Geocoding and Why Address Verification Matters for E-commerce

Using technology to translate, correct, verify and pinpoint delivery addresses doesn’t just reduce the burden on drivers–it is a stepping stone to truly optimized last-mile delivery.

Geocoding and Why Address Verification Matters for E-commerce

Faulty fulfillment derails e-commerce success. Aside from the additional costs incurred in the form of refunds, future discounts, or waiving shipping fees, a failed delivery can lead to lost business in the long run as negative impressions spread through word of mouth. Research has found that just 3 negative reviews can drive away 60% of potential customers. 

Inaccurate delivery addresses are a major cause of these failures: a study of global retailers found that it can cause up to 71% of delivery delays and 57% of failed deliveries. Making matters worse, one-third of those surveyed either did not perform address verification or expected couriers to perform it themselves. The results can be damaging, with order cancellations in 43% of cases and customers moving to competitors in 27%. 

With online sales volumes continuing to grow in the wake of the pandemic, stepping up the focus on address correction and validation is critical for e-commerce players to maintain customer loyalty through a smooth last-mile experience. 

 

Technology is key to untangling the address accuracy knot 

 

Customers should not be made to bear the burden of address accuracy. Surveys have shown that 61% of online shoppers would abandon their carts if they ran into issues entering their address details. Whether these issues are unrecognized address formats, dropdown lists not containing key address details, text fields being too short to fit a full address or any others, the onus is on the seller to provide as clean as possible an interface for address entry–and then verify the data. 

Geocoding solves this problem by automatically completing and validating addresses, before converting them into latitude/longitude coordinates. With on-demand access to this, delivery drivers will be able to home in on recipients’ locations with little intervention needed–in the event the latter still proves necessary, technology has made it possible to easily connect with customers for guidance through the same platform, easing the process and saving time. This is especially crucial in developing countries where address formats are often inconsistent or unstructured, and calling the customer for street-level directions is common practice. 

Aside from helping to keep customers’ satisfaction high by getting deliveries to their doorstep with minimal hassle, geocoding serves as the first step to an optimized last mile. 

 

Address accuracy unlocks delivery optimization 

 

The effectiveness of route optimization is directly linked to the effectiveness of geocoding. Although route planning software can maximize fleet productivity and savings by calculating the shortest and most fuel- and capacity-efficient routes for drivers, the algorithms driving this process can only shine when the address data provided is accurate.  

Similarly, real-time tracking of packages–desired by as much as 93% of e-commerce users in a consumer study–depends on accurate geocoding. Brands that leverage this for proactive communication with customers in the event of a delay have been seen to receive higher ratings than brands that experienced no delays at all. With nearly half (47%) of consumers stating they would not order again from a brand with poor delivery visibility, geocoding is increasingly shifting from a competitive differentiator towards the fundamental requirement. 

Much has been made of the high costs of last-mile fulfillment. As the post-COVID e-commerce boom continues, brands stand to rack up more of those costs from failed deliveries abroad than domestically. The use of geocoding to ensure addresses are translated, corrected, verified, and pinpointed will help e-commerce players ensure customer satisfaction and profitability, particularly in emerging markets. 

 

Book a demo with us today and take that first step towards optimized fulfillment with automated, high-accuracy geocoding. 

 

Sources: 

https://www.enterprisetimes.co.uk/2021/03/09/research-reveals-the-cost-of-failed-deliveries/ 

https://magento.com/sites/default/files8/fixing-failed-deliveries-community-insight.pdf 

https://www.digitalcommerce360.com/2019/04/05/how-a-lack-of-delivery-visibility-produces-frustrated-customers/