Why Data Verification Is Key: Watch Out for These 3 Retail Risks

While we’re still a few weeks away from the holiday season, savvy retailers know that now is the time to start planning for the peak season. You’re likely already considering the campaigns and sales that will be featured this year. But are you thinking about data verification? Do you know if you have the correct contact data to help make your promotions successful?

What if expected sales over the peak retail season don’t materialize? How many business plans and revenue goals would be affected for months, if not years? These are the consequences if you don’t use data verification to ensure the accuracy of your contact data. Although some things are not under your control, such as bad weather or carrier delays, you can control the quality of your contact data through verification.

The huge opportunity presented by the holidays looks set to increase this year, with retail sales growing by up to 9% and ecommerce growing by up to 15%, according to Deloitte.

Customer communication is the key to driving these sales online and in-store. But a real risk to retail revenues is invalid customer contact data. 

Customer email and postal address data verification

One of the customer communication methods with the best ROI is email. Equally essential is postal mail.

Without an accurate postal address, it’s unlikely customers will receive their packages when expected. Data verification ensures you have accurate email and address contact data, so you can meet customer expectations, reduce costs, and achieve sales goals during the most hectic time of the year. 

Why data verification is key during the peak retail season

Email is important for multichannel retailers during the peak season. It’s your best bet for communicating with customers about key promotions. For example, you may send emails on Black Friday to announce online and in-store deals. Additionally, you may send emails on Cyber Monday to drive online sales. You may also email customers at the end of December for one final holiday push. And it doesn’t end there: Once the holiday season is over, retailers push post-holiday sales and markdowns to customers.

If you don’t use data verification, you’ll miss out on these opportunities to reach customers. And it can spell disaster. If you fail to alert customers to these holiday promotions, your shelves and warehouses may remain full.

Unfortunately, invalid customer contact data is a common issue when it comes to email communication. Email volumes increase during peak season, and retailers tend to reach out to every contact record they have at this time, including legacy data. These practices can damage your email sender reputation.

Consequences of poor email sender reputation

Any retailer, big or small, that emails a list of contacts is at risk of not being able to reach customers due to a poor sender reputation. In fact, 83% of the time an email is not delivered to an inbox, it’s due to a poor sender reputation. Historically, more email senders experience blocks or end up in the junk folder during the holiday season than at any other time.

A poor sender reputation can cause your emails to be blocked, which means they’ll never reach your customers. Having a low sender reputation is like having a low credit score. If you have a low credit score, you’re limited to what you can do in the financial world. If you have a low sender reputation, you’re limited to what you can do in email marketing campaigns.

The consequences of poor sender reputation can be severe. If you don't reach customers, your sales will suffer. We spoke to many retailers, including those in the Fortune 1000, that are changing how they send email due to modern best practices like data verification and email hygiene. Find invalid and suspicious email addresses so you can remove them—before contacting them.

Retail risks of not using data verification

Risk #1: Spam traps

A spam trap is an email address no longer in use by its original owner, so the email service provider (e.g., Gmail) takes control of the address to use it as a trap for spammers. The email service provider (ESP) assumes that any email sent to that address must be from a spammer.

Since the email address is no longer a valid communication method for that original customer, retailers and other senders should remove it from their contact lists. Even emailing only one spam trap can destroy your sender reputation. The chance of this happening decreases if you acquire your email lists organically, but increases significantly if you purchase your lists. Informatica benchmark studies found that, on average, about 1% of an entire database has email addresses that fall into the “spam trap” category. While that small percentage may seem trivial, it can destroy all your efforts for the other 99% of your list.

There is a specific type of spam trap you might fall into even if you acquire your list organically—the typo trap. Misspelling an email address can cause trouble. It’s common practice for spam traps to register common domain misspellings of popular ESPs or use temporary email accounts to catch spammers. Just remember that spam traps can exist anywhere, whether you acquire your email addresses organically or not. 

Risk #2: Old contact data

Other risk factors that affect your ability to send email include:

• What percentage of messages are accepted?
• How often do messages bounce?
• How often are you emailing malicious or suspicious email addresses?

Because of these factors, one of the worst mistakes you can make is dipping back into stale contact data. Going back to this old data without using data verification and cleansing can jeopardize your peak season efforts. The holidays should be about engaging your active customers, who are more likely to purchase—not reawakening past customers through old data.

Retailers typically increase their email volumes during the peak season. However, sending too much email is one pitfall that can damage your reputation. Besides customers potentially tuning you out, they’re also more likely to flag your email as spam. Over-sending can also be a red flag for ESPs and harm your sender reputation.

And while you may think your peak-season email volume is reasonable, consider these other types of emails that may be less obvious:

• Customers emailing last-minute gift cards, increasing your volume unpredictably
• Service-oriented emails (e.g., abandoned shopping cart reminders)
• Welcome emails when someone joins your mailing list, which are likely to increase as customers seek out deals
• Receipts sent after a customer makes an in-store purchase
• Automated, post-sale customer satisfaction surveys

Be thoughtful about the amount of email your organization is sending out around the holidays and decide if higher volumes are worth potentially losing subscribers, higher spam complaint rates, and having customers tune you out due to oversaturated inboxes.

Risk #3: Digital-first and omnichannel retailing

Omnichannel retailing means putting the customer experience first and delivering the same personalized experience across all channels, whether in-store, online, mobile, social, or by phone.

As a retailer becomes more omnichannel, it’s creating more ways to acquire customer data. More places to collect data means more places for invalid and suspicious information to make its way into your contact lists. Digital channels, in particular, are becoming more popular with customers every year. Cleansing and verifying this data at the point of entry—before you email or send postal mail to a customer—is the best way to eliminate this as a risk factor.

Accurate addresses are retail gold

Many ecommerce sites offer overnight shipping or guaranteed arrival by the holidays. To stay ahead of the competition, you want your customer experience to outshine the others. By focusing on data quality (e.g., accurate addresses), your customers can receive their orders on time, as you promise.

Due to the variety of contact data entry forms on ecommerce sites, mistakes can easily occur. Different field names, page frames, and data flows confuse even the most experienced user. This often results in incorrect, incomplete, or missing customer data.

Using address verification to ensure the quality of your contact data ahead of time—before the customer’s order is packed—helps ensure that orders arrive on time. Address quality also reduces the time that employees must spend manually correcting addresses and dealing with returned mail, which is especially important during peak season.

Data verification best practices

First, use a batch process for an entire set of existing contact data all at once, run on a regular schedule. Then, apply a real-time data verification and hygiene process at the point of entry, whether on a web form, shopping cart, CRM, or any other channel where an email address is added to your contact data. These two implementations improve your data in the two places it lives: as existing data and as future incoming data.

Data verification checks if an email address fits industry email standards, determines if the domain name exists, and checks against mail servers to validate whether a specific username exists. Email hygiene works as a forensics unit for your email contact lists. It locates email domains involved with spam networks, traps, and other malicious threats.

You should also apply address verification at the point of entry and in batches. Address verification solutions can do more than verify that an address exists. For example, Informatica Address Verification provides valuable features like:

• Parsing to identify individual address elements
• Formatting to fit global postal service standards
• Enrichment (e.g., geocoding and demographic data)

Get started with data verification

The success of your brand—during the peak season and beyond—depends on your ability to get the basics right. And making sure your customer contact data is cleansed, verified, and relevant is about as basic as it gets. The key takeaway here: Data doesn’t get that way on its own, and there are tools that can help you meet customer expectations year-round.

Ready to get started? Check out our data verification demo now.