Setup Your Organization for Long-Term Growth

Episode 6: Achieving Frictionless Commerce Podcast Series

Vertex Automation for Tax

Episode 6 Summary

The final episode in the Achieving Frictionless Commerce podcast series wraps up with all of the information IT professionals need to think about moving forward. Featuring expert advice from Vertex’s Peter Olanday, Director of Retail Consulting and Robin Allen, Senior Director, Agile Program Management – Corporate IT, they discuss what retail IT professionals can expect in the future including predictions for the customer’s online shopping experience and how these changes must be looked at from both a technical and a business-focused mindset. 

Introduction (00:05): Welcome to Achieving Frictionless Commerce, a podcast series brought to you by Vertex, where tax and IT experts discuss how you can create a frictionless buying experience that will better support your customers and drive future growth for your organization—as well as the surprising way that tax plays a part.

Jeremiah Owyang (00:28): Developing a smooth customer buying experience is a necessity for today's businesses—it's no longer an option. For IT leaders that are challenged with making this happen, the good news is that there is help out there. 

Welcome to Achieving Frictionless Commerce. My name is Jeremiah Owyang, a technology analyst and entrepreneur based in Silicon Valley and your MC. Join me and my guests, experts from Vertex, a leading global provider of indirect tax software and solutions in our six-part podcast series. Together, we will discuss what that term means right now, what you can do to minimize any barriers in your customer journey and the best steps to take that will lead to long term organizational growth. We will also take a deeper dive into the somewhat surprising ways tax plays a major role in reducing friction and give you a powerful example of one retailer who used tax software to do just that.

Jeremiah Owyang (01:28): Today, I am joined by two people who are no strangers to this show, Pete Olanday, Director of Consulting - Vertical Solutions at Vertex, and Robin Allen, Senior Director of Agile Program Management and Digital Transformation and Change Management at Vertex. The duo joins me live today to discuss ways to successfully set your organization up for long term growth. So, let's jump in.

Jeremiah Owyang (02:00): Welcome to the show again.

Robin Allen (02:02): Jeremiah, it's good to see you.

Jeremiah Owyang (02:04): Hey, Pete.

Peter Olanday (02:06): Hi, Jeremiah. Thanks for having me.

Jeremiah Owyang (02:09): Pete, I have a question for you. Let's start off by talking about what we're seeing. Can you tell us about today's shopper expectations?

Peter Olanday (02:18): Absolutely. You know, it's obvious that there, there was a shift because of the pandemic. And even prior to that, a shift from physical to digital commerce-

Jeremiah Owayng (02:27): Mm-hmm.

Peter Olanday (02:27): People are shopping more and more online. And brick and mortar became less and less appealing, and then even more so during the pandemic. So as a result of that, what we're seeing is customers here have become more tech savvy than they ever have. So those that were maybe averse to shopping online, or doing things online, or doing things on their mobile phone had to do it out of necessity during the early months of the pandemic when everything was closed. So, they've just evolved from a technological standpoint.

Peter Olanday (02:57): The customers are also more informed than ever. Just by nature of being online, you have access to more product information than you ever did. It's not just the label on the physical item that you... in the aisle of the store. You can go read product information from the manufacturer themselves. You also have access to customer reviews. So, what are other people saying and thinking about that product and how do they feel about it? So, there's more informed customers.

Peter Olanday (03:23): Well, and now, you know, obviously they have more options than ever. They can buy from anyone on the planet essentially, and not just from the local store. They can use more hybrid models. Almost every retailer nowadays has both an online presence as well as a physical presence… and they use that in different combinations. Now, we're starting to see the mixing and matching, buying online, picking up in store, or going to the store and ordering it online. So, there's different combinations of things how people can interact with a retailer.

Peter Olanday (03:51): Another thing we noticed is that there is no peak season anymore. Yes, there's a Black Friday, there's a Cyber Monday, but people are shopping all year long, because of supply change struggles, because of shipping delays, because everybody's at home and they're just buying things all day long as they think of it. So, there's not a sort of planned shopping outing come November, come December. It's kind of spread out.

Peter Olanday (04:13): Peak times are hard to predict nowadays. Because of all this, they're more demanding for this seamless frictionless experience. They expect their retailer, and I say expect meaning, that it's not just a differentiator anymore, it's an expectation that the retailer knows who I am, they know what I buy, they know how I buy it. I log into a website that I always purchase from [and] it already has my shipping address filled in; it already has my credit card information filled in. So, they know how I buy, they know my tendencies and they're actually anticipating my shopping habits in the future. If I buy a printer, I'm probably going to want or need toner down the road. So, there's this kind of predictive thing where the retailer really is intimately familiar with who I am.

