Addressing Online Data Quality As an International Issue
It's astounding how many people tell me that while they are not involved in international business, they are interested in pursuing that possibility. It's even more amazing how many of those same people tell me that their organizations have a definitive Internet presence.
As a result of worldwide access to the Internet, online merchants can expect inquiries and sales from around the globe. While U.S. consumers currently make up the majority of online shoppers, a significant portion of online purchases will soon come from Europe and Asia. Thus, any company on the Internet is conducting business on an international scale. It's the nature of the beast. The question is will you let the beast control you or will you take the necessary steps to control it?
Data Quality and International Addressing
All businesses must pay close attention to data quality. Failure to employ effective data quality practices will dramatically erode your bottom line. It will affect your profitability, image, credibility and customer retention and satisfaction.
Not only is data quality a problem for organizations dealing exclusively with domestic data, but also the introduction of international data dramatically compounds the problem. First and foremost, a business must be concerned with name and address data.
Having accurate, properly formatted international name and address data is critical because this information is the building blocks upon which your operation depends. Demographic data, geographic data and the like are of no value if the base record, consisting of name and address data, is incorrect.
For any business doing traditional direct marketing on an international level, it is imperative to be equipped to properly handle international addresses. The style and format of international addresses, as well as the levels of postal data available, vary widely among countries.
There are 33 countries whose postal databases contain street-level data similar to what we are accustomed to in the United States. An additional 39 countries have a post code structure -- what the United States calls ZIP codes -- but no street-level data. The remaining 189 member nations of the Universal Postal Union have no street-level data or post code structure but do have some formatting requirements.
To ensure data quality, businesses must look beyond name and address. And any company on the Internet is, by definition, an international business.
So how do you handle the international address data that come to your Web site? Do you disregard those orders, as some companies do, out of fear that goods cannot be delivered accurately to these destinations?
Internet and bricks-and-mortar retailers that fail to address data quality issues will be in jeopardy. The employment of data quality tools can easily mean the difference between profit and loss and between success and failure. Those that implement real-time, global data quality applications, rather than depending on batch processing to handle all of their problems, will have a leg up on competitors.
The batch process, no matter how effective the tools, can never replace the inherent benefits of real-time customer interaction via the Internet or call center. In addition, a batch process can indicate only that deliberately fudged addresses -- such as one for Mr. Mickey Mouse, c/o Disneyland, Anaheim, CA -- are noncorrectable. Real-time address validation will note that as an invalid entry, thereby eliminating the operational costs of having to deal with intentionally erroneous data.
Data Quality and Domestic Addressing
Here's what we know on a domestic level: Many of the companies doing business on the Internet do not use any data quality or data cleansing applications. As a result, 8 percent to 10 percent of all items shipped as a result of online orders are incorrectly shipped. Those percentages are staggering. Add international to the mix, and the numbers significantly increase.
There are also some revealing statistics about retail on the Internet. In 1999, online shopping increased 120 percent. There were 152 million online consumer transactions, and the average order was $136, resulting in online retail transactions of more than $33 billion. Fifty percent of shoppers were first-time site visitors. If they had a bad experience, 66 percent of them shopped online less frequently, and 72 percent spent smaller amounts on their subsequent Internet purchases. And a full 65 percent of all Web shopping carts were abandoned due to problems at checkout.
To give you an idea of the magnitude of the problem, try these computations: Yahoo has 37.6 million unique customers; eBay has 30 million, and Amazon.com has 13.3 million. We know from historical data that between 5 percent and 10 percent of all customer files contain poor data. International files are, of course, much worse. Given the above numbers for these international Web destinations, you do the math!
So what does all this mean? You need to pay attention to data quality across your organization's enterprise. It means you're in the international game if your company is on the Internet. You must use tools that will allow you to do real-time processing as well as batch processing on a global scale. The tools, in one form or another, are available. If you're going to get your piece of the international pie and not choke on it, international data quality tools are paramount.