Special Feature
How often do your clients tell you they aren’t very concerned about tax law and regulations? What they would rather know, in very simple terms, is their out-of-pocket tax liability, the accounting processes they have to change on their side, and how you, as the trusted advisor, can make all of this seamlessly happen.
No one except computer programmers really want to know how the computer actually works – all most of us care about is the end result.
Accounting professionals who work with clients selling goods in a brick and mortar store, by landline phone, mobile phone, or even online want to mitigate their clients’ risk as much as possible, especially when it comes to IRS tax penalties for personal and business returns, or having to undergo a state sales tax audit because reporting and compliance were not done correctly. Yet, if you were truly held to the “trusted advisor” standard, then you would also want to advise these same clients on matters outside of traditional accounting, such as technology and how it affects the way goods and services are sold.
If the customer is always right, then e-tailers and retailers need to maximize the buying experiences as much as possible, which means changing the way they do business. Key to this is moving from what we know as a “multi-channel” to an “omni-channel” environment.
Many retailers still operate in what they think is a multi-channel model, where transactions take place among various “channels:” retail, online, mobile, and mobile app stores, as well as telephone sales and any other method of transacting with a customer. Multi-channel retailers such as Macy’s built their businesses based on a customer centric perspective.
Yet, what these same retailers are coming to really operate is an omni-channel approach that takes the buying experience to another level because it focuses on seamlessly using all available shopping channels – smartphones, television, online and, of course, the traditional strip mall store – that actually interact with one another.
Smart Consumers Demand Omni-Channel
Multi-channel is officially dead and has been replaced by omni-channel. Consumers will no longer tolerate treating online, in-store, phone orders, and other ways to buy as a stand-alone experience.
Today’s consumers are highly educated. See if this sounds familiar. A week prior to Super Bowl, “Bob” in Ohio already knows what kind of big-screen TV he wants; all he needs to do is walk in to a retail store and purchase it. However, Bob quickly figures out he cannot drive to the store to purchase and pick it up because his Mini-Cooper is too small to hold the 60-inch screen. Instead, he purchases the TV online.
Without even realizing it, Bob’s purchase is no longer just an online purchase. He plugged in the TV and the picture is not as bright as he thought it would be, so he borrows a friends’ truck and tries to return it to an in-store location. He is promptly told that the online channel was actually treated as a separate “store” and is not integrated with any other buying venue.
With a TV he no longer wants, what does Bob do? He has to pay the packing and freight to ship the TV back to the provider and, to make matters worse, there’s not enough time to receive a replacement before the big game. Not only has Bob lost out on an opportunity to watch the game in the comfort of his easy chair; the retailer lost him as a customer, most likely for life.
There are other instances in which an online purchase and an in-store return do not sync. Just recently, I had a friend mention to me that he purchased a jacket online for his wife, went into the store to exchange it for a different size and was told he owed an extra 38 cents in sales tax. While it’s true that the extra tax is far less than the cost of a cup of coffee, it was very frustrating for my friend who wanted an even exchange.
This underscores the fact that retailers are increasingly offering, and consumers are increasingly expecting, the ability to order, pay and receive goods anywhere from any channel, and make returns or get support from any channel. As a result, the Point of Sale (POS) as a traditional “cash drawer” no longer exists. Software such as QuickBooks POS will morph into an all-encompassing supply chain strategy. The future holds an experience where the POS terminal looks more like buying online where the POS functions as a portal into the entire supply chain, providing detailed product information to store clerks who previously were only aware of what they had on the sales floor.
According to TechCrunch.com, Forrester Research reported that online sales in 2012 totaled less than 5.5% of total sales, but the trend is still clear. When consumers see a brand name, they have certain expectations as to the way they are treated, the price point in relation to the quality of the product or service, and a variety of other factors. Think “Disney” and “Nike.” To meet the demands of smart consumers, retailers need to create one brand experience across many, many touch points. This includes the phone, direct mail/catalogues, brick and mortar stores, online, mobile, iTunes/Android apps and tablets, home shopping, gaming, and even customer reviews such as Yelp.
Customers are increasingly expecting to be able to look up store inventory from a phone, be in the store and look up additional product detail, and even place orders onsite and have the purchase delivered to their home. Wouldn’t it have been great for “Bob” to go to the store, actually see the TV’s bright picture he most wanted, order it while in the store and wait for the delivery at home?
Even Circuit City, before its demise, offered the ability to buy online with confirmed in-store inventory to pick up within 20 minutes. Today, big-box retailers have showrooms where they display products and place online orders for their customers.
Mobile apps and ad placements know you are standing in store “X” and make product recommendations based on what you looked at online. Maybe the pants you were looking at online are in the store and your size is in stock. In an omni-channel environment, same day delivery trends will accelerate more stores operating just like this. Imagine shopping on New York City’s Madison Avenue in the morning and having everything you bought back at your hotel by late afternoon.
Few Losers and Many Winners
Who will lose? Retailers that try to remain exclusively brick and mortar and single channel, and POS vendors that can’t adapt to a new integrated, connected reality.
The true winner is the consumer, but providers who improve their processes also win. Take mobile apps, for example. The next evolution of the mobile app could be self-checkout where you can walk the aisle of the grocery store and scan items with your phone as you put them in your cart. Consider other mobile apps that offer in-store shopping assistance rather than a competitive offering to pull consumers out of the store.
I expect that we will see more and more “shopping guides” rather than sales associates using tools from the likes of GlobalBay or CrossView where sales associates become advisors, much in the same way many accountants are moving away from completing tax returns and becoming more strategic, guiding the client to make more informed business decisions.
Educating yourself on omni-channel processes and cloud-based technologies that support these processes will be extremely beneficial to the long-term survival of your clients, but also bolsters your own practice because it shows that you are an expert in providing advice in this area.
—————-
Webb Stevens is Senior Director of Product Management for Avalara. He can be contacted at webb.stevens@avalara.com.
Thanks for reading CPA Practice Advisor!
Subscribe Already registered? Log In
Need more information? Read the FAQs
Tags: Accounting, Automation, Sales Tax, Small Business, Technology