Peter Olanday (04:53): And then finally, there's just more merchandise returns. That's what we're seeing in the retail space is you're buying online, you're not able to touch and feel the product. With clothing, you're not able to try it on so you buy multiple items… similar items with the intent of returning the ones that you don't like or that don't fit. So that's a huge swing. It's a huge change from what we've typically seen in traditional brick and mortar retailer, where returns were more of an exception than a rule. That's kind of the changes that we've seen since the pandemic.

Jeremiah Owyang (05:24): That is a lot of changes, Pete.

Peter Olanday (05:27): Absolutely. It's mind boggling and it's not as abrupt as you think, because we're living through it. But when you look back from this point, say two, three, four years ago, I mean, you know yourself as a consumer, your habits and your tendencies have changed over that time.

Jeremiah Owyang (05:43): Yes. Contactless payments are just about everywhere now, because of the pandemic. So, the consumer behaviors have really changed. Robin, I'd love to get your take. What does this mean to the IT professional?

Robin Allen (05:54): Yeah. So, I was listening to Pete describe that shopper today. There's some things that from an IT perspective that I should be listening for or paying attention to as we provide service to ultimately that customer. [When it comes to] frictionless commerce, I think about patience. I think about options. So maybe before I was only considering one or the other, now I have to support multiple options.

Robin Allen (06:19): In a previous podcast, I touched upon those “ilities”. If you think about and connecting those “ilities” to some of the things that Pete was saying. So Black Friday, Cyber Monday still exists, but I can shop anytime I want as a consumer. Therefore, I have to have reliability, I have to have scalability. If Amazon decides to announce a big sale or something outside of, let's say Cyber Monday, they don't necessarily tell you that it's coming, but you need to be prepared. So, all of the things that Pete was alluding to as a preparing for the customer's experience are things that I should be listening to and paying attention to. He mentioned the shopping cart, and if I go to the cart and my information being there and all that convenience. Well, also in the “ilities” I talked about security and data, knowing what I'm buying, knowing what's of interest to me as an individual, not sharing what everyone else is buying. I don't care what everyone else is buying. I only care what I'm buying, right?

Robin Allen (07:21): So, there's definite connection points to that experience that the customer expects and to what we should be doing as IT professionals and providing stable, secure platforms that people can go to, people can rely on, and get what they need.

Jeremiah Owyang (07:36): Robin, you're bringing up a great point. And I like how you talked about the “ilities”, which are really the attributes of a resilient, or flexible, or agile organization, because all of the things that Pete mentioned, there's going to be more changes. That's just the start, you know?

Robin Allen (07:49): Correct. We're not done.

Jeremiah Owyang (07:50): We're not done. I mean, the world is continuing to fluctuate even at a faster frequency. So, the points you bring up are absolutely on point.

Robin Allen (07:58): And I think Jeremiah too, it's not just what it is today and the future, it's that again, the world changed. And again, I want to reemphasize this idea of what options feel like to me. And what options felt like to me before, even two years, two, three years ago is very different than what it is today. And Pete highlighted… I go to a store, I sit in the parking lot, I'm not going physically in the store, but I can go to the store and get the outing. However, I can go in the store and get something and have it shipped to my home.

Robin Allen (08:28): All of that just continue to evolve. Like you can go to a restaurant, and you can do the same thing you used to. You could do in a store, sit in the parking lot, and have someone bring your meal. Those are all changes that will need to still exist coupled with, “I want to go back into the store and pick up my meal.”

Jeremiah Owyang (08:45): Yes. Those changes are here. Now, let's talk about our friends, the retailers. Pete, what do you think the next big disruptor will be since we are just teeing that conversation up for you?

Peter Olanday (08:54): Yeah. I mean, it's tough to predict, but we can kind of start with how are we coming out of this pandemic? The changes are still happening, right? We're, we're not done with this sort of cycle of the pandemic. So where are we now? You start to see a return back to normal, right? Back to the way it used to be. So, what we're starting to see is things like Netflix and the Instacart… those food delivery services [are] not as popular as they were say a year and a half ago. Experiences in products like Peloton that couples in exercise equipment with an app and a community around it, they're also seeing some decline.

