Guest contributor |
Though today’s economic climate is uncertain, there are still opportunities for retailers in the year ahead. According to Mastercard’s SpendingPulse indicator, monthly retail sales in the USA have risen year-over-year, and US retail sales are projected to increase 3.7 per cent during the 2023 holiday season. But whatever the events in 2024 promise, it’s clear that remaining agile, digital and focused on an omnichannel strategy will best serve retailers in the year ahead.
Two major trends – the continual rise in the growth of e-commerce and the emergence of recommerce – will dominate the retail landscape throughout the next few years. E-commerce sales in the USA are predicted by market research company eMarketer to grow by $588 billion over the next five years, while online consignment and thrift shop ThredUp’s 2023 Resale Report projects that revenue from global recommerce is on track to grow three times faster than traditional retail until 2030.
At the same time, retailers are facing a surge of new regulations, including marketplace facilitator laws and the increased strain of economic nexus on global sellers. As e-commerce continues to grow and recommerce spreads far and wide, keeping up with compliance requirements should remain top of mind. Ensuring that retailers have a way to track, manage and report on transaction data from their systems and channels is the key to prevent extraneous factors hindering growth.
Retailers that enter the recommerce space should pay close attention to the potential tax consequences. If they create a resale site, they may turn themselves into a marketplace facilitator and could end up liable for collecting and remitting the tax due on sales made through the site. As the amount of active users participating in the resale ecosystem grows exponentially, it becomes clear how quickly tax liability can add up.
As we enter a new year, getting sales tax right remains essential as it greatly impacts the customer experience. In uncertain times, retaining customers is as critical as finding new ones.
George Trantas is the senior director of global marketplaces at Avalara
This article was originally published in the Winter 2023 issue of Technology Record. To get future issues delivered directly to your inbox, sign up for a free subscription.