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By Greg Chapman, SVP of business development, Avalara

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Changes in consumer habits and improvements in e-commerce, and shipping technology have given consumers more purchasing power than ever before. E-commerce has enabled retailers of all sizes to reach larger audiences and innovation in purchasing technology has made it possible for consumers to make purchases from nearly any device, from anywhere in the world. The evidence is right in front of us — customers in Ireland can purchase their favourite ice wine from Canada through their mobile devices and expect to receive it in a timely manner. Because of these changes, it’s no surprise that omnichannel retail has quickly shifted from something that retailers could choose to do into a business model that is, by all means, a requirement for consumers to do business with you.

For Canadian retailers looking to keep pace with these changes in consumer habits and identifying new channels to sell through, there are numerous considerations that they should keep in mind when developing their omnichannel selling strategy.

The Impact of the ‘Marketplace Economy’

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Online marketplaces have completely disrupted the way consumers look at e-commerce. Mega online marketplaces, like Amazon, Etsy, eBay, and Rakuten have made it possible for consumers to browse and compare products from sellers around the world and, ultimately, purchase nearly any product they desire. Customers have also become accustomed to the seamless checkout, shipping, and returns processes that marketplaces offer. To keep pace, traditional e-commerce platforms and online retailers are being forced to emulate the customer experience provided by marketplaces.

However, to successfully provide customers with Amazon-like experiences across channels, retailers need the right technology in place to streamline every step of the customer journey. From product pages to checkout to tax calculations to fulfillment, customers demand a simple and easy shopping experience from retailers regardless of where they are shopping--on an e-commerce site, mobile applications, etc. Moving forward, retailers will need to take a ‘bundled’ approach to online experiences to ensure that they are staying competitive with the convenience and positive experiences provided by online marketplaces.

The Inevitable Growth of International E-commerce

Another influential factor in a business’s omnichannel e-commerce strategy comes in the form of international, or cross-border, commerce. For Canadian retailers, there is ample opportunity to capitalize on international sales from countries that are already interested in making purchases from Canada, like the United States and the United Kingdom. In fact, a survey of U.S. consumers found that 72% of Americans would consider purchasing from Canadian retailers.

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However, selling beyond Canadian borders isn’t as simple as marketing products to customers outside of the country. Before embarking on cross-border expansion, businesses must consider international complexities and invest in ways to manage them, especially when it comes to compliance. Beyond knowing goods and services tax (GST), retailers must be adept at handling sales and use tax, value-added tax (VAT), customs duties (also called tariffs), import fees, and the variations of each from country to country.

In addition to different tax systems, businesses need to properly assign Harmonized System (HS) codes to all their goods. The first six digits of the code are standardized across all participating countries; however, each country appends its own set of digits to classify a product based on specific parameters and regulations. Each country also has its own laws governing what can be sold by whom. For example, tax rates applied to imports from Canada to the United Kingdom may be applied differently than those same products when coming from the United States.

Despite these challenges, the good news for retailers is that cross-border commerce isn’t going away anytime soon, so there’s still time to get your slice of the pie. In fact, Forrester predicts that global cross-border e-commerce will grow to $424 billion by 2021.

The Introduction of New Selling Channels

Perhaps one of the largest drivers of omnichannel retail is the mobile device. In 2019, Amazon alone saw 85% of shopping activity come through its mobile app. Consumers want to be able to make purchases when it is most convenient for them, so retailers must be equipped to meet customers where they are. Beyond the smartphone, consumers are now able to make purchases through connected devices, like smart speakers, wearables, and Internet of Things (IoT) devices (think smart refrigerators).

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Beyond devices, retailers also have the opportunity to reach and sell to customers through channels that consumers are using every day for other reasons. Take social media, for example, billions of people log on to popular social networking sites, like Facebook, Twitter, and Instagram, on a daily basis. Thanks to improvements in social advertising, retailers can target customers with advertisements that allow users to make purchases directly from their timelines. Staying on top of the newest technology will continue to become more critical for retailers looking to stay in front of potential customers through the most impactful channels.

The Internet and proliferation of e-commerce offer retailers a world of possibility to increase sales and reach more customers. To stay relevant in the world of omnichannel commerce, success requires retailers to augment their customer experience to align with consumer expectations. Retailers will also need to take the impact of global compliance into consideration before selling across borders and will need to be in tune with the newest and best channels for reaching customers as technology evolves. At the end of the day, every retailer’s audience and business goals will vary, so determining the right omnichannel approach for your business should change to stay as closely aligned to those two factors as possible.

"Greg Chapman is the Senior Vice President of Business Development at Avalara, a leading provider of cloud-based tax compliance automation for businesses of all sizes. He has been with the company since 2013. Avalara provides its compliance solutions embedded within partner’s software, therefore in his role leading business development and partnerships, Greg must be able to spot emerging trends in how businesses manage their financial planning, execution, and growth strategies. Increasingly important to Avalara is how business expand across borders and into new sales channels, such as marketplaces, to accelerate their growth. Prior to Avalara, Greg worked with as a business development leader for Amazon. He is able to provide insight into the world of retail and ecommerce for small businesses. Greg is an alumnus of Dartmouth College."

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