Peter Olanday (09:28): So, you would start to see this return to in person living. You start to see people going back to concerts, going back to the gym and fitness classes. Getting back out there where you're starting to see an increase in people going back to the store. The cycle is coming back to the norm, I guess. And that's what we're facing now. As far as what the next disruptor is, who knows? But the trends are more defined and more abrupt than they used to be.

Peter Olanday (09:54): If you think of that life cycle of the pandemic, when it comes to retail, it started with the panic buy of necessities like toilet paper. And then it flattened down, people got used to it, people stocked up on hand sanitizer and all that stuff. And then it was a swing in the months of 2020 into outdoor activities. We couldn't find a bicycle or a kayak or camping equipment at the sporting good store anymore. Everybody's trying to get out, but still stay socially distant.

Peter Olanday (10:19): And then going into 2021, we saw trends in luxury items. Like I've been stuck in my house for a year, “I'm going to treat myself to nice clothes, some jewelry, some things for me, not things that I need to have, but things that I want to have.” And then now we're at a place where travel is starting to pick back up again. We've all read and heard about the airfare and air travel, and we're starting to see it really swing abruptly from one trend to another. It used to be a very gradual thing and you had to do a lot of data analysis to figure out what exactly is driving the change. We're starting to see these abrupt swings in customer behavior, and we're starting to see things at marketplaces really take off. So that's kind of the next big thing. It was already trending before the pandemic, but now it's really come to the forefront for some retailers who may not have a strong online presence themselves.

Peter Olanday (11:07): Some of the things we can expect moving forward are retailers trying to anticipate what that disruptor is. Being in a position and being a mature enough organization that you can be proactive and not reactive, and actually use these things as opportunities. Creating a whole shopping experience in a digital world is very challenging compared to a physical world where a customer walks into my store and I can create this whole experience. If I'm a sporting good store, maybe I have a rock-climbing wall, maybe I have a track that I can try on some running shoes, but how do you recreate that in an online world? So, you have to differentiate yourself. You have to really be on point with your branding.

Peter Olanday (11:41): Other challenges… impulse buying. So, when you're going into, into a store and I go checkout, all that gum, candy, magazine stuff at the end of the checkout that people just grab while they're standing in line… how do I reproduce that in an online world? You start to see retailers like Amazon do that. When you checkout, it says customers who bought this often buy this and things like that. So, it's kind of trying to reproduce that experience, but that's going to be a challenge going forward.

Peter Olanday (12:06): Obviously, retailers are trying to provide more and more options, but with fewer clicks. And in the spirit of frictionless commerce, it becomes very challenging. I want to provide an experience, I want to provide more options, I want to provide more capabilities, I want to further differentiate my brand, but I need to make my shopping experience or keep my shopping experience as seamless and as frictionless as possible.

Peter Olanday (12:27): So, what does that mean? It means the re-imagining of the role of the physical store. We've talked about the demise of the shopping mall and the footprint of stores maybe getting smaller, maybe they're being used as distribution centers instead of just your traditional brick-and-mortar. Maybe they're used as showrooms where I purposely don't have everything in stock, but I have a sample of everything that I sell. So, a customer can walk in, play with a new electronic gadget, or try on a certain style of shirt, but ultimately at the end it's just shipped to your home.

Peter Olanday (13:00): Retailers are getting creative, and they have to meet the customer where they want be met and shop the way they want to shop. There could be new channels that aren't even imagined yet. Like who knew years ago that social media would be a commerce platform or a video game would be a commerce platform? I talked about this, I think in the last session is IOT and being able to buy a jug of milk from my refrigerator if it was a smart fridge. There's all these things that, you know, who knew would exist years ago.

Peter Olanday (13:27): I'm sure there are things, there are things going forward that we haven't even dreamed of yet. So, retailers need to be—to Robin's point all the “ilities”—flexible, scalable, and they have to be nimble. They have to be able to pivot really quickly and leverage their brand, their capabilities to meet whatever the next disruptor is, whatever the next consumer behavior changes, and just be able to continue selling. That's the end of the game. So, it's tough to say what the next disruptor is.

Peter Olanday (13:58): There are things like cryptocurrencies. Who knows how that's going to affect how retailers take payment. Delivery services are always evolving into more than just food. They've expanded to pet food and pet supplies. I've seen some that offer office supplies. So, who knows what else these delivery services are going to start providing?

