You can make holiday sales success with unbeatable customer service
It takes more than just great sales and bargains to make the holiday shopping season profitable. Customers searched the web for the best deals over Cyber Monday and Black Friday. Turning bargain shoppers into regular customers is the key to a successful season. Retailers must focus on customer service in order to keep customers returning. Retailers must ensure that customers are satisfied with their shopping experience on ecommerce sites. Many industry experts agree that customer service is crucial during holidays.
Kate Hogenson is the senior consultant for loyalty and customer experience at Kobie Marketing. She says that Cyber Monday and Black Friday often bring new customers to brands because they are looking for the best deals. Businesses that allow these first-time customers to disappear are missing out an opportunity to engage them beyond the single purchase. Retailers should not limit themselves to offering discounts that can be easily matched, but instead focus on providing seamless experiences and following-up with relevant offers based upon the first purchase to convert one-time customers into repeat customers. This means that you must capture contact information and permission for re-connect, even if holiday volumes are high. A streamlined process is crucial to your success.
Jeff Cheal, Episerver’s director of personalization and campaign strategy, explains that Cyber Monday and Black Friday are simply a race for the bottom for retailers. You can only compete with the best sales on major holidays. The retailers will succeed this holiday season because they help customers to find meaningful gifts at the right prices, and not just the cheapest . 38% of online shoppers expect personalized product recommendations. Retailers like J. Crew and Bikbok already do a great job.”
Redickaa Subramanian, co-founder and CEO at Resulticks has some insights into the matter. “Black Friday and Cyber Monday are fierce competition for retailers, particularly in terms of price, selection, and customer service. Surprisingly many people overlook another important competitive dimension: the customer experience across all channels. Only 9 percent of respondents describe their marketing strategy in omnichannel terms. Nearly one third of respondents have either abandoned the idea or are unsure if they will implement omnichannel. This could be costly. 2017 holiday retail sales are expected to rise by almost $26.2 billion compared to last year. Brands must increase their competitive edge. Delivering consistent and seamless experiences across all channels (in-store, online, and mobile) will greatly expand the possibilities.
These experts each offer fresh perspectives on how retailers can increase sales and improve their holiday season success. It is crucial to ensure customers get the attention they deserve, online and in-person. Brick and mortar stores must create a positive shopping experience in-store, and offer support and resources online.
The Truth About Online Retailers’ Sales Tax
For a variety of reasons, online sales tax has been in national spotlight for the past year. In 2016, MyPillow , an online retailer, agreed to pay $1.1 million to New York. New York claimed that the retailer had knowingly failed to collect sales taxes from its customers.
Minnesota is the home of MyPillow . It was common for retailers to only collect sales tax from customers where they have a physical presence. MyPillow (r-) was in Minnesota. However, the Attorney General claimed they owed New York taxes because the company sold products in New York at trade shows through independent contractors, among other reasons.
The lawsuit has more or less made different states and metropolitan areas aware of the possibility that they might be missing sales tax revenue from wholesalers and online retailers. The idea that they could collect money on it is appealing because all state governments are in debt. Some more so than others.
Trump tweeted in August that Amazon was doing “great damage” to tax-paying retailers. “Many jobs are being lost in U.S. towns, cities and states,” Trump tweeted. The President insisted that Amazon was not paying taxes, keeping the topic of online sales tax front-page news.
Amazon pays taxes. Amazon collects sales tax on any product they directly sell. Third-party sellers on Amazon Marketplace are another matter. They make up a significant portion of Amazon’s total sales. “States and local governments lose approximately $5 billion per year in taxes from Amazon Marketplace commerce because merchants won’t collect them, and shoppers don’t have to pay them after they’ve happened,” James Thomson, an ex-Amazon employee and founder of the Prosper tradeshow and ecommerce consultant told Bloomberg.
Because the retailer temporarily holds the money before it transfers it to the state or local authorities, sales tax is considered a “pass through” tax. States have plenty of flexibility when it comes selling tax. Therefore, all 45 states and Washington D.C. have different sales tax rates.
Even if a seller (such as Amazon) doesn’t collect sales taxes, in many states the buyer is responsible for paying the tax. Customers are required to report online transactions on their tax returns and pay any applicable taxes. This is rare and the states are not likely to pursue shoppers who fail to pay sales taxes.
States have subpoenaed Amazon sellers with larger sales volumes to collect unpaid taxes. The solution is not easy. Online sellers don’t often choose to avoid sales tax. Thomson explained that third-party sellers who use Amazon Fulfilled by Amazon Services (FBA), don’t know where their inventory is stored. This would affect the sales tax rate that they must collect. Although it is possible to pay Amazon for taxes, very few people know about this option.
Even for online sellers, it can be difficult to determine the correct sales tax. Sales tax sourcing refers to the process of determining the tax rate that should be applied based on where you live. There are many variables that affect jurisdiction. First, locate your business’ “nexus” or, in legal terms, where it is located. The location of your business’s nexus, also known as its facility, employees or inventory, is where you have to be located. It is likely that you will have many. This is why there is so much confusion for FBA Amazon sellers, who may have products in any one of Amazon’s many warehouses.
To collect sales tax from ecommerce customers, there are two requirements. Your business must have a sales tax nexus within the state in which your customer lives. Your company may be based in Hartford, Connecticut, and your customer is located in Stamford. The second requirement is whether the product you sell is tax-exempt in that state. It will most likely be. However, there are some exceptions. Clothing is exempted from tax in Pennsylvania.
Most states have a destination-based sales tax. This means that you must charge the appropriate sales tax rate for the area where your customer resides. In the above example, you would charge Stamford, Connecticut sales tax for your customer, and not Hartford, Connecticut from where you are shipping. Some states, like Texas and California, have an origin-based sales tax. This means that you will charge the sales tax rate applicable to the place you ship from and not the rate applicable to the customer’s home.
Online sales tax is complicated. Many online sellers are confused or have skipped the tax altogether. It is crucial that you have all your ducks in order as the state and local governments continue their crackdown on ecommerce sellers. Automating the process is the best way to accomplish this. Amazon can handle taxes for FBA sellers. Taxify, TaxJar and Avalara can automatically collect and report sales taxes for independent sellers and ecommerce websites. Online sellers cannot ignore the issue of sales tax. Every retailer must collect and submit accurate sales tax. Automating your sales tax collection and remittance process will save you a lot of headaches later.