Retailers must optimize convenience and improve the fulfillment and returns process to keep consumers happy throughout the season.

Amit Mathradas, president and chief operating officer at Avalara Inc.

As retailers and businesses of all sizes ramp up for the holiday season, many face new and unknown challenges created by the COVID-19 pandemic and social distancing rules.

A season that is generally defined by long lines at retail stores and late-night doorbuster deals now features store closures on Thanksgiving Day and a focus on ecommerce. In fact, according to Adobe, two years’ worth of ecommerce growth is going to be packed into this holiday season.

Not only are changes to the 2020 holiday season being fueled by the pandemic, but also by changes in consumer preferences and concerns around personal finances. Retailers will need to optimize convenience and improve the fulfillment and returns process to keep consumers happy throughout the season.

Here are four trends that retailers and other businesses should be mindful of as they prepare.

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  1. Be ready for a barrage of customers online: Experts always tell retailers to prepare for a drastic increase in customer traffic during the holidays, but this year is much different. For most retailers, the rise in traffic will come online, which means that the time to get online is now if your business doesn’t have an online presence. It will also be important for retailers to prepare their online channels for a jump in customer traffic. They should take a close look at the ecommerce platform, billing systems, tax compliance software, and other finance technologies that they are using to ensure that the systems they have in place can weather a massive uptick in online traffic.
  2. Differentiate your business online: More consumers shopping online this holiday season also means more competition online. Due to this, standing up an ecommerce store will not be sufficient to drive customers to your website throughout the season. Retailers should take additional steps to ensure that every aspect of the online customer journey from beginning to end is optimized. This may look like enhancing customer support tools on your website or investing in fulfillment services to improve delivery times and enable returns. As competition ramps up online, a focus on maintaining a positive customer experience may be the make-or-break difference for customers when making purchasing decisions.
  3. Prepare for cost-conscious customers: With the economic impact of COVID-19 still unfolding, many consumers will likely be extra mindful of how much they are spending this holiday season. Retailers must pay close attention to added costs at checkout and ensure that they calculate all charges accurately. For example, getting sales tax charges incorrect could change the total costs by several dollars, resulting in cart abandonment if customers can find a cheaper option elsewhere.
  4. Make the most of your budget: Like the economic impact on consumers, many retailers might find themselves in a precarious financial situation due to mandated closures and a drop in traditional retail spending earlier this year. As such, businesses should identify aspects of their operations that can be automated or outsourced to cut costs and increase efficiency. From invoicing systems to tax compliance management, retailers of all sizes can save money by leveraging technology to manage backend processes and allow them to focus on serving customers.

Ecommerce will define this holiday season. As such, retailers prepared to serve customers online—from the browsing experience to merchandise returns—will have a leg up on the competition. Being mindful of consumer preferences when shopping online and how the pandemic is currently impacting buyers will help create a personalized shopping experience to attract customers and drive sales. As the holidays go digital, retailers who invest in technology across their business will have a foundation to keep up with demand and scale their businesses throughout the season and beyond.

Avalara Inc. is a provider of tax management software. 

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