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Avoiding Disappointment This Holiday Season

Guest Blog by Tamara Saucier

The National Retail Federation (NRF) predicts holiday sales will increase 3.9% this year. Last year the average holiday shopper spent $423 during Thanksgiving weekend alone. The holiday shopping season seems to start earlier and end later every year. And each year seems to bring new legendary tales of “must-have” items such as the Dancing Mickey Mouse, Zhu Zhu Pets, and Cabbage Patch Dolls.

In recent years, retailers have extended their focus on customers, attempting to bring the customer experience to new levels. But despite these efforts, as a consumer we more often than not come up disappointed. How many times has your holiday included one of these scenarios?

  1. “Sorry, the store was out but here’s a gift card so you can get it later.”
  2. An envelope with a cut out picture from a catalog and note saying, “This is supposed to arrive next week.”
  3. A substitute of what you really wanted with the gift giver stating, “I looked everywhere but couldn’t find it available.”

Retailers are in an extremely competitive environment and must be able to deliver on the year-round promises they are making to their customers. Recognizing that planning for the holiday sales season is part science and part art, what can a diligent merchant do? Here are a few tips for avoiding customer disappointment.

Know your sales trends – and be able to respond effectively

This means understanding your customers’ tastes and buying patterns, and mirroring that on the back-end of the business to ensure products can be delivered according to the needs and wants of the consumer. If you’re offering customized or tailored goods, such as engraved sporting equipment, be prepared. One way is to engrave or customize goods at the factory, instead of doing it domestically. Even better, if you can create customized sneakers in the factory and ship direct to consumer, you’re reducing time and costs while delivering a great customer experience.

Don’t make promises you can’t keep

A broken promise is more harmful than a promise not given. Know the limits of your customers but more importantly, know the limits of your supply chain. Do you have the ability to ship direct to consumers in 3 days? Is same day delivery possible given the existing logistics architecture? Do you have inventory visibility across all channels of the business.

If retailers can’t answer these questions with certainty, then delivery offers and promises need to be scaled back. There’s nothing worse than being the guilty culprit responsible for a disappointed child on Christmas morning. “The delivery will be here tomorrow” just doesn’t cut it. E-commerce companies like Amazon carved out their niche by “delivering” the goods. They invest heavily in their supply chains to ensure they have the resources and inventory visibility to deliver on their promises to customers. The result? 129 million consumers shopped online last year on Cyber Monday.

Enable full assortment availability to your customer

Consumers expect and demand options. Millennials in particular demand goods that are new, shiny and different. The “wow” factor is huge. Capturing this audience requires smart assortment offerings with options. This means being able to deliver what they want, when and where they want it. Consumers will remember it if you can provide real availability with confidence. But again, this requires inventory visibility.

Something we’ve all learned the hard way: There’s nothing worse than unmet expectations during the holiday season. Retailers who get it right and deliver on promises will be heavily rewarded this holiday season.

 Tamara Saucier is VP Industry – Retail Solutions with GT Nexus

To Touch or To Gesture – The On-going Battle Between Two Competing Technologies

Guest Blog by Lenny Kleyman

If you had to choose sides, would you support gesture-based or touch-based user experiences as the best practice for interactive digital signage at retail?

This isn’t the first time we as a digital society have been asked to choose sides. We’ve decided the fate of VHS and Betamax, Blu-rays and HD-DVDs, Facebook and Myspace, just to name a few. And now we have been asked to choose once more, to gesture or to touch.

From a technical standpoint, both technologies are now feasible on large and small experiences alike; however, they are not interchangeable by any means which makes the decision that much harder.  At Infusion we’ve implemented both.  Here are decision factors.

TOUCHSCREEN

Let’s talk touchscreens first. The best type of technology will depend on three factors in order of priority:

1. The size of the touch area.

2. The number of simultaneous touch-points.

3. The environment it’s being installed into.

Touch has a lot going for it out of the gate:

  • There is a higher adoption rate due to familiarity of the technology.
  • It’s more intuitive.
  • Touch engages users in closer proximity to the device.
  • There’s greater accuracy and quicker selection.
  • It has a lower risk in an uncontrollable environment.
  • Touch leaves less room for interactive error.
  • It behaves similarly to a mouse-click relative to UX design principles.

Yet touch also has a variety of cons…

  • It can be mildly unsanitary for public consumption.
  • It does not allow for skeletal/gesture recognition.
  • The screen size will limit the number of touch-points as well as the environment where it can function.
  • The price for hardware is high.
  • There’s a lack of flexibility for re-application or screen size changes.
  • There are involved maintenance and replacement factors.

GESTURAL

In regards to gestural technologies, most hardware components in Microsoft’s popular Kinect, Mesa Imaging, Panasonic and HD webcams require some form of middleware or SDK to interpret movements as gestures. When talking gesture there are several priority factors to consider right out of the gate such as the environment it’s being installed into, the expected number of simultaneous users, and the complexity of the gestures and gesture types required to create a great experience.

It has many pros:

  • Gesture allows for skeletal/gesture recognition.
  • It provides more immersive interactive experiences between users and applications.
  • Gesture may be considered more “fun” to use.
  • It can track multiple users.
  • It’s flexible to any screen size.
  • You get enhanced ease of installation and integration.
  • There is easier maintenance and replacement.

On the other hand, gesture technologies…

  • Have a small, but real, learning curve for the general population.
  • Require users to stand at a specific minimum range in order to be picked up by a sensor.
  • Are not as precise in user experience navigation and selection.
  • Run the risk of interrupted user experiences because of constant sidewalk traffic when deployed in metropolitan areas.
  • Are impacted by environmental conditions such as rain, direct sunlight, and clothing, which can affect accurate tracking of users.
  • Require more development and testing.

In the end it all boils down to two overarching questions:

  • What is the intended user experience, and
  • What is the environment surrounding the experience?

TOUCH interaction provides overall greater accuracy in selection and is projected to have a higher user adoption rate due to the general public’s familiarity with the technology. Application development and UX design tend to stay in scope, though hardware cost and installation are typically much higher than the gesture solutions.

GESTURE interaction may afford greater opportunity for cutting-edge interactive elements and experience design, but keep in mind application and UX development will require additional time for design and testing up front. However, long-term hardware cost, installation, and maintenance will be significantly lower.

So which reigns supreme?

As you may have figured out by now the answer is not that simple. I don’t believe there will ever be a clear winner between gesture and touchscreen technologies because each has its place in today’s swiping, waving, and flicking society. We have evolved from punch cards to keyboards, from the mouse to touchpads, and now to touchscreens and gestures. The true deciding factor is the type of experience you intend the user to have.

But one thing’s for sure, if brands want to stay ahead of the curve, they should plan for beautiful and intuitive applications utilizing either gesture or touch. Simply looping video and static images is right up there with Betamax, HD-DVD, and myspace, all now relics of the past.

Lenny Kleyman is an Innovation Producer at Infusion

Sharp Data Is Key to Shaping Black Friday 2.0

Leveraging Customer Insight to Keep Up with the Evolution of this Holiday – Guest Blog by Dr. Matthew Green

Black Friday is in a fast – and even violent – transition.  While some customers are waiting in line to rush the doors, others are taking a more mobile-approach and expecting deals throughout the holiday season.  Retailers are changing as well with sales creeping into Thanksgiving promotions and heavy discounts emerging ahead of Black Friday.

According to a recent column in TIME Magazine, “the act of physically shopping on Black Friday is on the decline” and “undeniably losing its importance in the marketplace.” Mobile shopping and sales days like Cyber Monday are diluting the spike of this one day Armageddon, allowing consumers to skip the lines and arm-wrestling for that coveted toy.

A new generation and buying power is unquestionably influencing Black Friday.  And retailers are looking to be part of this economic tradition.  So how can they keep up?

Black Friday offers a unique opportunity for retailers as customers provide deep data footprints and insights into their holiday shopping expectations.  The key to reshaping one of the most important sales days of the year is in that data – it all depends on if it’s interpreted correctly.

Reset the Way You’re Reading the Data

The holiday season delivers data in troves and bows. Whether it’s in-store or online, your customers are telling you what they want, who they’re buying for, and what they expect from retailers. As consumers begin to spread their holiday purchases over a much broader period, it’s important to know why they chose you and that insight is in the data.

Black Friday is great time to reset the way you’re reading data.  Clear your vision path and focus on what you really want for your customer relationships and loyalty program.  Are you focusing on the most important data to achieve that objective? Is your organization distracted by other data points that have emerged?  Remind everyone of what really counts.  Tap an outside data counselor to help refresh this, if needed – it’s essential to getting it right.

Improve Your Data Interpretation

Shopper data has the potential to unlock significant insights ahead of Black Friday, but interpreting it from the wrong angles is a lot like using Google Translate to prepare a proposal written in English for your colleagues in Japan.  It just won’t make sense.  Yet, we see it happen often, particularly with loyalty programs and data-rich seasons like the holidays.  Driving ROI from Black Friday data means mastering the interpretation of the information already in place and using it to build on the customer relationship. By leveraging exiting data and your team’s renewed training, retailers can provide relevant deals in the face of online competitors and – finally – create the personalized experience holiday shoppers are looking for.

Your most loyal customers will turn to you first when scouring the mall for the best Black Friday deals. According to a recent PWC study, which measured the experiences of about 6,000 U.S. consumers across 11 industries, consumer loyalty is “strengthened by shopping experiences that forge powerful psychological connections, and not by points or rewards programs alone.” Revamp direct mailers and holiday store layout to reflect products that customers want to buy during the season at the prices they are looking for.

Retrain In the New Year

If you’ve refreshed your read on data and focused on proper interpretation, you’ve opened the door for significant change and improvement on how you act on your customer insights.  Black Friday 2014 is just ahead – and you’ll go through sales cycles like Back-to-School to get there.  Resolve to read and act on data better in the New Year.  Retraining your team is pivotal to making that important upgrade. And after the holiday rush is gone, evaluate training for your team to evolve with your loyalty program.  Analyzing and acting on Black Friday data and insights requires a constant evaluation of team training and skills to maximize return – especially when the investment is as important as it is for the holiday season.

Dr. Matthew Green is the Managing Director for emnos U.S.

Black Friday is Important, Just Not For the Reasons You Might Think It Is

Guest Blog By Steve Russell

The first thing you should know is this: Most of what you believe about Black Friday isn’t true.

The second thing you should know is that it doesn’t matter.

We’re told that Black Friday is a consumer madhouse, that it’s the day where people run over each other for the sake of a half-price microwave. We love the narrative of the sales-crazed shopper, but what about the story of Black Friday itself?

We’re told that Black Friday got its name because it’s the day that retailers start making a profit for the year – out of the “red” and into the “black.” In fact, the name was coined by Philadelphia policemen who dreaded the massive amount of pedestrian traffic and traffic jams that always followed Thanksgiving.

And we’re told that Black Friday is the biggest sales day of the year. With all those low prices and once-in-a-lifetime deals, how could it not be?

In fact, from 1993 to 2001, Black Friday fell between the fifth and tenth busiest shopping day of the year. It didn’t become the “official” busiest shopping day until 2003, where it’s remained at the top spot more or less ever since.

But Black Friday is changing. Retail is changing. As is the entire holiday season.

Just last month, Macy’s and J.C. Penney announced they are kicking off Black Friday on Thanksgiving, breaking from tradition and opening one day early. As the retail landscape evolves — and savvy customers hunt for deals online, on mobile, and on foot — we’re going to see more change happen more often.

But here’s one thing that won’t change: Retailers want better results than last year.

Which is why regardless of history, the objectives for Black Friday remain the same. You want to get the most people in the door as possible. You want to verify that your employees are engaging customers and getting products into their hands. You want to ensure that your end caps and displays are effective, and that signage and store layout drive increased conversion.

