By Anh Carter, Compliance Director at Avalara, reveals her top tips for companies to stay on top of tax compliance and the enhanced customer experience it could drive.
Businesses selling goods and services online are certainly operating among an interesting set of dynamics in 2022.
Despite the COVID-19 pandemic and associated economic and social activity restrictions causing severe hardship to many companies and consumers, a surge in online shopping activity has been on a steady rise during the past two years.
Indeed, according to a survey conducted by Barclaycard, 2021 saw consumer e-commerce spending surpass 2019 levels by 5.9%. Meanwhile, data from McKinsey shows that the adoption of digital products and services accelerated by seven years in the space of just a few months at the start of 2020.
But analysts are predicting a hike in prices for 2022, adding further pressure onto retailers seeking to build a loyal customer base.
Amid what many are dubbing the cost-of-living crisis, shoppers will be seeking to spend their hard-earned cash with retailers and firms who provide consistently good value and a great service.
Below are the five priorities companies should be considering to get ahead of the curve within the ever-evolving tax landscape to provide a compelling offering to customers.
Use data to understand your customers
Getting to know your customer base is critical for several reasons, not least because it will inform your strategies around marketing, sales and tax compliance.
According to a recent forecast, the global demand for customer data platforms is expanding rapidly, and will reach USD 20.5 billion by 2027.
These software systems assist in collecting and systemising customer data across numerous touchpoints, helping organisations to build a comprehensive and holistic picture of their customer base.
This month, businesses should take the time to analyse their customer and sales data from the peak/busy seasonal periods. Where are they? What do they want? What are they asking for? How are they purchasing your goods or services?
Insights to these questions will provide firms with a data-driven foundation from which to build out strategies across numerous key business areas, which in turn will help to build a better customer experience (CX).
Audit the online checkout experience
Online buyers have grown accustomed to viewing tax and shipping in the shopping basket – in other words, full transparency over the total cost and a breakdown of where their money is being spent.
We work with many online vendors, and from our experience, consumers are looking for speedy, accurate, and consistent tax calculations across all channels.
What’s the online experience like for your customers? Did you receive any complaints or enquiries on areas such as couriers passing on additional taxes and customs charges to your buyers? If the answer to this second question is yes, then chances are your checkout might need a bit of a refresh.
Tax compliance – understand your sales markets
Consumers face more choice over how and where they acquire goods and services than ever before.
Omnichannel experiences are a must-have part of a modern-day retailer’s offering, and competition to secure custom is becoming increasingly fierce due to a surge in cross-border trading – indeed, the value of cross-border ecommerce is predicted to grow at 25% a year, more than double the rate of domestic e-commerce.
This trend implies that retailers are likely to be subject to new tax obligations.
If you plan to ramp up your online sales or break into new channels for the first time this year, seek support to help you effectively prepare for additional tax obligations to reduce the risk of audit and inaccurate tax costs at checkout.
Invest in technology and infrastructure
Whether it’s during busy seasonal periods or other times of the year, omnichannel e-commerce weighs heavily on the systems and infrastructure retailers have in place.
Organisations seeking to present a genuine multichannel offering will require next-generation technologies to offer a blend of online and in-person shopping experiences successfully.
If your business has not already started to put such infrastructure in place, now might be the time to detail the investment you’re likely to need, to ensure you remain competitive and compliant.
Use automated tools to boost CX
Investing in automation isn’t just about remaining tax compliant. It’s also about taking the burden off the customer, so their experience with you is a positive one.
As you’re building out your business case for investment in your technology infrastructure, look at how you can deliver a seamless experience that results in consistent tax determination across multiple systems.
With the cost of living on the up and consumers becoming increasingly conscious about where their money is being spent, retailers should be doing everything they can to make shopping with them as transparent as possible.
While compliance may not have been at the top of many organisations’ new year’s resolution list, getting this right now will win customers’ hearts and minds.
By providing them with a seamless retail experience that takes into account what may appear as the smallest of details, companies can ensure their customers come back to them time and time again.
Wanda Rich has been the Editor-in-Chief of Global Banking & Finance Review since 2011, playing a pivotal role in shaping the publication’s content and direction. Under her leadership, the magazine has expanded its global reach and established itself as a trusted source of information and analysis across various financial sectors. She is known for conducting exclusive interviews with industry leaders and oversees the Global Banking & Finance Awards, which recognize innovation and leadership in finance. In addition to Global Banking & Finance Review, Wanda also serves as editor for numerous other platforms, including Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune.