PwC surveyed 7,005 consumers worldwide, including 1,000 respondents from Switzerland. The single biggest conclusion that we drew from our study is that consumers are outpacing traditional retailers and online pure-players are closing the gap. Consumers choose the channel that best suits their needs, doing their research predominantly online for products before buying the product in a store. Besides company websites, more and more consumers are researching and following brands via social media.
The results clearly show that consumers prefer to have their purchases delivered home. We see a major discrepancy between what consumers want and what retailers are offering. Online pure players such as Amazon, Ricardo and eBay are closing the gap and offering exactly what many traditional retailers are not yet able to provide.
Achieving the “most favored retailer” status in a particular niche will be a key success factor in the future. One key element for a successful multi-channel operation is a deep understanding of the customer, backed up by a successful cross-channel experience and a seamless behind-the-scenes execution. This is vital as many consumers are starting to develop personal portfolios of their favorite stores and are consolidating their spending among their preferred retailers.
Multi-channel retailers leverage all the advantages offered by e-commerce: rich product information, wish-lists, broad product range, customer reviews and tips, convenience of access, fast checkout, price comparisons and special deals.
Despite the large potential of going abroad, online retailers are reluctant to sell their products across borders due to the cost of managing the added complexity involved. Costs increase dramatically once e-commerce content and services have to be managed in multiple languages. Pricing becomes highly complex when accommodating foreign currencies, custom duties and complex VAT rules. Centralized logistic capabilities struggle to effectively manage the added complexity of shipping and returns in a cross-border environment, while in-depth expertise is required to embed processes and procedures to minimize and simplify indirect tax burdens.
Minimizing unrecoverable taxes, expediting refunds of recoverable amounts, integrating onerous reporting obligations and documentation requirements into supply chain processes and continuously updating prices, processes and systems in response to regular amendments to VAT legislation are issues of strategic importance for an online retailer. This makes it crucial for retailers to factor tax considerations into their major strategic discussions, to carefully review the impact of VAT on pricing, ensure accurate customs documentation and bring in specialists.
Read this and more in the recently published Retail & Consumer study by PwC Switzerland.