Black Friday and the following weeks are the perfect time to test your strategies for the rest of the holidays, and ensure your stores is prepared for success. Here are three ways to be successful on Black Friday and beyond:

  1. Be on plan: It’s hard to overstate how much timing and thought has gone into store design. Make sure that every one of your stores is on brand, with the proper displays, signage, and merchandise for the season. Tools like Prism Skylabs enable retailers to remotely look into their stores, and ensure that everything is as it should be.
  2. Optimize your stores: Black Friday comes with significant customer demands and maximum competition from other retailers. It’s an ideal time to understand which end caps, promotions and displays engage your customers, so you can see what’s working and what’s not — and make meaningful adjustments.
  3. Deliver for your customers: Holiday crowds demand an increased focus on the customer. Make sure you have the appropriate resources to meet the needs of every person who enters your store. Visual analytics such as heatmaps can help you determine where to best position your employees for success.

As omnichannel retailing continues to gain momentum, Black Friday will keep evolving. In the meantime, all retailers should see Black Friday as a day to drive sales and improve the customer experience.

Steve Russell is CEO of Prism Skylabs

Beyond Holiday Ads and Displays: What Can Retailers Do to Ensure Success this Holiday Season?

Guest Blog by Doug Pasquale

The holiday season can never be too long for retailers, but this year presents a unique challenge – only 25 days will be between Black Friday and Christmas to capture peak holiday spending, and every day counts. This critical time can account for 20 to 40 percent of a retailer’s annual sales activity, so it’s no surprise that companies have debuted holiday displays, discounts and ads as early as September in an attempt to make the most out of this key period. The loss of time is even more critical for electronics retailers, who are already hard pressed to deliver on exorbitant levels of demand generated on the heels of recent major smartphone, tablet and wearable technology launches such as the iPhone 5s, the Nike + Sportwatch GPS, and the Samsung Galaxy Note. Retailers need to explore other avenues to surpass their competition and meet consumer demand.

It’s Not Just September Ads and Tree Displays

Morgan Stanley found that shopping malls featured 20 percent more promotions in the third quarter 2013 than the same quarter last year. However, retailers should consider whether there is a better way to compete during the holidays besides breaking out the ornaments and trees before Halloween candy hits the shelves. Those retailers who operate lean and agile supply chains are better able to keep a pulse on swings in demand, deliver goods quickly regardless of the purchasing channel and ensure product availability. By virtue of a shorter peak season, these advantages become critical game-changers.

Embrace a New Supply-Chain Plan

An effective supply-chain execution can mean the difference between delivering products to consumers or losing their business. While changing operations strategies before the holidays may seem ill-advised, the peak season’s distinctive set of logistical circumstances, delivering and stocking requires a unique strategy. The peak season operations strategy should be tailored to accommodate the higher-than-normal spikes in demand, meaning that back-end and front-end operations must run seamlessly. Retailers should spend time forecasting and planning ahead for supply shortages and expedited shipments and should work with logistics service providers that can help execute the plan. This is especially true for electronics retailers who will be relying on the delivery of many of their products from overseas during a time when ports are notoriously crowded and recent product hype has caused sky-high demand.

Pay It Forward

Adopting a reverse logistics strategy is another particularly useful method to differentiate a company from the competition and to better serve customers during the peak season. Retailers across all industries should take a page from the electronics industry for best practices in creating and running reverse logistics programs. For example, a Best Buy program has recycled 829 million pounds of electronic goods to date. Aside from the obvious environmental benefits, reverse logistics programs can help retailers reclaim and reinvest some of the value of the product that would have otherwise been lost to a landfill. Additionally, consumers receive the benefit of either trading in an old or damaged product for cash or store credit that can be used to purchase a new item at that store.

In the electronics industry, reverse logistics practices are invaluable, since technology turns over at such a rapid pace. By the next major holiday, the brand-new tablet a consumer fought to purchase this year will be out of date. The same can be said for that pair of jeans everyone is vying for this year, or the toys on every child’s wish list. With a trade-in and recycling program, the retailer can salvage useful product parts for profit and the consumer is able to purchase next year’s new must-have. Therefore, it is key for retailers to find a partner with the ability to handle recycling, triaging, repairing and re-selling in one place when setting up a reverse logistics program.

