onlilne shopping « eveofmarketing

Let’s face it, our states and government need money and the only way to get it is to increase taxes. Looking for ways to basically increase taxes without seemingly to raise taxes has been a challenge in our political environment especially since we are still recovering from the recession. However, there lies a large arena that has been shielded from sales tax collection until now, and that is online shopping.

The State of California has been collecting sales tax for online purchases since September 15, 2012, after many bitter battles with online giant retailer Amazon. Other states are sure to follow, so the question begs, will the collection or additional charges paid for sales tax have an effect on online shopping? I say in the long run, no! It is my opinion, that the collection of sales tax won’t even make a ripple on online shopping.

Although many people shop online as a way to save money because prices are lower because many retailers are able to pass the saving of not having a brick and mortar establishment on to the customers. Even with the collection of sales tax, prices still might be better online. But if prices were the only reason people shop online, then maybe it would make a dent in sales. But I don’t think so because price is not the only reason people shop online. People shop on online for many reasons besides price:

Time: quicker than going to brick and mortar store
Convenience: online store open 24/7 even holidays
Ease of comparison of prices
Increased selection and variety of items
Less work: no traveling, parking, no waiting in lines etc
Availability even if live in obscure out of the way places
Global accessibility, can shop in any country
Private, safe and secure
Can have shipped anywhere with click of button

For myself, I shop online because of time or lack thereof. My work (9-6) and school schedule ( 6:30-9pm) does not allow for much shopping especially during the times stores are open. And if they are open late, like Target and Wal-Mart, I am just too tired to think about going in a store to shop. And on weekends, I have much better things to do, like homework and studying and if not tied down with that. I want to do something enjoyable, like a concert, outdoor festival or even a movie, not go shopping. Therefore, it is a necessity for me to do my shopping online. I am sure there are many others who do so as well.

Now that I have said that much, it is not to say that online retailers won’t have to market themselves to stay where they are. Times are constantly changing and people change the most, their tastes and preferences. So just like any other retailer, online retailers need to stay abreast of what their customer preferences are and adapt, by making changes to how they market themselves and how they relate to their customers to continue to satisfy their needs and desires.

Relating to customers is something that Amazon does very well. Amazon tracks what each customer buys and using their Business Intelligence Software, makes predictions on what other items the customer might like and offers suggestions. I believe Amazon does this better than any other online retailer. Sometimes I think they know me better than I know myself.

So the question remains, will the additional tax be too much for online shoppers? No, in my lifetime, the tax rates have gone up along with everything else and I still buy and consume what I need, want and desire, maybe even more than I should by looking at my latest credit card bill. And I believe people who shop online will continue to do so as well.

Happy shopping,

Eva Prada

http://www.sensibleemarketing.com/

http://www.businessweek.com/ap/2012-09-13/tax-on-amazon-purchases-in-calif-dot-begins-saturday