eCommerce Trend Report: 2019 Recap & Future Forecasts

The good news: Last year achieved significant growth in online shopping, and there’s no sign that the train will slow down anytime soon. The bad news: Changes in sales tax laws had e-sellers scrambling to understand and comply.

Consumer Migration to eCommerce

Trust in online shopping as a convenient, secure alternative to brick-and-mortar continues to grow by leaps and bounds. In 2019 we saw:

• Record-breaking Black Friday and Cyber Monday online sales — 19.4% and 16.5% growth over 2018 respectively

• $72.1 billion in online sales from Nov. 1 to Dec. 1, 2019 — a 16.3% increase over 2018

What does the future picture look like?

• By 2023, U.S. business-to-consumer eCommerce is projected to grow 47.8%

• New technologies such as augmented reality (AR) and artificial intelligence (AI) will play a bigger role

• Automated marketing tactics such as targeting and personalization will drive online shoppers’ choices

Hottest Shopping Channels

Two e-commerce channels, in particular, emerged as the big winners in 2019.

1. Sales via smartphones

• 54% of visits to retail sites — 19% growth over 2018

• 33% of all Cyber Monday sales — 46% growth over 2018

• Projected 72.9% of eCommerce sales by December 31, 2021

2. BOPIS (buy online, pick up in-store/curbside)

• 43% growth over 2018

Sales Tax Headaches

The 2018 U.S. Supreme Court ruling (South Dakota v. Wayfair) basically gave each U.S. state the power to set its own economic nexus thresholds. That made 2019 the year of tax law changes throughout the land.

As a result, eCommerce sellers face an astronomically more complex task in filing state sales tax returns. In fact, there are now more than 40 different state nexus laws to determine if and where you must register and collect sales tax.

The amount of time, labor, and expertise needed to stay on top of sales tax compliance has reached the point where many eCommerce businesses are choosing to outsource the work as a more cost-effective solution.

Sales Tax Software Moves

eCommerce businesses are flocking to software solutions, for all the reasons we discussed above.

• Rising sales volumes require scalable applications that can handle high traffic, provide reliable security and protect against downtime

• Sales tax calculations must stay current with the new complexities

In addition, eCommerce customers expect convenience and transparency as they check out at their favorite online store. A 2019 study showed that 95% of consumers want to see the total of all fees and taxes before they click “Buy”. Failure to meet this expectation can cost you in sales as well as brand loyalty.

Sales tax processing is just one of the accounting services Xendoo provides to its small business customers. Our comprehensive, affordable packages can take a whole load of bookkeeping hassles off your shoulders.

 

Experience the Xendoo difference with a one-month free trial.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

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