Want To Be A Successful Online Retailer? Pay Attention To Data Quality
Ever wondered why two websites that sell similar products don’t have the same sales numbers? Why does one website become wildly successful while the other fades into obscurity? Since they source their product range from the same manufacturers, it couldn’t be about product differentiation. The marketing budget is an important consideration but is that all? No!
For offline stores, it’s all about Location! Location! Location! For online stores, it’s all about Data! Data! Data! That said, just having tons of data isn’t enough. The data you hold needs to be good quality data. The quality of your data is what will determine your chances of success and make your website stand out amongst the rest. Having access to good quality data and knowing how to use it is key to successful online retailing. Here’s how.
Drives product recommendations to increase the transaction value
The role of a salesperson in a store is not just to help the customer find what he’s looking for but also to make suggestions on what he might want. While an e-commerce website may not have salespeople to make recommendations, this is something that still needs to be done. The way a website makes product recommendations depends on the data it has access to. This includes data such as a customer’s demographic persona, past purchases, browsing history, etc.
For example, if the customer is a female who has recently bought a baby’s jumper, the website may recommend baby shoes. The ability to make the right product recommendations depends on how reliable the data is. For example, in the above case, if the data did not include the fact that the jumper was bought 2 years ago, the recommendation would not result in a sales conversion.
Makes inventory management more efficient to reduce overheads
Managing inventory is all about ensuring that you have enough stock of a product to meet customer needs without storing more than what’s needed. Inventory management is important because stocking products needs storage space which is associated with a certain cost. This affects the company’s profit margins and overall success.
Data helps inventory managers determine how much of each product needs to be stocked. This decision is based on past sales numbers, projected future sales, etc. Thus, if the data were of poor quality, the decisions taken based on it would not be in the company’s favor.
For example, a company projection numbers suggest high sales of a particular product in Pune. The company decides to stock ‘X’ number of the product in a nearby warehouse to minimize delivery costs. But, let’s say two digits in the pin code of the sales data got interchanged.
The actual pin code was 141004 not 411004. 141004 is the pin code for Ludhiana – over 1700 km away from Pune. This means that instead of reducing delivery costs, the company would now have to pay extra to have it shipped to the customers.
Personalizes customer interaction to retain their loyalty
One of the basic rules of running a successful e-commerce venture is personalizing customer interaction. This begins with the ability to address customers by name rather than “Sir/Ma’am”. It’s comparable to brick and mortar stores- a customer is more likely to go back to a store where he is recognized rather than one where the salespeople do not make an effort to get to know him.
That said, a customer named ‘Rohan’ is not likely to be impressed if he received an email addressed to ‘Rehan’. This is a mistake that could occur if the data used is of poor quality and the customer’s personal details have not been verified.
Reduces delivery timelines to improve customer experience
Since a product can be sold by more than one e-commerce retailer, ultimately, a customer’s decision on where he buys it from is based on customer experience. The speed at which a product can be delivered is crucial here. This is where data comes in again.
If a customer makes a typographic error when entering their address and mentions the wrong street, the delivery may be delayed. But, if the organization can correct the address and complete it, they would be able to deliver the product on time. Though the delay would not have been the website’s fault, it would affect the perceived value of the company. Surprisingly, a number of consumers expect retailers to resolve delivery related issues even when they are not at fault. On the other hand, on-time deliveries are always appreciated.
Ensures accurate product reviews to increase consumer trust
Since customers cannot interact with a product online as they can in offline retail stores, product reviews play an important role in building trust in the brand and completing a sale. Reviews are typically written by customers who have bought the product earlier. What if the review turned out to be fake or if it was linked to the wrong product?
For example, if the retailer was using poor quality data, they may not be able to link reviews to the right product. The review may mention features that are absent in the product and thus give a false impression to other customers.
In conclusion, improving data quality is a must for all online retailers
A data-driven model is instrumental in the success of an e-commerce website. But, if the data is inaccurate, inconsistent, or irrelevant, it can have a negative impact on your brand value. Standardizing data formats; removing duplicate values and making corrections wherever possible such as matching the customer’s address with their pin code can go a long way in improving data quality. This, in turn, will help businesses make the right decisions for their future.