Connected Commerce: New Terrain for Retailers and Tax

Retail sector innovations have profound implications for how indirect tax teams operate. Right now, the industry is morphing at an astonishing rate. Retailers are reimagining the customer journey by delivering “connected commerce” – seamlessly integrating online and offline channels to further enhance the shopping experience. 

A report from Winterberry Group takes a deep look at this integrated retail strategy. Tax leaders share common goals with connected commerce architects—like aligning budgets, strategies, and operations across silos, and integrating data and technology to boost transparency and efficiency. The report assesses how the strategy is evolving, how retailers are investing in connected commerce technologies and how much success they have achieved in use cases.

In terms of what’s driving the move to a connected approach, the report points to some prevalent needs, including:

• Meeting customer expectations for a cohesive, minimal-effort experience: Connected commerce blurs the lines between physical and digital shopping. It accommodates customers’ preferences and behaviors across all touchpoints, including online and in-store activities as well as the use of mobile apps.
• Acquiring and retaining new customers more easily: Retailers can leverage data across channels to develop highly targeted campaigns with data-based insights about individuals’ preferences and purchasing history.
• Targeting marketing spend more accurately: Connected commerce helps companies reduce duplicated messaging and conflicting promotions across channels, limiting customer confusion and brand switching.
• Unlocking long-tail opportunities: With a connected approach, sellers can more easily offer niche or specialty items, or products with limited availability.
• Enhancing the view of the customer journey: In traditional models, the view of the funnel is often fragmented or incomplete. Connected commerce lets retailers see the entire journey – from initial engagement to interactions with promotions, to purchase.
• Preparing for the future of retail: Companies can stay ahead of customer expectations and align with new shopping trends and systems, such as AI and data-driven technologies.

As I note in a recent post on retail innovations, “seamless” commerce is an important priority for retailers. It enables them to develop a holistic perspective of the shopping experience that encompasses some key questions for consumers: “How convenient is it to shop and purchase? How long does the checkout process take? How easy is it to return items?” Sellers are responding with innovations such as "Scan and Go" applications that enable customers to complete a purchase while bypassing the traditional checkout process. 

As connected commerce continues to evolve, tax leaders can expect further ingenious innovations that will help retailers craft a more exciting and satisfying customer experience.