Why customer data quality is important in the omnichannel era
The rise of omnichannel creates new ways to engage and attract customers but it also presents new challenges in many areas, including customer data quality.
Customers are more demanding than ever and expect that brands can better understand and address their individual wants and needs. But, consumer behavior patterns have become less predictable, so it is essential that retailers can track the interactions of their customers through time and across different channels, and collect accurate, up-to-date data.
The better the data retailers have on their customers, the greater the impact that data will have in different areas:
- Better decision making: Having high-quality, accurate and up-to-date data gives retailer greater confidence when making decisions based on this data;
- Improved productivity: Ensuring the data is error-free enables staff to be more productive as they do not need to spend time validating data or correct errors manually;
- Better marketing: Accurate and up-to-date data enables better targeting and more precise communications, which is especially important in an omnichannel environment with more complex path to purchases.
We can better appreciate the importance of data quality – and the high cost of bad data – using the 1-10-100 rule.
Let us say that it costs €1 to verify that a piece of data has been entered correctly. By spending €1 on verification at the moment of data entry, we avoid having to later spend €10 to fix an error discovered later. But if we don’t fix the error, the consequences of the error in lost sales or reduced profit might be €100.
Indeed, bad data has direct and indirect financial consequences. The direct cost is easy to calculate and let’s use an example that is particularly topical, of an online order. If an online order cannot be delivered because the customer’s address was entered incorrectly, the retailer will incur direct costs.
Because of the pandemic, many retailers have experienced a significant increase in online orders this year, but according to one survey, one order out of 20 is not delivered correctly on the first attempt. This creates additional costs for the retailer, who must either pay extra to attempt to redeliver the article, or must accept it as a return if the customer is not prepared to wait any longer, and refund the cost.
The main reason why orders do not arrive on time is the retailer fails to collect accurate address data. Maybe the customer typed ‘44’ instead of ‘4’ for the street number when entering an online order, or maybe the store assistant made the same mistake when collecting the customer’s address on a POS terminal in a store.
In fact, four in every five retailers say that customers often don’t realise that failed deliveries are due to the fact that they mistyped their address.
As well as the direct costs of bad data, there are costs that can be more significant. For example, if a customer’s email address is entered incorrectly when the customer signs up for a loyalty program, the retailer loses the opportunity to communicate with a customer who has clearly expressed an interest in receiving such communications.
The brand forfeits one or more future purchases, and also leaves a bad impression with the customer.
This is why, in the omnichannel era, it is more important than ever to invest in preventive solutions that can validate customer data at the point of entry, so improving data quality and customer satisfaction.
Capency, a specialist in customer data quality, and Openbravo have jointly developed a solution to execute real-time data validations on any transaction managed by Openbravo that involves customer data like postal addresses, emails and phone numbers, in components such as the Openbravo POS, Openbravo OMS or Openbravo WMS.
To find out more about the importance of customer data quality for omnichannel retail, please contact us.