For the 2014 holiday season, retailers should keep in mind that success takes more than ads and displays alone and the right supply chain program can be critical for competing in the marketplace.

Doug Pasquale is Executive Vice President, Logistics Division Ingram Micro North America Mobility

The Holiday Rush: What Businesses Owners Need to Know for Success Around the Holidays

Guest blog by Katie Kregel & Lisa Finholm

The holidays mean many things for many people: quality time with family and friends, last minute shopping runs, an overindulgence in baked goods and time to reflect on the new year ahead. For businesses, it means accommodating customers during the peak time of the year.

As businesses gear up for the hustle and bustle of the holidays, it’s important for us to remember customers will be spending more, which means they’ll need more and expect better customer service than usual. So, how do you prepare your employees mentally for the mad dash of consumers and the high demand of impeccable service while giving them the tools they need to deliver for your customers?

CorvisaCloud recently enlisted Zogby Analytics to find out what consumers are saying about customer service around the holidays. The results are a reminder of how we choose to deliver on the best service this holiday season:

1. What do customers think before they even begin spending their money during the holidays?

At 39 percent, consumers admit great holiday deals may get them in the door, but keeping them as a year-round customer begins and ends with customer service. Unfortunately, 45 percent of customers say customer service is worse during the holiday season.  That means, nearly half of customers go into the shopping season prepared to have a poor experience. This gives us every opportunity to change their minds, to ‘wow’ them with unexpected exceptional customer service. Every customer whose expectations are exceeded is an opportunity for a returning customer.

However, many businesses hire seasonal help around the holidays to meet that increased demand. These employees often undergo expedited training programs and minimal team member development.  Helping your employees understand your goals as a company will help them understand the value they add in assisting a customer from the moment they pick up the phone, enter your building or make that online purchase to the end of their transaction.

Today’s customer is able to research your company from anywhere and with anyone through business review websites, social media channels, and even texting all their best friends asking, “Who’s shopped here? Did you like it?” It’s important your employees understand that one bad experience can suddenly be on a digital newsfeed for thousands of people to read and that one positive experience will have 3 in 10 people sharing your name with others and another 29 percent saying they’ll shop in your store more often.

2. The holiday rush doesn’t end at Christmas. The “period of returns and winter sales” after Christmas is equally as important for customer service.

With 25 percent of customers stating they’re most likely to speak to customer service after the holidays, it’s essential to communicate to employees that the service they provide on other side of the purchase – the return – is just as important. Which means, customers are coming back to your business ready for assistance because something wasn’t quite satisfactory the first time around or simply not what they had on their wish list. Not only that, but this is a perfect time for additional selling to build upon the initial purchase.

When a customer returns a gift, it’s important employees understand that they should not only make the return process easy but to consider it a chance to upsell or encourage an exchange. How? The ability to streamline and organize the holiday chaos with better software, faster registers, great phone systems and communication tools that allow for quick turnarounds. It’s also important to ensure that those tools are easy for seasonal staff to learn and use with minimal training. Customers who are stuck waiting to trade in their unwanted or unsatisfactory item will only get more irritated with long hold times or slow moving, unknowledgeable staff – causing your business to miss out on future business opportunities.

Do your employees have the tools and knowledge they need to succeed?  It’s our job as business leaders to give our employees the tools they need to succeed and our customers the experience they want to come back during the holidays and year-round.

Katie Kregel & Lisa Finholm are with CorvisaCloud, which delivers contact center solutions that help businesses work smarter and make customers happier.

How Technology Can Help Keep You Sane This Holiday Season

Guest Blog By Nick Sprau

By now, if you live in the northern region of the United States, you can feel the fall chill in the air. The lower the temperature drops, the more we anticipate the holiday season approaching. For retailers, this time of year often means hitting sales goals, moving more stock and an additional Advil at the end of the work-week for busy floor associates. As customers come barreling through mall hallways and into storefront doors, retailers should be armed and ready with the proper technology that will help their business have a successful holiday sales season.

