Reducing Costs: Improving Customer Data Solves Both Fraud and Shipping Problems
Not quite everything in the world of e-commerce is digital. Shipping, based on customer-provided data, may be the weakest link in a smooth, cost-effective transaction. Even slight inaccuracies can delay deliveries, add expensive reshipping fees, and create unhappy customers in the process. Equally painful to any supplier are credit card chargebacks, charges to cover return costs, and additional penalties.
“Shipping can definitely be a pain point with e-commerce and mail orders, and problems here can really impact customer retention,” said Michael Marchetta, director of marketing operations at Jerry’s Artarama, a Raleigh, N.C.-based supplier of fine art painting supplies like brushes, paints, easels and drawing materials. With 16 physical locations in the U.S. and a substantial online business, Jerry’s is a mainstay supplier for art schools, individual artists and hobbyists who want professional equipment.
Yet with simple changes that integrate data quality into the ordering process, Jerry’s has turned around the potential for shipping losses — and managed to connect the same value to its credit card processing operations as well. Customer records are validated in real time for both address and credit card verification, driving a 30 percent improvement in related costs.
Shipping as a Pain Point
“Address verification had been a traditional challenge for Jerry’s,” Marchetta added. Online customers often mistype addresses or provide information that was otherwise "slightly off," for example while ordering via their phone. Business addresses are usually treated differently than residences for delivery purposes, and the occasional misidentification of one for the other would also result in lost packages and incorrect shipping charges. “And with the increase in mobile phone orders, the ‘fat fingers’ syndrome caused even more incorrect addresses,” Marchetta observed.
To solve the challenge, Jerry’s now uses easily accessible cloud-based software, both to validate contact information and to update addresses for customers who have moved. In addition, the tool verifies the customer’s entire record, matching a particular name to an accurate email address, phone number and physical address, while adding geographic and demographic data for better segmentation and targeting by the marketing team.
The process also calculates the shopper’s precise distance from distribution points, enabling quick calculation of shipping costs at several price levels, depending on how fast the customer wants delivery.
Integrating Magento Increases Customer Confidence in Shipping Confirmations
Jerry’s opted to add Magento's data quality software, enabling an autocomplete address verification feature. As a customer types in an address, the tool automatically presents a suggested correct version, allowing the customer to choose a valid address that’s easily recognized by shippers.
Magento-based sites also add missing components such as region or postal codes. Jerry’s team estimates that the automated process cuts data entry keystrokes in half, thus speeding checkout and reducing shopping cart abandonment.
“The beauty of the Magento plugin is that it shows the customer right away that they’re going to get their package delivered to a correct and validated address, while protecting us against any errors caused by entering data on a too-small device,” Marchetta said.
Jerry’s data verification capabilities are global, supporting customers from more than 240 countries and playing a key role in the company’s growth plans. “International markets represent a key opportunity for us,” Marchetta said. “Having the correct tools not only means we can verify particular addresses that are matched with their countries, but also accurately consolidate orders.”
Better Data Also Means Less Fraud
The same software is helping address one more challenge facing all e-commerce sites: fraud. The unfortunate fact is that personal data, including credit card information stored in massive databases at banks and retailer databases, are sometimes hacked by international operatives. The company can determine in real time if a customer is who they say they are, cross-validating shipping and billing addresses, phone numbers, email addresses, and even IP geo-location.
“Jerry’s technologically fortified website now enjoys a 30 percent reduction in ordering mistakes,” Marchetta said. With both reduced returns and foiled fraudulent orders, significant savings in shipping costs and penalties are not only improving business, but also driving noticeably stronger customer satisfaction and retention.
Greg Brown is vice president of Melissa, provider of global contact data quality and identity verification solutions that span the entire data quality lifecycle and integrate into CRM, e-commerce, master data management and big data platforms.
Related story: Conquering Cart Abandonment With Shipping Predictions
Greg Brown is vice president of Melissa, provider of global contact data quality and identity verification solutions that span the entire data quality lifecycle and integrate into CRM, e-commerce, master data management and Big Data platforms. Connect with Greg at email@example.com or via LinkedIn.