How geocoding and reverse geocoding empower online and in-store channels
Consumers naturally have different buying habits and reasons for purchasing a product or service, especially when taking their demographics and geographies into consideration. In short, different people in different countries require content that speaks directly to their disparate needs. While seemingly simple in theory, it can be challenging to accomplish. That said, when done correctly, retailers can obtain the most optimal conversion rates.
But first, it starts with accurate data: The saying “garbage in, garbage out” applies to retailers when leveraging any data, let alone location data. However, once the foundation is set, there are endless possibilities for what retailers can accomplish in the store and online.
Even further, leveraging geocoding and reverse geocoding — or taking an address given as latitude and longitude and converting it into real verified addresses and other associated properties of that address — is desirable and necessary to make real-time practical business decisions.
Dive into the details and find out how to empower your retail brick-and-mortar and online channels, by opening growth opportunities through geocoding and reverse geocoding.
What is Geocoding and
Why Do Retailers Need it?
It was estimated that pre-pandemic, a “mere” 23% of organizations were using geospatial and location intelligence capabilities within their business intelligence and analytic platforms, according to Gartner Research. At that time, Gartner’s Research Director Thomas Oestreich urged analytic and information leaders to put the "where" question to all new BI and analytic projects.
Fast-forward to today and location intelligence is table stakes. Why? The global pandemic propelled the use of geospatial data analytics for public-health-related services (i.e. tracking the COVID-19 spread), later gaining traction across more industries including retail, supply chain & logistics, among others. According to the numbers, global location intelligence and geospatial will continue to increase:
The global location intelligence market size accounted for $15.9 billion in 2022 and is projected to achieve a market size of $66.5 billion by 2032 growing at a CAGR of 15.6% from 2023 to 2032
By vertical, the retail and consumer goods segment is expected to expand at the biggest CAGR of 16.2% from 2023 to 2032
Geospatial data analytics enables businesses to gather, manipulate, and visualize different data types from GPS, location sensors, drones, satellite imagery, and smartphones, according to Fortune Business Insights. It helps organizations to study large volumes of demographic, topographic, and environmental datasets in order to make more informed business decisions. What’s more, constantly emerging technologies also help to grow these advanced analytics like the Internet of Things, artificial intelligence, machine learning, and 5G for example.
McKinsey defines geospatial analytics as geographic information systems that include the hardware, software, data, management, and analysis of geographically referenced data. The analyses based on GIS data are referred to as geospatial analytics.
Geocoding falls under the location data type and promotes location data accuracy by converting text-based street addresses or other location descriptors into precise latitudinal and longitudinal coordinates. Reverse geocoding involves the opposite conversion, also pushing the location data accuracy envelope.
However, being able to standardize, correct, and optimize your data before geocoding is critical. Simply put, you need an accurate address to get an accurate geocode.
Addressing the Roadblocks to Getting Location Data Right
Before leveraging geocoding and reverse geocoding to the fullest potential, it’s important to address some of the challenges retailers may have in getting it right.
First, since there are no standards to uphold the integrity of location data, certainty isn’t guaranteed. This leaves retailers grappling with issues like:
Unstandardized addresses that contain multiple address fields, unstructured big data, and/or different abbreviations, diacritics, and language sets.
For example, many rural areas are assigned a PO Box by the United States Postal Service (USPS) and only deliver to those PO Boxes to help streamline operations. However, there is a physical address associated with that PO Box – and most likely carriers like UPS, FedEx, etc., will deliver there. As a retailer, you need to know if you can:
Unverified addresses. Retailers need to determine whether an address actually exists, and/or whether deliveries can be accepted there, but don’t always have a way to do so.
1. Verify your customers' actual addresses and,
2. Deliver via carrier to that address.
The global geospatial analytics market size was valued at $69.96 billion in 2022 and is projected to grow from $79.06 billion in 2023 to $206.93 billion by 2030, exhibiting a CAGR of 14.7%
Dynamic Duo
Geocoding glitches. Googling frequently yields latitudinal and longitudinal coordinates for street addresses that don’t always exist.
Next, inaccurate location data can cost retailers a lot:
Gartner estimates that poor data quality costs organizations an average of $12.9 million each year.
Couriers like UPS and FedEx now require shippers to shell out nearly $29 for every address correction — an expense that can quickly add up.
Orders that don’t reach the right customer or are claimed by the wrong recipient can add up to big costs for e-commerce businesses; the cost of the lost product and the initial shipping cost, plus the price of the replacement and the expense of shipping it.
