Retail margins are always under pressure. And while today’s growth in digital commerce streamlines so much for retailers and shoppers, it also means new opportunities for bad data to cause problems at multiple points in the shopping experience. Some of the most persistent margin leaks are caused by bad addresses. When address or identity data is missing, incomplete, incorrect, or just plain fraudulent, the negative impact reverberates across the entire path to purchase, driving avoidable cost increases in fulfillment, marketing and fraud prevention.

The most obvious hit comes from failed deliveries and returned mail, adding costs for re-shipping, postage and customer service handling. But what follows is even bigger, as missed deliveries trigger refund claims and increased customer service interactions. Is the claim dismissed as fraud, or is the customer legitimate? Either way, your profit margin is in jeopardy, either with a sham transaction or poor handling of a valuable customer.

Is this the ‘cost of doing business’ or can retailers do better? Clearly, data quality is an underused tool to protect margins from end-to-end and should be integrated into retail operations from customer purchase to product fulfillment and delivery.

Start at the beginning and then deliver

In the battle for the bottom line, avoiding bad data from the start is just common sense. Melissa’s address verification and autocomplete tools create a solid data foundation for all retail operations. In real time, only valid, standardized address information enters the system, with verification extending to worldwide address data and the unique aspects of regional address formats. 

Sellers avoid missed deliveries, carrier surcharges and re-shipping costs; plus, tools like Residential Delivery Indicators allow the correct choice of shippers and delivery requirements for home vs business deliveries. Overall, correct, verified and standardized address data powers more intelligent delivery decisions, reduces unnecessary fulfillment costs and keeps customers happy.

Tie address data to fraud prevention

Great address and identity data form the basis for electronic identity verification (eIDV), low-cost fraud checks that block high-risk transactions. Additional tools like name matching, geolocation and mobile phone checks enable seamless fraud prevention in real-time. These operations are critical, as fraud increasingly happens before the transaction itself, with the setup of false accounts, loyalty programs and subscriptions.

Data quality tools help spot risky patterns earlier, reduce false positives and keep legitimate customer transactions flowing smoothly. Better data empowers retailers to be more precise, not just restrictive, which helps protect overall customer conversion.

Don’t waste resources trying to reach unreachable customers

First-party data, or data you’ve collected directly from your customer, is continually growing as retailers create new data sources by offering customer accounts or newsletter signups, tracking site visitors and building up social media followers. It’s also continually changing as people live their lives, for example, moving or changing jobs and emails.

Customer data decays quickly and intermittent data quality operations aren’t enough to protect margins for the long term. Integrated address and identity tools perform ongoing data cleansing and updates, helping retailers avoid missed opportunities caused by poor targeting, unreachable contacts, or duplicate customer profiles. The same tools can validate customer emails and mobile phones to stop undeliverable emails and SMS messages. Losing repeat business may be the biggest drain on business margins, so keep personalization on track by enhancing customer profiles with demographics and firmographics. Data quality supports the wise use of marketing dollars, protecting customer acquisition cost (CAS) and return on ad spend (ROAS).

Data quality is a continuous margin protection strategy

Melissa’s tools and solutions recognize that any growth strategy needs to start with protecting current customer relationships and the profit margins they represent. To keep operations smooth, efficiency doesn’t need more headcount, just fewer preventable errors. Discipline counts and a data quality foundation means catching errors earlier and being able to scale growth without scaling losses.

In retail, margin erosion doesn’t usually come from big misses in company strategy, but thousands of small, preventable failures driven by bad data. These profit leaks can be diverse and so they are often treated as separate problems. Failed deliveries, wasted ad spend, poor conversion and fraudulent transactions all require different operations to solve and yet they all share a common foundation of customer data. If the root cause of these leaks is bad or unreliable data, then data quality may be one of the most overlooked protectors of business margins.