The Covid-19 pandemic accelerated the uptake of e-commerce globally as people turned to online shopping in the face of lockdown restrictions. A recent industry report reveals that e-commerce will account for 20.4% of global retail sales by the end of 2022, almost double since 2017. Consequently, the e-commerce space is becoming more crowded with stiff competition leaving retailers excited as well as apprehensive about the endless opportunities to expand market share and drive GMVs.

For any e-commerce company, being able to properly accept, fulfil, and ship orders forms an important aspect of creating a loyal customer base. And it begins with having the right customer database. Having an accurate address database helps e-commerce businesses to reduce RTO losses and avoid additional shipping costs along with improved customer experience. For instance, a merchant has to pay the logistics partner for attempting delivery and if the products have a limited shelf life, it’s an added loss. This incurred loss can be heavier if the order is a Cash on Delivery (COD) order, where the customer pays upon delivery. RTOs present a major issue to the e-commerce ecosystem in India, with nearly 30% of orders on average resulting in RTOs across stores and brands.

Read How to reduce RTO losses and supercharge your D2C store’s growth

While RTOs happen due to a variety of factors such as the fraudulent customers, cancellation of ordered items, logistics issues etc, one of the prominent factors is due to incomplete or wrong shipping address provided by the customer. This can mean that the address does not contain the details that make delivery possible. Even  a missing digit in the street number can render the shipping address undeliverable.

Failed deliveries lead to customer churn and negative impressions can affect your company’s brand image in the long run. Research shows that it takes just 3 negative reviews to drive away 60% of potential customers. A seamless delivery is, therefore, essential for a better customer experience. 

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The problem of faulty addresses

How can a customer get his address wrong on your checkout page? Well, as it turns out, in many ways.

a) In most cases, it's only a simple typo where a couple of digits in a pin-code gets swapped or a letter or number is left out of their street’s name. 

 b) In a given household, each member may write the same address in different ways. There is no uniformity and common errors include typos, misspellings, and omitting crucial information such as road names and landmarks.

c) India is highly diverse linguistically and hence shipping addresses may be written in other languages. Also streets and roads are referred have different names in different languages which can pose a problem.

d) While buying a gift for someone else, customers often want it shipped directly to the recipient. They may not be well aware of the recipient's address and may make a mistake.

e) Even different carriers have different requirements.  A customer may be used to receiving all their shipments via a specific carrier that always accepts their address the way they type it, while a different carrier may need the address to be rendered in a specific way. For example, Amazon may be used to delivering your packages in your pin-code while your local post office may require it to be written in a more precise way.

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Why do correct addresses matter?

Unfortunately, address errors can really impact your business’ bottom line. When a customer enters an inaccurate delivery address, they won’t be able to receive it at the estimated time of delivery.  If they are lucky, their package will be delayed at best, if it's not returned to you or lost. Not only will this annoy customers, but also cost you money to replace the order or ship it again — and if it happens frequently, it will hit your margins and you may end up losing customers you otherwise could have retained.

1. When a customer's shipping address is entered incorrectly, there will be additional costs involved in getting their order to the correct destination. The exact amount depends on the situation and the shipping carrier used.

2. If the package is lost, you'll have to bear the loss and even compensate the buyer. This could be a significant hit on your profit margins.

3. If the package simply gets returned to you, extra shipping charges will be levied to ship it again (This time, to the correct address).
   
   
   

Blaze for your address validation woes

Given the cost of acquiring a new customer versus retaining an existing one, service failures are often the biggest hazard of all. Businesses that adopt Machine Learning(ML) technology manage to address most challenges of faulty shipping addresses and can reduce the chances of RTO and additional shipping costs.

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A risk assessment tool such as Blaze enables online stores to make more accurate shipping decision in real time by decoding digital identity more comprehensively without affecting  the transaction latency or time to complete a sale. With Blaze’s address validation, the RTO ratio improves by 30-40% for e-commerce stores.

  Blaze also checks for the following:

1. Weed out fake addresses: Detects monkey-typed addresses (random and often repetitive sequences of characters which the user inputs in the address fields to get to the next screen).
   
   
   

2. Validates the authenticity of an address: Determines whether the address corresponds to a house or an apartment and automatically updates from existing address databases in case of typing errors by the customer.
   
   
   

3. Validates the deliverability of an address: Checks official postal databases for address validation.
   
   
   

4. Warns against risky address highly prone to RTOs: Identifies potential RTO in real-time, pre-shipping. AI-powered order risk assessment evaluates past order behaviour.
   
   
   

5. Auto recommends COD option to be disabled for high RTO risk orders.
   
   
   

6. Guarantee against RTO losses: 100% protection against RTOs for Blaze-approved orders backed by India’s first-ever RTO guarantee.

Want to know more about how to increase conversions, check this out.