However, for retailers that have the right location data foundation and solutions partner to accomplish successful geocoding and reverse geocoding, there are many ways they can reap the benefits — that of course trickle over to consumers.
“Data quality is directly linked to the quality of decision making. Good quality data provides better leads, a better understanding of customers, and better customer relationships. Data quality is a competitive advantage that D&A leaders need to improve upon continuously.”
Many companies have already adopted geospatial analytics:
Enable Websites to Select Language & Buyer Motivation
For retailers that are looking to grow their online catalogs or expand their brick-and-mortar presence, location data can be used to:
Dealer/Store Locator
Fix Ambiguous Addresses
Fraud Prevention
Reverse Geocoding
From Data to Action: Making the Case for Geocoding and Reverse Geocoding
Symmetry Determines Proper Tax Withholding Using Rooftop Geocoding
Bringing it All
With Melissa
SPECIAL REPORT
Location Data
Melissa’s philosophy is simple: Bad data is bad business. Melissa has 38+ years of address expertise that started with ZIP+4 and turned into so much more. Melissa is now a global leader in data quality, address verification, and identity resolution, helping businesses worldwide harness accurate data for a more compelling customer view. Melissa’s industry-leading solutions have processed over 1 trillion address, email, name, and phone records, and have been recognized in the 2024 G2 Grid Report as leaders in Data Quality and Address Verification.
Melissa’s commitment to providing the best Data Quality & Address Verification Software is reflected in the G2 2024 Grid Report. We scored:
More than 10,000 clients worldwide in key industries like insurance, finance, healthcare, retail, education, and government, rely on Melissa for full spectrum data quality and identity verification software, including data profiling, cleansing, matching, and enhancement services, to gain critical insight and drive meaningful customer relationships.
For more information or free product trials, visit www.Melissa.com or call 1-800-MELISSA (635-4772).
Choose a solutions partner that works with postal authorities (i.e., USPS) to consistently acquire the most accurate address data. Other unique company benefits should include:
"For Symmetry, there are many advantages to the Data Quality Suite and GeoPoints. First and foremost, we’ve experienced significant improvement in rooftop accuracy. Because it is housed on our servers, reliability has improved and latency issues have been virtually eliminated. More and better accuracy codes, improved support — overall, this gives us the ability to offer our customers a significantly better product.”
How much is bad data costing you?
While e-commerce retail sales are still booming, bad shipping data can have an impact on your bottom line – but it is avoidable. Find out how much bad data is costing you, and what your annual savings could be.
Calculating the various payroll tax deductions based on location requires extreme accuracy. Software payroll tax solutions company Symmetry needed an address verification solution that would verify, correct, and standardize residence and business addresses to ensure address accuracy when determining the proper withholding tax settings.
Rooftop geocoding allows Symmetry to append latitude/longitude coordinates to the 11-digit level of the address or parcel. This higher level of accuracy provides a distinct set of coordinates for every valid address — giving Symmetry the actual, physical location of the address, right to the building or property’s rooftop.
Symmetry tapped Melissa for its GeoCoder Object with GeoPoints solution, as well as its Data Quality Suite of APIs. The geocoding solutions use spatial data incorporated from multiple data providers — a process called conflation — to deliver the most accurate geopoints available with more matches and fewer false positives.
Geocoding can also be used for disaster relief mapping and emergency location purposes. In this case, you may know a location but can’t distinguish or identify the address. Maybe after a hurricane, where damage spread across undefined property boundaries, for example. First responders can use reverse geocoding to find the address of the location. They walk the damage with handheld devices and use the geolocation data to determine where the houses used to stand.
It can be useful in cases of aerial identification. In rural locations, for example, a wild bear could be on the loose warranting a cautionary push, or fire evacuation warnings could be needed. Energy companies need to know the nearest residents to warn locals about construction or emergencies, etc.
Retailers can leverage geocoding for last-mile, white glove delivery service. For example, delivery companies like Amazon Today, Walmart GoLocal, etc., might have multiple pickup locations but can push more use to consumers by offering a discount for them to pick up in-store versus free delivery. Geocoding can be combined for the nearest location with the street routing API so retailers get the closest location that is the most accessible via driving. By making it attractive to go that extra effort and pick up, the extra burden is taken off of fulfillment infrastructure.