Jeremiah Owyang (14:18): Those are great predictions. And I'll add to that. I track these trends too as a technology analyst to build off your great points like self-driving cars, they could come to your house, and they could have the store inside where you make the product selection right there. Or we know that there's a large eCommerce player that has a patent for drone delivery of packages to your backyard or roof.

Jeremiah Oywang (14:39): I like your point on cryptocurrency. By the way, there's significant tax implications because you have all these different flavors of currency that need to be swapped. Definitely going to need a seamless experience right there. Even with the rising fuel prices, that's going to start to impact logistics in all directions and even the price and the way goods might be bundled.

Jeremiah Owyang (14:57): And of course, the big one, metaverse shopping. You mentioned virtual and online experiences, but will we see a retailer or maybe even a CBG or a brand directly build a metaverse where people go in and shop? Wow, that's a lot of things for companies to think about.

Robin Allen (15:13): Yeah, we need to be nimble. If we're not, it makes it extremely difficult for us to compete. And that list that the both of you just gave… I'm sitting here, I'm thinking, wow, like there's a lot of stuff. And then, of course, Pete says, and there's this stuff that we don't know. Pete said it also, we have to be proactive, not reactive. We all know that when we're reactive, it can be very expensive, it can be time consuming and potentially a lost opportunity.

Robin Allen (15:39): Jeremiah, you mentioned this idea of agility and how the cloud and services in the cloud. I would argue that years ago, people were still a little hesitant about the cloud. But I think as a technical person, you need to have a business perspective on things, not just a technical perspective. So doing everything yourself isn't the best way. And leveraging the goodness of the world… that because of all of the disruption and because of all the changes that there's more at my fingertips than there was even five years ago that I can choose from to make decisions to support the business.

Peter Olanday (16:15): Yeah. And the reaction time has to be increasingly fast. It's not just the disruption, but it's how fast it disrupts.

Robin Allen (16:21): Yeah.

Peter Olanday (16:22): We knew five years ago that shopping malls weren't going to be around forever. We saw the writing on the wall, right? We saw vacant store fronts in the mall. Then one day in March of 2020, everything just shut down.

Robin Allen (16:31): Yeah.

Peter Olanday (16:31): Everybody had to go digital and then the malls were closed. So, what do we do now? Now we have to scramble to beef up our eCommerce capabilities, our capacity.  What if all of my customers decide to place an order on the same day, which is exactly what happened. So, it has to be elastic enough to, to be able to do that.

Robin Allen (16:50): You saw that there are places that closed, that couldn't make that transition, that weren't nimble. I mean, you literally saw companies go bankrupt or closed the doors because they, for whatever reason, hadn't pursued out online and couldn't react. Once as you said, in one day in March of 2020, we said everything is closed.

Jeremiah Owyang (17:11): Robin, let's just go further into your comments around cloud. How could a company set up their business for success given all of these changes in the desire to be agile?

Robin Allen (17:20): Yeah. That doesn't have to be one or the other. I think that kind of gathering information, understanding your environment and your culture. Jokingly, I said years ago, the cloud wasn't secure, or the cloud wasn't fast enough. People had these ideas that letting go of something would mean as an IT professional if I'm not doing it, then no one else can do it better. So really being strategic in your thinking about what it is that you are and what you want to do best. Understand and assess technical architecture, tools, processes, and people because again, you don't have to do everything yourself. You have to know how to partner selecting technology and partnering so that you can make good decisions.

Robin Allen (18:04): Shifting perception of the organization. As I said, everyone thought the cloud was like, “Oh no, you can't go to the cloud.” And literally, in addition to the door shutting on March 20th, when we couldn't go to the stores, people were also scrambling to go to the cloud. Because their departments could not… they couldn't be nimble, they couldn't scale. And then they found this may be a little bit more difficult than I thought, and I maybe should have been thinking about it a little bit sooner.

Robin Allen (18:31): Understanding the financials. So, it's a different model when you're buying something and you're investing once or once every but so often, versus a cloud model because the subscription based and all the things that we use as a user now comes into play when you're buying technology or infrastructure at scale. So, understanding that shift in being able to build your financials. Pete was mentioning internet of things (IOT)… you literally can buy most things on the internet. You don't have to, again, do everything yourself.

