The New Retail Revolution

E-commerce is growing fast. So is tax complexity.

U.S. e-commerce sales topped $1 trillion in 2022 for the first time ever, growing 11% year over year. Mobile now accounts for nearly 40% of digital commerce dollars. B2B companies are shifting to direct-to-consumer models. And holiday online spending crossed $230 billion. The pace of change is extraordinary, and it is creating real pressure on tax and finance teams.

What's driving the shift

Several forces are reshaping the retail landscape at once. Consumer habits that formed during the pandemic have become permanent. Social commerce, connected TV and marketplace platforms are opening new sales channels. Supply chain disruptions are forcing retailers to rethink sourcing and fulfillment. And mergers and acquisitions are accelerating market entry, bringing new systems and data challenges with them.

New channels mean new tax obligations

Every new market, platform and business model introduces indirect tax complexity. Retailers selling across state lines face economic nexus thresholds, hundreds of local jurisdictions and ever-changing rates, fees and tax holidays. Cross-border trade adds import, export, and sales and use tax requirements on top of that. As Peter Olanday, Director of Retail Consulting at Vertex, puts it: keeping up with those changes is essential for retailers to thrive, especially those that have scaled quickly without the internal infrastructure to manage it.

Automation turns compliance into a competitive advantage

Manual tax processes can't keep pace with the speed of modern retail. Automation reduces errors, lowers overhead and frees your team to focus on growth. A unified tax engine (one that integrates with your existing business systems, including SAP) gives you a single source of truth for tax determination across every channel. That consistency reduces risk, simplifies M&A integration and eliminates duplicative tools.

Better data leads to better decisions

Accurate tax analytics help you forecast liability, reduce cash reserves held against underpayment and make smarter decisions as you enter new markets. An integrated, end-to-end solution keeps rates and rules current so you're not caught off guard by legislative changes.

Vertex works with retailers of all sizes to make tax compliance a seamless part of doing business, not an obstacle to growth. With the right technology and strategy in place, you can expand confidently into new channels, geographies and business models.