Customer Success Story

Senkels reduces invalid shipping addresses by 50%, saving time and money

E-commerce stores have become increasingly important in recent years. The average online order value has risen sharply recently, especially after the outbreak of the corona virus. However, such a rapid increase in orders also entails risks.

As sales increase, so do returns and return rates. Particularly annoying is the faulty fulfillment. In Germany alone, 7% of initial deliveries fail, resulting in average costs of around €15 per order. Calculated over a whole year, the average costs per retailer are as high as EUR 145 thousand.

The problem often lies in inaccurate or incomplete address data. These can be caused, among other things, by customer input errors in the checkout process. 41% of deliveries with inaccurate address data are delayed, 39% fail completely.a



Address verification already plays an important role in the USA, where 83% of retailers already have their customers' addresses verified. Germany fares much worse here. Here, only 58% of retailers have their addresses verified.

Incorrect deliveries affect the company's reputation in particular, as customers receive their orders late or not at all. Although they themselves are usually responsible for delivery problems due to incorrect and incomplete address data, who would blame themselves first? In most cases, the customer is left with a certain level of dissatisfaction that may make the next purchase less likely. After a few months, hardly any customer will remember their own mistake, but rather the mess that went along with the order.

If another mistake happens, the goodwill is usually gone - more than one in ten customers is willing to leave a bad review about a retailer and another 9% would complain publicly, e.g. on social media.

A bad rating due to undeliverable deliveries would be fatal because almost 93% of customers read through the ratings of other customers before buying. Only three negative reviews drive away about 60% of potential customers.

Depending on the size of the order, domestic delivery is made in parcels by the shipping service provider DPD. The shipment status can be viewed at any time and the address can be changed manually during the delivery process. Nevertheless, according to studies, an average of 5% of orders contain incorrect address data. This results in undeliverable shipments for Senkels and subsequently a costly return shipment of €6 on average. Added to this, of course, are the costs of communicating with the customer to correct the address and arrange for re-shipment.

"The return shipping costs me 6€ every time, which is relatively high for a goods value of 14€-17€ per pair of sinkers. In addition, the customer and I end up not knowing what happened to the delivery until it comes back to me. A big minus point in the customer experience!"

Abroad, delivery is even more complicated for Senkels. The products are sent in envelopes via the post office. In this case, it is no longer possible to manually change the address during the delivery process. In addition, neither Senkels nor the customers receive information about the shipment status.

Should an undeliverable delivery occur at Senkels due to an incorrect address, the return shipment can take up to two weeks. On the one hand, this means an unnecessary additional expenditure of time for the company. For another, customers do not receive their orders in a timely manner, which could mean that they no longer order from Senkels.

Daniel Lichtenegger realized that without address validation, the scaling of his e-commerce business would be severely hampered. Senkels' rate of orders with incorrect addresses varies between 4% and 7%, depending on the shipping country. So every single one of these orders may not be delivered. However, undeliverable shipments also incur costs. These costs depend, among other things, on the products that are shipped or the contract with the respective shipping service provider.

"I wanted an automated solution to reduce the incorrect address entries. The tool that was first proposed to me, I immediately deleted. It met my expectations, just not."

To solve this problem, Daniel tried several approaches. First, he tried to correct the addresses by writing to the customers via e-mail. Customer-oriented - but very time-consuming. So Daniel looked around for an automated way and tried some address validation apps. However, they did not meet his expectations.

After various app tests, Daniel decided on Address Validation iO. The app was up and running immediately and has been reliably validating his customers' addresses ever since. After just under half a year, Senkels already recorded 50% fewer undeliverable deliveries due to incorrect addresses.