The right technology can take a headache inducing period and turn it into one of precision, allowing proper forecasting for staffing, purchasing and additional operational decision making. I often advise our retail customers to invest in technology that will help eliminate unnecessary paper and repetitive processes. With technology like paperless document management the AP/AR department can manage disputes faster and in a more precise manner that eliminates redundancy and errors. Besides enabling a greener environment, paperless document management also drives down cost associated with mailing invoices and purchasing corresponding shipping material. As is common during the holidays, increased transactions mean the flow of invoices, purchase orders and supporting documentation accelerates. Retailers who are armed to handle the increase in paperwork using automation technology can avoid unnecessary headaches.

The success of this prime selling season relies heavily on the effectiveness of the internal financial process and the accounting department’s ability to handle the increased number of purchase orders and invoices through the season. Moving to the cloud has an amazing ability to cut costs, increase productivity and boost revenues, all at the same time. Now is the time for retailers to get smart about how they can integrate cloud solutions into their existing ecosystem. However, companies will not realize the full impact of cloud-based ERP without taking the first step and going paperless.

Retailers should also look to equip associates (where appropriate) with mobile technology enabling secure access to imperative information. For example, Microsoft recently made it possible for salespeople to collaborate and review data by using Microsoft Dynamics CRM Online with their iPads, accessing the solution through the Safari browser. In a similar way, mobile solutions for other ERP capabilities are rapidly evolving. A study by the Mint Jutras research and consulting firm found that 27 percent of 300 businesses surveyed considered access to ERP data on mobile devices to be a “must‐have” service, and 38 percent believe it is “important.” Both of these figures represent a substantial increase from the previous year, in which the respective figures were 19 and 28 percent. Microsoft Dynamics users can take advantage of mobile ERP access today by connecting with MetaViewer through a browser, via either their smartphone or their iPad browser.

Mobility‐enabled ERP cuts across time zones and marketplaces to allow executives to take advantage of any opportunity at any time. Complete customer data and accounting information reside at the executive’s fingertips, and action can be taken in just minutes or seconds. During a time like this, it is imperative that decision makers have the tools they need to make smart choices that will delivers the proper customer services and product in a way that will save time, money and generate repeat business.

By implementing the technology platforms of paperless document management, cloud solutions and mobile ERP, retailers have the opportunity to cushion their stocking with a little extra money this holiday season. Have you implemented a technology service or platform that has streamlined services for your company? Share your stories with us on Twitter, @Metaviewer.

Nick Sprau is vice president of marketing with Metafile Information Systems Inc. Sprau is responsible for developing and implementing Metafile’s international marketing strategy to support the organization’s wide array of document imaging, workflow and management products and services.

Averting Showrooming’s Scrooge Effect

Guest Blog By Jeff Mariola

As the holiday season swings into gear so does competitive shopping with consumers scoping out merchandise in physical stores and then comparison shopping for the lowest price on their mobile device or computer, dubbed “showrooming” In an effort to combat or “embrace” this phenomenon some retailers led by Best Buy have implemented strategies including price matching to convert more shoppers into buyers.  Nobody is winning in this new game, manufacturers, retailers or the customer.

While I applaud retailers’ recognition that mobile technology is here to stay and for building a strategy they can use to their advantage, they are embracing short term solutions at best.  Just as Ebenezer Scrooge clung to his tight-fisted and greedy ways before he was enlightened, retailers and manufacturers need to embrace new methodologies and practices to combat “showrooming” as price matching may have a negative impact on everyone in the purchase stream, not just the retailer.

What’s the Scrooge-factor for retailers?  Sadly, retailers may find themselves matching prices with unauthorized, fly-by-night retailers that have a few units. While the rogue sellers have very little inventory they can impact price matching generated by algorithmic price dropping which results in margin pressure on everybody.    As bricks and mortars begin to match the price with online retailers they will have less money available to promote sales in their stores, maintain the requisite levels of employees needed for great customer service and will drop lines that are no longer profitable.

Ebenezer has a “bah, humbug” effect on manufacturers as retailers responding to the ever decreasing prices below minimum advertised prices or suggested retail prices often look to the manufacturers for financial compensation.  This compensation can come in the form of deductions from invoices being paid, demands for other discounts or other benefits to help subsidize the retailers’ marketing decision to match the lower online price.

