The 2024 holiday shopping season kickoff delivered record-setting performance, with Black Friday and Cyber Monday once again confirming their status as the most critical dates in the retail calendar. These peak shopping days tested the limits of retail infrastructure, logistics and compliance systems like never before. While Cyber Week 2024 may be over, the lessons it teaches us are just beginning.
Scalable systems are non-negotiable.
Businesses using Sovos’s Tax Determination software saw sales volumes soar by 92% on Black Friday, followed by an 83% uptick on Cyber Monday—illustrating the sheer scale of growth since 2023. As consumers bask in the thrill of snagging once-a-year deals, behind the scenes, retailers are running a high-stakes relay race.
Scalability doesn’t start or end at surviving Black Friday and Cyber Monday. In today’s retail ecosystem, it requires a lot more than handling traffic spikes. Building an infrastructure for growth is about ensuring every part of the machine—eCommerce platforms, payment processors, tax engines, inventory systems and logistics—works in harmony.
Every moment counts. Discounts must apply instantly. Tax calculations must be accurate. Inventory systems must stay in sync. And orders must process without a hitch. If even one step falters, retailers risk more than lost sales; they risk losing customer trust.
Take tax compliance, for example. While it might not be the most glamorous part of retail, but it’s become an integral aspect of the customer experience. Sovos processed nearly 300 million line-items on Black Friday and Cyber Monday alone, each with its own unique tax requirements, location-based rules and promotional discounts.
Imagine the complexity: one shopper is taking advantage of a tax holiday in their state, while another is purchasing the same item in a jurisdiction with entirely different tax rules. One misstep could hold up checkout. A miscount of inventory could lead to overselling. A misstep in integrating promotions could leave a shopper feeling cheated. In this environment, even a minor glitch ripples outward, risking revenue, customer loyalty and brand reputation.
Real-time cracks the compliance code.
The challenges do not end at satisfying shoppers, either. Governments worldwide are raising the stakes with stricter tax compliance measures, such as Continuous Transaction Controls (CTCs). These mandates require that transactional data be submitted and approved in real time, making accuracy and responsiveness even more critical retailers.
In a CTC world, scalability takes on a new dimension, whereas systems must deliver precise tax calculations and ensure compliance across jurisdictions without disrupting the shopping experience. Therefore, retailers must be ready for real-time reporting and validations, even during peak periods when systems are under extreme pressure.
Think beyond the transaction with your data.
Peak season performance is not the result of last-minute efforts, but the culmination of year-round preparation. Underpinning every successful Black Friday and Cyber Monday is data—lots of it. This data is a treasure trove of insights that can drive smarter decisions and long-term growth. Retailers who leverage it effectively can uncover patterns in customer behavior, identify operational bottlenecks and predict future trends.
For instance, transaction data can reveal which products are most popular in certain regions, helping retailers optimize inventory for local demand. Insights into cart abandonment rates during flash sales can guide improvements in checkout processes or promotional strategies. Even compliance data, like tax discrepancies or errors, can inform how to fine-tune back-end systems to ensure smoother operations in the future.
Mastering modern commerce: What’s ahead for retail?
Black Friday and Cyber Monday 2024 revealed which retailers are equipped to handle the complexities of modern commerce, and which have room to grow. So, what does it take to truly scale in this new world?
- Treat scalability as an ongoing process. A seamless flow between eCommerce platforms, tax engines and inventory management eliminates bottlenecks and reduces friction. Integrated systems enable retailers to deliver consistent, accurate experiences for consumers while minimizing errors and delays, even during peak periods.
- Prepare for future compliance complexities. Retailers that prioritize real-time data processing and decision-making can respond to evolving customer and regulatory demands with precision and agility, ensuring smooth transactions even under pressure.
- Put your data to use. The data collected during peak shopping days is a goldmine for future planning. Use it to identify patterns in customer behavior, predict inventory needs, refine marketing strategies and uncover operational inefficiencies.
