May 19, 2020

How to adapt your business model to an online audience

Retail
online retail
online shopping
e-commerce
Paul Galpin, Managing Director...
4 min
How to adapt your business model to an online audience

The delivery market continues to grow apace driven by ecommerce.  Analysts predict that by 2018 online deliveries will hit 1.35 billion a year, 29 percent more than the billion deliveries that took place in 2013. The growth of the e-commerce market is giving online retailers a clear opportunity to expand their customer base across the world. However, in order to cater for this larger prospective audience, retailers need to offer greater delivery flexibility.    

The importance of a seamless delivery system should not be underestimated. Indeed our research shows that experiencing delays or delivery problems just twice or more would convince 87 percent of people to switch to another supplier. If deliveries are mishandled, new found customers can find an alternative supplier at the click of a button. And these problems are exacerbated when it comes to distribution across borders. Indeed, 61% of consumers surveyed expressed reluctance to buy from overseas online shopping websites. Clearly, more mistakes are expected when it comes to international deliveries.  So, what are the key criteria for an effective delivery and returns system and how can these be adapted when expanding internationally?

The territories that a retailer is looking to target will have a key impact on the delivery solutions offered, since consumers in different territories can have vastly different expectations. For example, unlike in the UK where pick up points are only just becoming widespread, in France pick-up points and locker boxes are a fast-growing solution representing 20 percent of ecommerce deliveries. Meanwhile, in Scandinavia pick up points are the standard form of delivery thanks to the widely dispersed population.

Reliable ‘back office’ processes, such as confirmation emails upon purchase of item, also need to be implemented as part of the overall delivery superstructure in order to satisfy international consumers. In the German market, nearly half of online shoppers regard comprehensive confirmation e-mails as the most important aspect of the delivery process, followed by punctuality of delivery.

On the subject of communication, retailers must not overlook the power social media has to hold poor delivery systems to account. Our research shows that almost a quarter (23.5 percent) of respondents said that they had already used social media to complain about services. By using social media to comment about poor service consumers are immediately broadcasting this message to followers/friends. This means that potentially thousands of prospective customers have been given a negative view of the company from the outset, with the risk that they buy elsewhere.

Online retailers are becoming more aware of the potential adverse effect social media can have on building and maintaining customer relationships. Rob Millington, Head of Couriers and Loss Prevention at on-line retailer and brand owner The Hut Group comments: “The advent of social media means consumers have a broader platform to voice their dissatisfaction should delivery services not meet required standards. When this happens, the reputation of the retailer is very much at stake, so it is essential in this competitive market place to get your delivery methods right.”

When developing a seamless delivery system in line with international expansion, there are clearly a number of factors to take into consideration. The lesson for retailers is to have a good understanding of the markets and demographics they are looking to target in addition to the broader social media dynamic. Engaging an expert partner can be valuable here.

Rob Millington explains: “The Hut Group decided to partner with a delivery expert because it provides us with a means of driving cost efficiency in an increasingly complex postal market.  I also really like that they are continually evolving and bringing new solutions to benefit our customers and keep us ahead of our competition.”

There’s no doubt that continued ecommerce growth gives online retailers an exciting opportunity to expand their global customer base, but doing so successfully requires planning and research. Rushing into global growth without the necessary preparation can backfire and become costly. An expert partner with a proven track record will have the necessary global knowledge, contacts and expertise. This helps to ensure that distribution solutions not only meet customer expectations but serve to enhance the shopping experience, thus encouraging further transactions and customer longevity.

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Jun 8, 2021

Six issues at the top of tax and finance leaders’ agenda

Tax
Compliance
financeleaders
Deloitte
Kate Birch
4 min
As businesses accelerate their transformation journeys, tax leaders are under increasing pressure to add strategic value. Deloitte reveals six tax trends

New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.

According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.

And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.

Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.

Trend 1: Businesses seek more strategic counsel from tax

Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.

According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”

Trend 2: Tipping point for resourcing models

Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.

Trend 3: Digital tax administration is moving faster than expected

in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.

"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."

Trend 4: Data simplification and lower-cost resourcing are top priorities

Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.

At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”

Trend 5: Skillsets are shifting

Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.

Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact 

Trend 6: 2020 brought productivity improvements

Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.

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