The manufacturers’ sales force need to spend quality time promoting the benefits of their products to retailers to ensure the consumer becomes a satisfied purchaser.  The price gauging turns the sales team attention to why one retailer is getting a lower price than another. Ultimately, manufacturers may be forced to only work with retailers who sell their products for the value the manufacturer attaches to the product.

The money that the manufacturer is forced to spend on compensating retailers, monitoring price issues and dedicating resources to detail with the resulting customer service issues has to come from somewhere.  , It may result in the loss of jobs, reduced marketing and research and development budgets.

The Ghost of Christmas Yet to Come has negative consequences for the “showrooming”-addicted consumer as well.  While the consumer will have short term gains with reduced prices, the long term forecast will likely result in fewer choices, less innovation and reduced quality as the manufacturers seeks to eke out acceptable margins.

As an industry, we must continue to look for ways to promote products that protect reasonable margins for the retailer and manufacturer while still providing value for the consumer.  As the number of smart phones and comparison shopping tools increase, the impact of “showrooming” will continue to mushroom and everyone but a select few will lose.

Jeff Mariola is CEO of DigitalBrandWorks, www.digitalbrandworks.com, a digital consultancy which specializes in representing manufacturers in the digital marketplaces and ensuring proper overall representation of product’s pricing and content online.

Will Mom-and-Pop eCommerce Shops be Economically Affected if Online Sales Tax Passes?

Guest Blog by Jonathan Barsade

For more than a decade, federal and state lawmakers have attempted to craft legislation to regulate the collection of sales tax on Internet purchases. The Marketplace Fairness Act of 2013 passed the Senate in May with bipartisan support. House bills are now under consideration to achieve the same goals, which are to level the playing field between online retailers and brick-and-mortar competitors and more effectively enforce existing sales tax revenue collection laws.  House Judiciary Committee Chairman Bob Goodlatte recently released a list of principles that should form the basis of the House bill, which is also expected to enjoy bipartisan support.

The question of taxation of online sales stems back to 1992, nearly a decade before eCommerce really began to take off, when the US Supreme Court ruled that retailers did not have to collect and remit local sales taxes unless they have a substantial connection (“nexus”), such as a physical presence, to the state where the customer lives. Where there was no “nexus” and sellers did not collect the tax, the Court ruling left it up to customers to pay the taxes owed in the form of “use” taxes, but most consumers don’t understand that obligation, and very few bother to comply. This created a loophole for the upcoming world of eCommerce.

One of the reasons cited for the 1992 Supreme Court decision was that merchants who sell out of state would potentially have to comply with the tax rules of over 10,000 tax jurisdictions to correctly collect and remit sales taxes. The Court noted that this would be an “undue” burden to place on businesses, that it would too complex and onerous to require a company to track and manage this massive body of rules.

Organizations that oppose the Marketplace Fairness Act and similar legislation cite this same argument today, particularly when it comes to small businesses: They claim that it is unreasonable to expect small retailers – mom-and-pop eCommerce shops – to comply with thousands of tax jurisdictions. They reference those very large online retailers with operations in multiple states that do invest hundreds of thousands of dollars in staff and systems to manage revenue collection and reporting.

But this argument is based on outdated technologies and ignores key developments that have occurred since the 1992 Supreme Court ruling. Technology is now much more advanced and accessible. Affordable software is available that can handle complex tax calculation and collection compliance tasks automatically, without slowing down transactions.

Opponents of closing the online sales tax collection loophole also complain that it’s unfair to expect mom-and-pop eCommerce operations to deploy and maintain the sophisticated software necessary to comply – that they lack the technical sophistication to manage this task. But this ignores the fact that online sales businesses – even small ones – are technologically savvy.

After all, they’re able to create an online store, attract customers on the web, complete online sales, collect complex shipping information, collect and process online credit card payments and much more. The sales tax solutions available for these retailers require only a fraction of the know-how needed to perform these tasks. And depending on their size and transaction volume, small online retail shops can get a plug-and-play solution for under $30 a month.

