Greg Brown, vice president of global marketing at Melissa Inc.

Coronavirus is accelerating change in the way we shop—from cashless purchases to contactless delivery, online buying for just about anything and everything has arrived on a global scale.

The changes may be here to stay, too, as millions of consumers worldwide develop and reinforce new online buying habits. As many expand their online buying and others shop online for the first time, it is becoming clear that in either case, these behaviors are likely to become a long-term part of our lifestyles.

At its peak and as it subsides, the effects of the virus will have retailers focused on capturing and retaining customers. Many of those customers not only need support in the face of continued lockdowns and store closures but have also embraced new social distancing routines in purchasing groceries, clothing, household goods, entertainment and more online.

Retailers must be prepared to handle permanent change, or at the very least, more widespread ecommerce demand, until a vaccine reshapes the landscape further.

Having an ecommerce website is not enough. Retailers must rethink their offerings, customer services, and even online marketing policies to ensure a place in their customers’ expanding new online buying world. It all comes down to the effective use of data. And using data well requires acknowledging that valid customer addresses are the foundation of a functioning supply chain, cost minimization, and fraud prevention.

Address data may seem basic, which is perhaps why retailers often overlook it as a key driver of their strategic insight and growth. But ecommerce businesses must prioritize getting address data right to remain competitive in a booming (and growing) industry.

Address quality needs span the globe

Many challenges retailers face can be tied directly to bad address data. Whether it is delivering goods, direct mail marketing, or even fraud prevention, wrong addresses are a high-cost, no-reward business expense. Delays in deliveries and returned mail are obvious problems. The effects include immediate cost issues related to time, materials, and postage – but the potential to lose customers is an even deeper problem that can handicap a retailer for the long term. Bad data creates poor service that impedes customer satisfaction, including their journey and relationship with the company.

While many issues are consistent for both domestic and international retailers, there are specific challenges for each type of retailer, requiring attention in today’s hyper-competitive retail environment:

• Domestically, retailers must identify where customers have moved, ensuring shipment of the correct product to the correct recipient at the right address. Retailers can do this by capitalizing on United States Postal Service NCOALink (a dataset of approximately 160 million permanent national change-of-address records) or non-USPS NCOA services.
• Improving delivery through better address quality is critical. This includes adding missing but known secondary suite info, regardless of who lives at that address. To do this, retailers can use tools such as the USPS Suitelink service—which provides improved business addressing information by adding known suite information to business addresses—and residential delivery indicator (RDI) tools that avoid residential delivery surcharges. These tools provide value by preventing address correction fees that carriers pass on to the shipper, correctly identifying residential deliveries, and choosing the best and most cost-effective shipper as a cost minimization strategy.
• Internationally, U.S.-based shippers are forced to acknowledge and manage ongoing postage increases in cross-border shipping. Address autocompletion and standardization is critical, given there are hundreds of international address formats that can cause costly shipping errors if not managed correctly.
• Integrated tools also streamline matching of names to addresses, creating a speedy and low-cost electronic identity verification (eIDV) “lite” type of fraud prevention.

By maintaining properly standardized and formatted global address data, retailers have a strong foundation for downstream processes like change-of-address checking, credit and identity checks, managing duplicate data and enriching data with socio-demographic characteristics. The same good data also provide a basis for (professional) master data management, for example, sharing correct clean address data with direct marketing campaigns to empower higher response rates.

Tech-forward solutions reduce working hours and streamline the customer experience

Keeping data clean from the moment it enters a data system is the ideal starting point in customer address management. To achieve this, retailers should create a data quality firewall that automatically ensures that only clean data flows into their systems. Integrated tools eliminate manual efforts and can check and correct potential errors immediately upon data entry, passing a rigorous validation process that makes sure addresses are accurate and deliverable.

For example, address auto-completion tools not only ensure clean, deliverable address data, but they also speed customer checkout. If just a few keystrokes can enable customers to fill address fields automatically with valid information, retailers can accelerate address acquisition and mitigate entry errors simultaneously. This simple competence adds significant value to checkout and onboarding procedures, which heavily influences the customer experience and the customer journey.

Address validation plays a role in reducing online fraud 

Credit cards are by far America’s preferred online payment method, accounting for 47% of all ecommerce transactions, or $348.74 billion annually. Yet, purchases made with stolen credit cards billed via a card-not-present technique cause up to 30% of chargebacks. These contested purchases, in which something is shipped and then disputed by the card owner, are costly mistakes. Merchants pay $2.40 for every dollar of fraud taken by an online criminal, including paying back the cost of goods retailers don’t get back.

Retailers can counteract card-not-present fraud with plausibility checks of the contact information or digital identity checks. Address validation here is considered part of a know-your-customer (KYC) initiative. By defining incorrect and non-verified address information, KYC provides cost-effective support for fraud prevention in the initial steps of onboarding. “Customers” who give an unreliable address can then be limited to certain payment options. Retailers can even wholly block questionable shoppers from making a purchase.

Streamline the entire customer journey to grow beyond borders

Valid address data is an essential prerequisite—enabling faster, error-free order processing that drives customer satisfaction and loyalty. Data tools integrate effectively with online shop platforms and customer relationship management (CRM), enterprise resource planning (ERP) and supply chain management software. The excellence of address data affects all applications in the value chain: payment, warehouse management, inventory management, addressing, shipping, logistics, route planning, and accounting to collection, if necessary. For example, accurate customer data stored in a CRM system can also be of central importance in other areas such as customer support, marketing, or accounting, all of which help grow an ecommerce business beyond its borders.

This extensive scope of impact should have retailers considering the 1-10-100 rule when valuing their data quality operations and technologies. With professional address verification software, it costs an average of $1 per record to verify at the point-of-entry. If retailers intermittently clean up data held within ERP or CRM systems addresses—things like updating and deduplicating records via batch processes—the cost jumps to about $10 per record. And if retailers do nothing to fix bad address data, the price leaps to a whopping $100 per record. That $100 includes the cost of lost opportunities, wasted time and materials, unfruitful marketing efforts, a poor reputation—and, ultimately, lost customers.

Although these figures reveal exponential growth opportunities, they also highlight that ecommerce remains a highly competitive landscape where the customer experience has a large effect on sales. Customers today expect online transactions that are fast, seamless, and friction-free. This represents a high bar for retailers, likely to rise even higher as more businesses make the competitive shift to ecommerce operations and work to distinguish themselves as a provider of choice for homebound shoppers.

Melissa Inc. offers date quality, data management and data enhancement products.