US retail in the light of new political situation in USANovember 28th, 2016
After the presidential election of the US, various industries and the retail industry are also beginning to question on what the effect of this unexpected win on their businesses will be. Some retail experts have suggested that the new president can truly have an effect on the retail industry, because the supply chain and the labor changes can reduce the profitability of some retail companies.
Reasons why new president can affect retail
Some of the main reasons given for such negative forecasts include:
- Donald Trump has expressed his disapproval of the NATA agreement as well as the Trans-Pacific Partnership trade agreement. He has actually suggested that companies from the US who choose to produce their goods abroad should be taxed more. A survey has shown that nearly 44% of the retailers expect that the cost of their goods are bound to rise due to the protectionist trade measures. 22% of the retailers surveyed expressed their fear of higher risks of delivery and production delays and disruptions. One third of those surveyed by GT Nexus, have claimed that this will lead them to raising their prices as a counter-measure.
- Even though-commerce has shown a steady growth in the last years, Trump’s election can actually disrupt this growth. Goal number one of the online retail companies is to get the product to the customer as fast as possible, which can include the use of automation in the product distribution centers, delivery with drones and other developments. Trump though has already expressed his desire to protect the workers in the US from being replaced by machines and robots. This will hinder online retailers from applying the latest automations and quick drone delivery systems. If forced to invest in traditional labor forms instead can seriously hinder the seamless delivery which customers expect and are looking for when shopping online.
What will the result be
Both two of the abovementioned facts can cause the retailers to need to sell their goods with much smaller profit margins, so that they can stay competitive. Since more users choose to use the useful shopping browser extensions and mobile apps which provide quick price comparisons of the same product on different stores, the best deals at the moment, as well as a number of useful features, this will cause the retailers to have to face fierce online price competition.
In conclusion – e-commerce cannot really be stopped
E-commerce has been developing and increasing its sales volumes with every other year. Now, with Trump as President of the US, the biggest online retailers, such as Amazon may be forced to pay more taxes, because he has already dubbed the huge online retailer a “big tax shelter.”
But whatever the repercussions from this surprising turn of the US presidential elections, BI Intelligence still forecasts that US consumers will spend a stunning 385 billion US dollars in online purchases in 2016, and that by 2020, the online sales volumes will reach 632 billion US dollars.
Getting expert advice on improving online marketing effectiveness, achieve and maintain customer satisfaction, implement mobile payments, developing the best and most useful and user friendly online shopping browser extensions as well as native mobile shopping apps is crucial for retailers who want to keep or improve their sales in the upcoming years!
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