While closing the online sales tax loophole would represent an additional expense, for the vast majority of online operators, the cost would be nominal, and implementation and ongoing maintenance burdens would be practically non-existent. There are affordable options on the market now that automatically calculate, collect and file taxes. In fact, automating the process has been found to save merchants a significant amount by helping them avoid the fees and penalties they’d have to pay if they forget to file returns.

The Internet began to have a significant influence on culture in the mid-90s, but until 2001, its effect on commerce was much more limited: Websites served mainly as electronic marketing brochures until the infrastructure to support secure payments was developed. Since then, online retailers have enjoyed huge advantages over their brick-and-mortar counterparts – low overhead and access to a global market of potential buyers being the largest competitive edge.

Enacting legislation like the Marketplace Fairness Act won’t take those advantages away – online merchants will still enjoy lower overhead and greater market exposure. And thanks to sophisticated, easy-to-use and affordable compliance software, if legislation such as the Marketplace Fairness Act passes, complying with local tax collection rules won’t prove an undue burden for mom-and-pop eCommerce shops either.

Jonathan Barsade is Exactor CEO and former tax attorney at Akin Gump.

Keeping in Touch With Seasonal Employees

 

Guest Blog by Jonathan Erwin

As Businesses Experience Influx of Seasonal Hires, Enterprise Quality Communication Software Proves its Worth

With the holiday season creeping up quickly, retailers all over the country are beginning to ramp up for their busiest months of the year. To cope with the inevitable annual influx of business, many retailers will hire hundreds – sometimes even thousands – of seasonal employees.

The problem with hiring all these new employees is that communication can be tough. These companies already have standard procedures when it comes to communicating with their employees. Phasing in a new, often largely temporary workforce, takes a lot of effort and a lot of planning. Whether it’s a new procedure, that week’s sale items, or the most up to date marketing information, seasonal hires need the same access to communication from the top levels of management as any of the more full time employees. Communicating with these seasonal hires is tough largely due to the fact that they don’t have corporate email addresses.

When businesses swell from an administrative staff of 200 to more than 2000 employees at peak times, it can be a logistical nightmare to stay in touch with each new employee. That’s why software that is capable of seamlessly on / off boarding seasonal employees, training them, connecting them with their bosses and with each other – all in real time with no infrastructure to buy, deploy or manage – is absolutely invaluable. For example, a civic organization with a city as its customer base, or a fair and exposition center with hundreds of diverse events, vendors and event workers.

Enterprise communications networks for the non-desk workforce is additionally valuable because it creates workflow efficiencies while supporting remote locations. It improves the communication flow without requiring employers to default to personal email addresses or text messages; allowing field and frontline workers – often related to merchandising, promotion, pricing, delivery and distribution – to stay in the loop. When real time engagement with frontline workers is achieved, it naturally results in a more uniform, and thus better customer experience, which strengthens “same-store” sales revenue.

Another advantage is the increase in operational support efficiencies, accomplished by connecting location and field based management while bypassing busy email inboxes. This also strengthens coordination through the entire company and makes corporate compliance easier than ever – a very good thing over the holiday season especially, when so many new employees who may not be familiar with compliance standards are working and learning on the job.

The holiday season often requires an increase in overtime allotment. Good enterprise software designed around bringing non desk workers into the fold can reduce overtime while increasing service levels through improved team member engagement – with scheduling, coaching, product roll out and promotion, general announcements and coordination.

Another advantage of this type of software during holiday season is that the human resources department now has a private and secure voice channeled directly to team members. This reduces U.S. Mail expenses, strengthens ERISA compliance, and allows for the delivery of critical information related to payroll and benefits.

For all these reasons and more, it is crucial that companies expecting an influx of seasonal employees are prepared with the correct enterprise quality communication software designed to make the transition to the busy season as drama free as possible.

Jonathan Erwin is CEO of the mobile enterprise network Red e App. Jonathan has 20+ years in sales, marketing, and executive roles. As CEO and founder of Red e App, he is focused on helping customers engage employees more effectively through mobile communication.