Let’s admit - 2020 has not been an excellent year for the general population. The Coronavirus pandemic that led to lockdown in close to 200 countries has seen life-as-we-know-it come to a standstill. But the year is almost over, and even though a possible vaccine is not yet available at a mass scale, there’s something about the onset of winter and the beginning of festivities that seems to uplift spirits.
While the western hemisphere prepared for Cyber Monday, Black Friday last month, India celebrated a season of discounts, offers and deals starting with Diwali, and this month we are all geared up with end of season sale offers and winter sale offers for a festive holiday season with Christmas, New Year, which extends up to Republic Day in January 2021. And although this festive season is unlike one we have seen ever, it is still a time when people indulge in celebrations and shopping sprees.
Retail businesses haven’t done very well this year because of the pandemic but the festive season is the time to put the pedal on the metal and optimise sales efforts to meet revenue goals. Footfalls are expected to be lower than usual as Governments are still advising citizens to practice social distancing and step out only for necessities. This means businesses are going to have to reach out to the customer instead of the other way around. Quite a few companies have already set up shop online and are competing with each other to capture the most digital footfalls. If your business is looking to set up a digital presence, you should know that the competition is fierce and that ways to reach the customer through targeted marketing are now becoming traditional digital measures. With the competition that tough, businesses need to use aggressive strategies and optimise technology solutions to make the most of the festive season. Many new digital business avenues have recently evolved and are taking online markets by storm.
Immersive Storefronts - The latest in line of online sales innovations to hit online markets are selling using immersive storefronts, i.e. shopping using social media posts with built-in links that will lead the customer to the product on an e-commerce website. This is a great way to promote products that are already on discount or are new arrivals. It also works perfectly while using digital content influencers to promote products. Retailers can share featured products through social media posts and stories with backlinks to the product page.
Social Media Stores - Social media channels like Instagram and Facebook has opened a new sales and distribution channel for small and medium-sized businesses worldwide by introducing a listings feature. Retailers can now list their products and reach more buyers at a local scale - promoting locally sourced products.
Collaborate with Influencers - While it is not new to use influencers to promote a product, businesses are getting creative in their use of influencers. Amazon offers influencers an opportunity to be a part of their influencer program where people who are currently influencers on social media will get their own Amazon page with a vanity URL. They can then post their recommendations of products available at the marketplace, and those recommendations are open to the public. Small businesses are tying up with influencers who are given a customised discount code which is then passed on to potential customers.
Interactive Events - Retailers are taking their promotional material online and creating online events to rope in more customers. Fashion and lifestyle e-commerce brand Myntra offer exclusive sneak previews to their End of Season Sale and provide early sale access to select customers on their app. They sometimes even gamify their campaign to determine who gets access first.
Omnichannel Retail Solutions - It is evident that retailers are getting creative with their sales tactics and while all the above activities are designed to pull in as many customers as possible, they can only be accomplished with a robust framework of supporting technology. With more potential customers returning to their hometown due to the lockdown, the demand for online shopping is likely to be higher in tier-2 and tier-3 cities. Businesses who are switching to online sales must prepare to ramp up their logistical capacity in these emerging shopping hotspots with the right technological support. Companies will also need to integrate chatbots, automated customer service solutions and automatic refund and return processes to facilitate faster movement of goods.
Keeping up with Tax Updates - Retailers also need to bear in mind that their marketing efforts will be defeated without a comprehensive support system for tax and compliance management. Businesses are likely to indulge in heavy discounting, buy one get one offer, cashback offers etc. to attract more customers. However, these practices require high-level scrutiny and businesses should ensure they are compliant to the GST laws. With reports saying that online sales are expected to generate a revenue close to $7 billion, and with products being offered at heavily discounted prices during the festive season, tax authorities are keeping a keen eye on businesses to ensure they do not indulge in any deep discounting or acts of profiteering. This will mean businesses will have to ensure that they keep up with tax rate changes, and in case of reduced rates, the benefit reaches the end consumer. Failure to do so will result in large penalties which will cause quite a significant dent in the revenues earned during sales. Most recently McDonald’s restaurant chain was held guilty of anti-profiteering.
E-way Bills and GST Compliance - With a rise in the number of transactions during this festive season, it is not possible to keep track of tax updates, figure out the tax implications as well as manage transactional taxes like GST, customs duty or import tax at the same time. Apart from managing tax implications correctly, businesses must also be well versed in issuing correct tax invoices, accurately generate e-way bills, fulfil all compliance requirements while carrying out cross border transactions and accurately file tax returns using the right forms and within the deadline.
E-Invoicing - Businesses also need to keep up with tax updates and newly implemented reforms. The latest reform introduced by the CBIC is e-invoicing which requires businesses to electronically authenticate each tax invoice generated by their accounting or billing or point-of-sale systems with the government’s invoice registration portal and generate an invoice registration number/QR code assigned to each tax invoice. These invoice authentication details are further to be used as a reference while generating e-way bills and filing GST returns. Although B2C e-invoices are not compulsory right now, it is crucial for businesses to start planning and evaluating their options to generate an e-invoice. Integrate de-invoice software solutions to automate GST compliance and e-way bills become an obvious choice for companies who deal with a large number of transactions and a complex network of marketplaces, dealers and distributors.
Reconciliations and Input Tax Credit - With the introduction of e-invoicing, there are additional reconciliation efforts required by businesses on top of their regular GST compliance reconciliations. Usually, companies will manually go through GSTR-2A data and reconcile invoices, but that can be quite a time-consuming process and not to mention, riddled with human errors. Meaning, additional difficulties while claiming ITC is likely to surface. With new reconciliation efforts with e-invoicing, any tax expert worth their salt will recommend adoption of tax technology solutions to speed up and simplify their reconciliation process.
Every day, businesses are innovating and discovering new channels and platforms to sell their products to more customers. They need to realise that technology plays a significant role, not just to reach new customers but also in ensuring every touchpoint of the entire shopping experience is pleasant. Festive seasons are incredibly stressful for retailers and e-commerce players which means they should be extra prepared.