Robin Allen (19:03): In general, just being open to adopting new ways of thinking, because you do have to be creative. If I don't know what's coming, if I need to be nimble and I want to be able to react in a proactive way instead of a reactive way, I have to be open to new ways of thinking.

Jeremiah Owyang (19:20): I have learned so much from both of you, not in just this podcast, but in the prior. And I'm just grateful for your time. Pete, I'd love to hear from your expertise, how can Vertex help with frictionless commerce?

Peter Olanday (19:33): We provide options and I think that's the bottom line for retailers is they need to have options to calculate tax, how they want tax calculated. They want see their data, how they want see their data. And it can be from various sources and be seen on different platforms. So, we provide both on-premise solutions. So, if you're a traditional on premise, you want to host it in your own data center, we absolutely have solutions in our application will run in that traditional way. But we also provide cloud solutions so that you can take advantage of all the things in a SaaS and a hosted type of model, where you let someone else worry about the infrastructure. You let someone else worry about the elasticity of the capacity for peaks and valleys in the data volumes of reporting on transactions and things like that.

Peter Olanday (20:21): And then we provide those options in hybrid models. So, if you want some of our solution in the cloud, but if you have 2000 brick and mortar stores, is it realistic that they all call the cloud for tax calculation on every transaction that comes through your cash links? Probably not. So, there's an on-premise component that we can provide in the store that provides the best of both worlds. It's controlled centrally by your tax department in the cloud, but the actual tax calculation engine, and all of the collection of the data from a taxes charge perspective, will sit in the store location and then sync up as a batch routine. For example, in a nightly store closed process is upload all those transactions in, download any kind of any new rates and rules, changes in taxability, jurisdictional changes, etc.

Peter Olanday (21:07): So, you can use that in combination. It kind of mimics the way that the retailers are reacting to their own customers is that they need to be able to meet people in person as well as remotely and we mirror that… is how does the retailer want to utilize or how does it need to have a tax solution in place, partly in the cloud, partly on premise, somewhere in between. That's sort of in a nutshell, what we provide, and we think is a huge differentiator.

Jeremiah Owyang (21:32): I want to say, thank you so much to Pete Olanday and Robin Allen for joining us on the show today to discuss ways of successfully setting up your organization for long term growth. If you have enjoyed listening to Achieving Frictionless Commerce and want more information, you can visit Vertex Inc, that is vertexinc.com to find out more. This has been Achieving Frictionless Commerce from Vertex. I'm Jeremiah Owyang, your MC, and thank you for listening.

About the Podcast Series

Are you a retail IT professional who is looking to learn more about frictionless commerce and how you can achieve that within your organization? If so, check out the Achieving Frictionless Commerce podcast series! Hosted by technology analyst and entrepreneur Jeremiah Owyang, experts from Vertex discuss what frictionless commerce means today, how you can discover and overcome roadblocks, and what you should do to prepare for future retail growth.

Featured Speakers

Robin Allen, Vertex

Robin Allen

Senior Director Agile Program Management – Corporate IT

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Robin is Senior Director at Vertex Inc. and holds both the leadership and management roles in the Corporate Information Technology organization, responsible for supporting and enabling agile technology projects across the organization. Previously, she was the Senior Director of Commercial Software Development and Cloud Program Management respectively at Vertex. She is an accomplished information technology executive with over 20 years of experience. Her wide range of experiences includes strategically leveraging technology for key business initiatives. She is creative, adaptable, and skilled in cross-cultural communication and critical thinking. Before joining Vertex, Robin was a virtual Chief Information Officer at Contigex. As the Chief Information Officer, she provided oversight of people, processes, and technologies within the company’s IT organization to ensure they delivered outcomes that supported the goals of the business. She actively participated in key client committees, cabinet, and Board-level meetings, ad-hoc advisory groups, institutional/community activities, and planning committees, as well as advising the status of technologies as they pertained to strategic goals and objectives. Robin has a Bachelor of Business Administration (BBA) with a concentration in Management Information Systems and a minor in Psychology from Iona College and a Master’s in Business Administration from Villanova’s Executive MBA program.

Pete Olanday

Pete Olanday

Director, Retail Consulting

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Pete Olanday is Director, Retail Consulting, responsible for the integration of Vertex's Indirect Tax solutions in the retail space, specifically with Point-of-Sale systems and e-commerce platforms. Prior to joining Vertex, Pete worked for IKEA and EY. Pete has a B.S. in information and decision sciences from Carnegie Mellon University.

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