There are many use cases for geocoding and reverse geocoding that are beneficial across industries:
Use a start location to create a mailing list for targeted marketing, where a store’s geolocation could be used to obtain a specified set number of residential homes. It makes sense to target only those within a specific radius (the nearest) because they’re most likely to take a short trip for a promotion. Looking at it a different way, it can also be very costly in either direct mail/phone or email campaigns to target addresses that are way outside a reasonable distance (it’s not great for a loyal customer experience and is not as cost-effective).
Use residential homes' known coordinates to determine a retailer's physical location and point them to the closest Dunkin Donuts for example, usually configured to a finite list or number of locations, and limited distance, but it helps determine the easiest path for a seamless customer experience. It’s important to always keep distance in mind (in this case as a radius from that starting point).
Reverse geocoding not only benefits retailers but shows promise for food or quick-service restaurants (QSR), online shopping, and food delivery services. They can also take advantage of geocoding to confirm the address of their products or services, to ensure that packages and orders are delivered to the right location.
Think geofencing as an example which offers a field around a physical area that is triggered when the device enters — businesses can send SMS or PPC ads to the device to generate foot traffic through coupons, sales, or even combo meal deals.
Reverse geocoding can take a GPS location and translate it back to benefits. Consider this scenario: A customer is outside at a convenience store and he or she is looking for DoorDash. By converting the GPS of the mobile device, a driver can determine the closest physical address to where they are located. The driver can then route through the streets to get to the location where the customer is so items become deliverable.
Parameters can also be set up, for instance, half a mile from physical stores so that when customers are signed in, they can be notified with an ad, for example, to push them to purchase something they normally might not while en route. Facebook ads, SMS, etc., can create more foot traffic by bouncing customers off their normal route as they drive by stores.
"Location data enables brands and retailers to bridge online and offline words, herewith this data is the most valuable information in every business process.”
Retailers with a single customer view based on clean, deduplicated location data can quickly identify a purchase that doesn’t align with a consumer's previous buying habits. The data can immediately be flagged without the need to invest in robust and expensive identity verification, while also eliminating the need for manual reviews.
For example, the data would give retailers the ability to quickly identify if the IP address or GPS of the ordering device doesn’t match the known location of the cardholder — these can be flagged as potential fraud.
Or the transaction might originate in a disallowed or suspect country (i.e. if a country is on a sanctions list that prevents items from being shipped) — the retailer can automatically deny transactions for certain locations, for instance.
Both of these use cases help identify potential fraud, resulting in reduced chargebacks.*
Chargeback fees cost between $20 and $100, depending on the merchant's agreement with their acquirer. When you add these fees up with all the other hidden and indirect costs, companies often lose more than twice the transaction amount for each chargeback.
Retailers that use geocoding or reverse geocoding have the opportunity to fix ambiguous addresses, which improves fulfillment and keeps customers coming back time and time again. Retailers should leverage a partner that utilizes a Coding Accuracy Support System (CASS)-certified address verification solution for US addresses. That’s because CASS-certified providers need to pass regular tests with a 98.5 match/verification rate.
The CASS-certification program was developed by the United States Postal System to test the accuracy of address-matching software and improve the accuracy of postal coding, such as ZIP+4 Code® and five-digit ZIP Code coding.
For global address verification, choose a provider that is certified, or partners with, the postal authority in which the retailer does business. For example, in Canada, Canada Post SERP; in Germany, Deutsche Post; and in the United Kingdom, Royal Mail.
Retailers can authenticate their customers’ email addresses to increase deliverability, avoid high bounce rates, and protect their sender reputation. Global email verification pings each email to ensure it is active and can receive mail.
Location data and geocoding can also benefit retailers as dealer-store locators. When a consumer types in an address, the retailer can then push them to the most convenient pickup location or store location (essentially through latitude/longitude coordinates). Then, build on directions or routing based on the easiest drive time between those two location points.
For example, the closest location might be an Amazon locker at a convenient grocery store location. Consumers want convenience and ease of use with any new technology and leveraging geocoding presents them with an ideal customer experience to grow brand loyalty. Consider these numbers:
of shoppers say convenience is extremely or very important to them
Based on that geolocation or mapping data, retailers can decide to target an area around that centroid (i.e., either carrier route(s) or a 15-mile radius for instance) and use that data to build a marketing list. This is beneficial because the build can include a postal mailing list or even an email list for more effective marketing efforts.
