Australia’s e-commerce industry continues to cement itself as a core buying channel for Australian consumers, with online shopping growing by 8.9% in 2022 to reach $47 billion in 2022. A third turned to online shopping over Christmas.

With the Christmas shopping season fast approaching amidst rising interest rates, controlling costs has emerged as the key consideration for retailers, while consumers are taking a more measured approach to spending, according to Deloitte’s 2023 Retail Holiday Report.

Retailers are beginning to send out packages at significant volumes, but late or lost packages can cause irreparable brand damage during times of emotional stress. At the same time, scams and fraudulent activity run rife in the holiday period as criminals target end-of-year shoppers looking for bargains amid the cost-of-living squeeze.

Address validation solutions are critical in helping retailers avoid customer disappointment and lost revenues through scams or incorrect deliveries and deliver the following benefits for businesses.

Avoid the negative impact of delayed deliveries on consumer satisfaction

Australia Post understands the impact of incorrect addresses on delivery times, and the direct impact it has on consumer satisfaction. The Delivery Experience Data and Insights Report reveals that 7% of parcels don’t have a valid delivery identifier. This has a downstream impact by delaying parcel deliveries by at least one day, with a direct Net Promoter Score (NPS) dip of 2 points.

Australia Post recommends that retailers consider an API integration for address validation and use address validation tools at their online store checkout pages.

Verifying addresses up-front reduces failed delivery rates by up to 70%. GBG works with retailers to reduce shopping cart abandonment rates and improve customer experience with data-driven address validation, which minimises human errors and ensures customers provide the correct (and valid) addresses at the point of checkout.

Prevent reputational damage

While retailers are facing potentially depressed revenues flowing from interest rate rises, implementing better address validation processes and technology avoids a negative shipping experience which can cause overheads from delays and irreparable damage to a retailer’s brand.

In a survey by Meteor Space, 84% of customers said they wouldn’t make a repeat purchase after just one poor delivery experience.

Another study found that 69 percent of respondents are much less or less likely to shop with a retailer in the future if an item they purchased is not delivered within two days of the date promised. Further, 16 percent of respondents will abandon shopping with a retailer altogether if they receive an incorrect delivery just one time, and 14 percent will do so if they receive a late delivery just once.

Provide a frictionless shopping experience

Alongside the e-commerce boom has been a rapid rise in expectations of e-commerce and retail businesses for highly intuitive and frictionless customer experiences. Customers are easily deterred by lengthy checkout or data entry processes, and business will quickly lose customer loyalty if parcels arrive late or, worse, not received at all. Our address validation solutions are designed to help businesses keep customers happy with seamless user experiences.

GBG’s State of Digital Identity 2023 report: Building Back Trust revealed that Australian consumers practice security-conscious switching. Almost four in five Australian consumers (82 percent) signed up to a new online account in the past year – and a big majority of them switched to new brands.

Despite shopping cart abandonment rates, Australian retailers rate themselves six out of 10 on average for providing a frictionless onboarding experience. However, providing a truly exceptional experience includes real-time address validation that allows customers to search and validate any address in the world as they type, to ensure the right address is captured accurately and quickly during the onboarding or checkout process.

Stop consumer scams and fraud

Eight of Australia’s top 10 most trusted brands come from the retail sector. This trust is a testament to retailers’ vital role in our society, serving as the primary source of food and goods, and influencing resources.

With more than 1.3 million people employed across the $411.5 billion retail sector, it is also a significant driver of Australia’s GDP.

According to Statistica, US$41 billion was lost globally to e-commerce fraud in 2022. Sadly, e-commerce fraud is not going away any time soon. In fact, it’s likely that online retailers will lose $48 billion to e-commerce fraud in 2023.

Along with intelligent address verification, e-commerce retailers should prioritise fraud prevention measures such as routine security audits, Hypertext Transfer Protocol Secure (HTTPS) and identify verification tools.

It’s important for the health of both the sector and nation to be extra vigilant in the lead up to the shopping season, preventing consumer scams and ensuring Christmas packages are being sent to the right place by utilising location intelligence solutions. 

Carol Chris is general manager of Australia & New Zealand, and Product at GBG Plc.