With no end to the Middle East conflict in sight, Barley Laing, UK Managing Director at Melissa, warns that falling inflation may be a false flag and explores how businesses can protect profitability.
The continued conflict and uncertainty in the Middle East, alongside the ongoing disruption to shipping through the Strait of Hormuz, is having a major impact on energy prices.
As a result, we’re seeing soaring supply chain and raw material costs that are putting retail margins under intense strain, while consumers are also becoming more cautious with their spending.
This is despite recent figures from the Office for National Statistics (ONS) that reveal inflation fell to 2.8% in the year to April, down from 3.3% in the year to March. That decline was largely driven by government energy support packages and lower wholesale energy costs before the conflict. However, experts now predict that in the current economic climate inflation could rise to around four per cent by the end of the year.
Delivering customer data quality is key
I believe one of the most important actions retailers can take to continue delivering strong growth and profitability — while mitigating the damage caused by inflation — is ensuring they have access to accurate customer contact data. Not only can this help prevent rising fulfilment and delivery costs by supporting fast, accurate first-time deliveries, but it can also generate valuable insight for more personalised marketing activity, better upselling opportunities, and overall provide a standout customer experience.
Unfortunately, 91% of organisations still face common data quality problems, which is hardly surprising considering customer contact data degrades by around 25% every year without regular intervention. Also, 20% of addresses entered online contain errors such as spelling mistakes, incorrect house numbers, or wrong postcodes, primarily caused by people mistyping their details on small mobile keyboards.
This results in inaccurately targeted communications and failed deliveries, which wastes valuable budgets and creates a poor customer experience that ultimately impacts on retention. In addition, any insights generated from inaccurate data will be flawed and, in the age of AI, could even contribute to AI hallucinations.
To avoid these issues, it is important that retailers strengthen their data quality processes to ensure customer contact data is captured accurately at the onboarding stage, and they regularly check, clean and enhance held customer data. Doing this can have a positive impact on their bottom line and help them to mitigate the inflationary pressures they are currently facing.
Consider address lookup or autocomplete
A strong starting point is implementing an address autocomplete or lookup service that provides accurate customer address data in real time during onboarding, by delivering a properly formatted and verified address as the user begins entering their details. These services can also reduce the number of keystrokes required to enter an address by as much as 81 per cent, helping to speed up onboarding and lessenthe likelihood of abandoned purchases.
Dedupe customer databases
I’ve seen retailers face significant challenges with duplicate data, with many experiencing duplication rates of between 10 and 30% across customer databases. This often happens when errors occur during data collection at different touchpoints, when departments merge datasets, or following a business acquisition when customer records are combined. Duplicate data is costly both financially and reputationally, particularly when duplicate printed communications are generated and distributed.
Obtaining an advanced fuzzy matching tool is the best way to eliminate duplicate data. Such a service can merge and purge the most complex records and create a single user record, which delivers an optimised single customer view (SCV), enabling more accurate insights and better targeted campaigns.
Undertake data suppression
I also consider data suppression and cleansing to be vital parts of the wider data quality process because they help identify customers who have moved or are no longer at the address on file. A key element of this requires having access to the National Change of Address (NCOA) database that’s available in the UK, US, and some other countries, which highlights customers who have moved and provides their new address information.
Beyond removing incorrect addresses, these services can also include deceased flagging to help retailers avoid sending communications to individuals who have passed away. This not only prevents distress for families and friends of the deceased, but also protects the retailer’s reputation while reducing wasted expenditure.
By adopting stronger suppression strategies retailers can generate more actionable insight, combat fraud, maintain trust and reduce costs during these inflationary times.
In summary
I can’t see the energy-driven inflation linked to the conflict in the Middle East easing anytime soon, or a quick recovery in consumer confidence. To drive sales and remain competitive today, retailers must focus on acquiring clean customer data at the onboarding stage and on maintaining high-quality customer databases through ongoing cleaning processes. Only then will retailers be able to improve product delivery, enhance customer communications, and provide a truly standout customer experience which will help them to drive profitability in these challenging times.
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