-up counter should give shoppers another opportunity to learn about in-store events and promotions. Assortments of stocking stuffers and other gift-friendly merchandise should also be on prominent display nearby.

 

Train seasonal store workers to “save the sale.”

More than half of store shoppers are willing to have out-of-stock items ordered online and shipped to their home, Forrester found, suggesting that merchants who are well-prepared can indeed “save the sale.”  Shoppers are increasingly using this option, with close to 60% of participants in Kibo’s 2018 Consumer Trends Report survey saying they’ve relied on store associates to locate items elsewhere in the past six months – an 18% jump compared with the previous year.

To take advantage of this opportunity, merchants should ensure that regular and seasonal store workers are well-versed in procedures for locating and ordering items from other outlets, and store-to-store inventory tracking should be tested for accuracy.

 

Prepare for the wave of post-holiday returns.

In addition to optimizing the potential for customer acquisition and sales using omnichannel fulfillment, merchants should also spend time before the holidays vetting their reverse logistics. That’s because anywhere from 20% to 30% of items ordered online are returned, according to Multichannel Merchant – and the percentage can surge still higher during the holidays. Indeed, in 2017 Deloitte found that some 44% of shoppers predicted they’d take advantage of policies that enable easy returns.

Fully 58% of shoppers prefer to return items to local store outlets, according to UPS’ Pulse of the Online Shopper report – and given that up to 70% of in-store returns can result in new sales, merchants should promote the option, if it’s available, to encourage disappointed gift recipients to visit and examine alternative purchases. Even if immediate new sales don’t result, flexible and hassle-free returns can engender plenty of holiday goodwill, earning brand trust and a possible future repeat visit.

How are you preparing order management operations for the holiday rush?

customer experience with omnichannel

Manufacturers: BOPIS is for You, Too

Manufacturers are increasingly taking advantage of their online presence to establish direct connections with shoppers. Crucial to continued success is offering popular store pick-up options – or BOPIS, in the current lingo – which can not only meet rising expectations for omnichannel fulfillment, but strengthen retail partner relationships in the process.

Given that online browsing and research influence fully half of all retail sales, brand manufacturers are seizing the opportunity to establish direct relationships with consumers through website offerings. Investment in deep product information has paid off, with consumers saying such content is the leading reason they seek out manufacturers’ Web sites, according to the Kibo 2018 Consumer Trends Report.

But many manufacturers hesitate to go all-in on transactional eCommerce software and order management systems – both because the prospect of wading into the world of direct-to-consumer retail sales is daunting, and because of potential channel conflicts with retail partners.

Many brand manufacturers invite shoppers to link away to retail partners’ eCommerce-enabled sites in order to purchase online. But such disjointed experiences are increasingly inadequate in a world where eCommerce juggernaut Amazon trains shoppers to expect frictionless, one-click transactions.

Indeed, Kibo’s Consumer Trends Report survey found that shoppers already look to manufacturers to provide fulfillment options as comprehensive as their product content. Fully 45% of surveyed shoppers said they expected manufacturers to offer a wider assortment of products, and 40% expected more products to be in-stock, than could be found at local retailers. Nearly a third of respondents said they expected manufacturers to offer the broadest array of order fulfillment options when compared with retailers.

To meet those expectations, manufacturers should invest not only in eCommerce transaction capabilities, but also robust omnichannel fulfillment software – and then prioritize Buy Online, Pickup In-Store (BOPIS) as the first feature they enable.

BOPIS is widely popular, with 66% of Kibo survey respondents saying they use it. Because it’s fast – some stores offer pickup within hours – BOPIS satisfies shoppers’ increasing expectations for swift and free fulfillment; 63% of online shoppers now say they expect to receive items ordered online within three days, according to the Kibo study.

With the right order fulfillment software, manufacturers can use BOPIS to cement the store-brand connection, by:

 

Leveraging existing retailer relationships.

When Mizuno USA’s 5,000 retail partners saw the athletic gear manufacturer broadening its eCommerce capabilities, they feared channel conflict – a concern Mizuno put to rest by integrating retail outlets and their inventory into online fulfillment options.

“Initially, our small mom and pop retailers were concerned that we were going direct-to-consumer; then we got them to understand that we want to include you in that process. We want to use you guys for fulfillment on our behalf,” explained Keith Neeley, vice president of Operations and eCommerce for Mizuno USA.

Thanks to the real-time inventory capabilities of Kibo’s order management system, online shoppers can instantly find the Mizuno retail partner with the product they want nearest them.

Such integrations are a win-win for manufacturers and retail partners alike. Manufacturers burnish their reputations with consumers for offering a seamless eCommerce experience, while retail partners stand to gain when shoppers visit outlets to pick up orders and make additional purchases.

Some 44% of shoppers who pick up orders in-store buy more items on the spot, according to data from the UPS Pulse of the Online Shopper report for 2018. During the recent holiday season, leading retailers such as Kohl’s, Target, and Lowe’s reported that anywhere from 20% to 40% of BOPIS customers went on to buy more in-store, and added an average of 25% to the order total.

 

Driving traffic to manufacturers’ own retail outlets.

In an effort to forge tighter bonds with consumers, more and more manufacturers are opening the doors on branded stores, which can serve as powerful platforms for events, strategic content, and promotions. The number of manufacturers planning to open brick-and-mortar channels in the next three years has jumped by 18 percent, according to a study by international retail consultant Ebeltoft Group.

Manufacturers can add their own outlets into the BOPIS mix, encouraging online shoppers to visit and immerse themselves in branded store environments. With the backing of robust order management capabilities, manufacturers with stores can transform outlets into fulfillment hubs, with store pickup enhanced by associates’ ability to source and order items at other locations.

Apple, legendary for its sleek and streamlined product designs, also offers streamlined order fulfillment with fully-integrated and fast Apple Store pickup. Notifications and tracking are available via a mobile app. Customers who opt to use the service can avail themselves of knowledgeable store staff to help set up devices, increasing the likelihood they’ll be satisfied with their purchase – and purchase further accessories on site.

Example for in-store pick (BOPIS) up from Apple's website
Do you offer in-store pickup as a manufacturer? Or, if you’re a retailer, do you handle orders direct from manufacturers?