Grow Retail Sales & Store Footprint with Location Analytics
Position to attract new customers
Retailers should first identify their target market, for example:
Active men between 30-55
Professional
High income (annual household income over 70K)
Workout 3x per week
Retailers should first identify their target market. Then, retailers can identify where online sales are strong (the sweet spot) and include those who have the optimal drive time (10 to 15 minute drive radius).
What’s more, these factors help identify the best potential sites for expansion. Location data analytics can help retailers identify where their best or most loyal customers are (or are clustered) for site expansion analysis.
Taking it one step further, by adding geotargeting/geofencing, when customers are near a physical store, retailers can then trigger an ad or promotion that appears on their mobile devices — generating even more foot traffic.
25% of Gen Z consumers prefer having a store within walking distance
of business leaders cite improved customer retention as a benefit of personalization efforts
Leveraging geocoding enables websites to select a language by detecting the customers’ location and then serving them content that matches up with their language or motivation for buying (which can also vary per region).
For example, North America is a multilingual region and each feature in the reference data is represented by a record for each language spoken, such as English, French, and Spanish. This means that you can search for the same address or place in all languages represented in the data using a single locator.
Additionally, while geocoding gives the location, coupling that with other kinds of targeting gives even deeper insight into buyer motivation. Adding demographic and even psychographic data helps with personalization and builds out more complete buyer profiles/insights. Then, retailers can tailor content even further for specific needs.
By using the geocodes and overlaying census data, i.e., if you have a commuter community, you can make sure your footprint is within walking distance. Having location data allows retailers to include additional data layers in their customer base.
What’s more, retailers working on conversion rate optimization (CRO) can split up campaigns for each country and have variations of that same local content. This A/B testing enables more hyper-localized content and the ability to serve actual relevant triggers and good content that works for that specific region. After all, there’s no point in running a great ad pushing traffic to an audience with content that doesn’t convert because it’s not in the right language, or at the right place and time.
— Jon Bohnert
Executive VP, Symmetry
Read the Full Case Study
— Melody Chien
Senior Director Analyst at Gartner
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Did You Know?
— Carsten Szamaitat
CEO
The Location Based Marketing Association
Melissa and Esri recently partnered to optimize address data, but what does this mean for retailers?
Proprietary address engine
Advanced parsing
Fuzzy matching tools
Nearly four decades of in-house expertise
Verified, correct, and enriched customer addresses
Melissa + Esri ArcGIS = A single customer view based on clean, deduplicated data — essential to decision-making excellence in the retail industry.
DID YOU KNOW?
UPS used geospatial analytics to direct its drivers to more efficient routes that favored right turns over left. Since many states in the US allow right turns on red, this change reduced idling time and cut fuel costs by $3 million annually.
Starbucks now offers mobile applications that help consumers locate the nearest store based on their phone’s GPS data.
ComfortDelGro, Singapore’s largest taxi company, has an app that identifies the location of people who want rides using data from their smartphones.
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TOOLBELT BONUS:
E-COMMERCE ROI CALCULATOR
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USPS® CASS™ & Canada Post SERP Certified Address Software
Batch Processing, API integration & Global Service Bureau
Highly Scalable + Integrations for Leading GIS, CRM & Ecommerce Apps
SOC 2 Certified, GDPR & HIPAA Compliant for Data Security & Privacy
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Meets Requirements
Quality of Support
Ease of Setup
Ease of Admin
PROBLEM
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RESULT
Case Study:
of consumers say they expect personalization and a brand will lose their loyalty without it
of consumers say they will become repeat buyers after a personalized experience
62%
62%
56%
6 Ways
[ jee-oh-koh-ding ]
geocoding
USE CASE #5
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Location Data Benefits Retailers
ART NOTE: [Can pick up and play video in the background or side of the “Why Melissa”: https://vimeo.com/806083555]
And/or can use image: rooftop-geocoding.webp
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of shoppers rank convenience as their first or second decision-making factor
shoppers say store location is the most important factor for convenience, with an additional half saying it plays a role
of all consumers consider the most convenient store location to be the one that is closest to home, followed by one along a route they travel regularly (54%)
* DID YOU KNOW?
Did You Know?
Minimize cannibalization between channels
Generate the highest return on capital investment in new stores
Establish the brand in marketing with its target customers before competitors do
Leverage their existing customer base
G2 2024 Grid Report
Together
13% prefer having a store along a public transportation route
This is because Gen Z shoppers are 20% more likely to live in urban settings and 45% less likely to own a vehicle