Sales Tax is Not a Deal Breaker for Online Shoppers.
Gone are the days when sales tax was a deal breaker for online shoppers, though it does weigh on purchase decisions with a higher order value. Almost 24% of consumers consider any increase in the cost of an order before making a purchase decision, while 39% are not affected by tax.
Customer Experience Weighs Heavily on Purchase Decisions
Research reveals that the overall customer experience is not influenced by sales tax but by the quality of service and increase in order value. Leading retailers are making concerted efforts to deliver on customer experience by ensuring a seamless checkout experience and also quick delivery of products to customers.
According to latest data published by Bizrate Insights, more than three-quarters of consumers who paid sales tax were unaffected by the tax. The research reveals that this section of consumers did not consider abandoning their shopping cart because of the tax.
Half of online shoppers pay sales tax while half give little to no importance to it when making a purchase decision.
As online purchases become eligible for sales tax, more and more online retailers are now focused on providing a seamless purchase experience for shoppers rather than wondering whether the tax would have a bearing on the purchase decision.
Certain factors, such as convenience, seem to be more important in driving customer purchase decisions compared to taxes. Some offline studies have found that most consumers see sales taxes as a “hidden” price and are less intimidated by it than retail prices.
Tax sensitivity is only a third of the response to an equivalent rise in retail price.
The Amazing Amazon Experience
Amazon Prime members are spread over 27 metro areas, and growing too. To improve customer experience, the biggest online retailer offers free same-day delivery on millions of items. With Prime Now, Amazon makes it possible to ensure delivery within two hours on 25,000 items. This certainly boosts customer trust in the brand and gives Amazon a higher competitive advantage. Their product return and exchange policies also help gain consumer trust.
Walmart is the only brand that can compete with Amazon’s stellar customer service. Its recent acquisition of Jet.com is an effort toward improving the overall customer experience.
Related: Excellent Customer Service.
Don’t let sales tax scare you away from starting a new eCommerce business or expanding your current one. It is mostly accepted as a part of doing business or a cost of business. Give your customers a great shopping experience, show them that you value their business and feedback and they will not be thinking about sales tax increasing their order values.
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