The 2020 holiday shopping season resulted in sales higher than most brands could have predicted. And 2021 is looking to follow the trend. With forecasts predicting holiday ecommerce sales will rise 11.3% to $206.88 billion, retail brands need to be ready to meet growing customer demands.
This continued shift to online will create enormous potential for ecommerce retailers. To help you capture more from new sales opportunities while ensuring satisfied customers and maintaining your tax compliance, we’ve put together a list of 5 important tips to guide you in preparing for a holiday shopping season like no other.
Tip 1: Be Prepared for the Surge in Online Sales and New Sales Tax Obligations
For a successful 2021 holiday season, a well-considered ecommerce plan will be the bow on your favorite present. It’s time for all retailers to get set for a significant swell in online sales by thinking outside of the box – and if you’re prepared, you’ll be shipping a lot of those.
You also need to understand your sales tax obligations, since any change or increase in your holiday sales activities may trigger nexus and new requirements surrounding collection and remittance of sales tax. For example:
- Ramped-up online sales mean you’ll be more likely to have new customers in states or even countries you’ve never sold to before. These new jurisdictions will have different sales tax rates, rules, and processes that you’ll need to abide by.
- Though every fall and winter can bring the possibility of surpassing a nexus threshold due to increased holiday sales or hiring seasonal staff in new jurisdictions, the increases in online sales we expect to see in the 2021 holiday season mean you’ll need to keep an even closer eye on your nexus.
- Come January, when you’re handling merchandise returns from buy online, pickup in store (BOPIS) purchases along with other types of sales, be sure to keep tabs on sales tax from all returned goods in order to get the full amount of tax credit owed to you.
Tip 2: Optimize Your Ecommerce Site to Provide a Seamless Buying Experience
Last year, 95.7 million Americans shopped online between Thanksgiving and Cyber Monday, up 44% from 2019. This year, nearly half of U.S. adults said they’re more interested in shopping online for the holidays compared with last year. In fact, sites offering store pickup may see a 90% increase in digital sales over the previous holiday season.
You’ll want to be aware that having more online shoppers could increase the likelihood of your site turning sluggish or your shopping cart system crashing. Optimizing your ecommerce site with an acceleration solution will help ensure it’s ready to handle additional traffic, dramatically speed up page load times, and optimize the delivery of rich imagery and content that drives engaging and smooth shopper experiences.
Tip 3: Provide Convenience Across All Channels
If you’re one of the 82% of retailers focused on improving the shopping experience, it’s Desktop still dominates, but retailers now generate 42% of their online sales from mobile devices. Mix in click-and-pick options like BOPIS and curbside delivery, and omnichannel retailers will need to make sure their platform provides a seamless and convenient experience regardless of which option a consumer chooses. An order management system is one way to coordinate order processing across sales channels.
Tip 4: Harness Creative Sales Strategies
A holiday season like no other calls for fresh ideas. Instead of offering one-day discounts on in-store products, consider offering online promotions spread over multiple days. Start advertising special offers earlier in the month to reduce traffic spikes on Black Friday and Cyber Monday. Providing mobile payment options like Apple Pay and PayPal can lower wait times at checkout. Social platforms like Facebook and Instagram can be additional viable sales channels, as well as great ways to connect with customers. Research shows 58% of consumers are comfortable with buying goods via social media rather than a company’s website.
Tip 5: Don’t Let Returns Cut into Revenue
More than a third of Americans return holiday gifts. Be sure you’re set up to process online and in-store returns accurately. Merchandise returns also affect your sales tax filings. Many states allow you to claim refunded sales tax on an amended sales tax return. They will usually then apply the amount as a credit toward a later payment.
Holiday Readiness
While preparing for a holiday shopping season like no other, make sure to cover all your bases and avoid the risk of expensive audits or unsatisfied customers. That’s why we partner with Avalara to help our clients with all their sales tax compliance needs. In one year, Avalara saw an increase of 13.5% in API calls by customers (737M to 837M). Impressive, right?
Ready to learn more about preparing for the 2021 holiday season? We’re here to talk.
