“The Triple Threat: How Erroneous Product Information Impacts Profitability, Customer Experience, and Sustainability in eCommerce”

As I engage customers and various selling partners, I am often asked: “What is the business case for implementing a market leading Product Information Management (PIM) system as part of our digital transformation?”? “What is the ROI?”

Let’s break that down into three categories that surely resonate with today's successful enterprise - Profitability, Customer Satisfaction, and Sustainability

Profitability

Decreased Sales: Listing erroneous product information on eCommerce sites can have a significant impact on retailers' profitability. Inaccurate information, such as incorrect pricing, wrong product descriptions, or outdated inventory levels, can lead to decreased sales. Customers rely on accurate information when making purchasing decisions, and if they encounter discrepancies, they may be deterred from buying the product or lose trust in the retailer's brand

Negative Customer Experience: A major consequence of listing erroneous product information is the negative impact on customer experience. Customers who receive products that do not match the listed description or specifications may request returns or refunds, leading to additional costs for the retailer. Moreover, dissatisfied customers are less likely to repeat purchases and may leave negative reviews or share their negative experiences with others, further damaging the retailer's reputation and potential future sales.

Increased Customer Service Costs: Retailers may experience an increase in customer service costs as a result of inaccurate product information. This can include handling customer inquiries or complaints regarding incorrect information, managing product returns and exchanges, and providing compensations or refunds. These additional costs can decrease profitability and divert resources that could otherwise be invested in growth or improving other areas of the business.

Potential Legal Consequences: In some cases, listing erroneous product information can lead to legal consequences. For example, if a retailer misrepresents a product's features or fails to disclose important information about it, they may face legal action from customers or regulatory bodies. Legal battles can be costly and damaging to a retailer's profitability, reputation, and overall business operations. Starting taking a closer look at the Digital Product Passport evolution in Europe and Prop 65 in California.

Negative SEO and Search Ranking: Search engine optimization (SEO) is crucial for retailers to be visible and attract visitors to their eCommerce sites. However, inaccurate product information can negatively impact SEO efforts. Search engines value accurate, informative, and relevant content. If a retailer consistently provides erroneous information, it may harm their search ranking, making it more difficult for potential customers to find their products. This can decrease organic traffic and potential sales, impacting overall profitability.

Increased Product Returns and Restocking Costs: Incorrect product information can lead to a higher rate of product returns, adding costs for retailers. Inaccurate descriptions, sizing guides, or images may result in customers receiving products that do not meet their expectations. Returning, restocking, or reselling these products incurs additional expenses, negatively affecting profitability.

Loss of Brand Trust and Customer Loyalty: Listing erroneous product information erodes customer trust and damages brand reputation. When customers encounter inaccuracies and inconsistencies, they may question the retailer's reliability. This loss of trust can not only lead to reduced sales but also result in a decline in customer loyalty as they may choose competitors who consistently provide accurate product information. Building brand loyalty is essential for long-term profitability, and inaccurate product listings can undermine this effort.

To mitigate these negative impacts, retailers should prioritize data accuracy by implementing robust product information management systems that include digital shelf analytics to validate data on third party sites, conduct regular quality checks, and invest in employee training. By focusing on accurate and reliable information, retailers can enhance and ultimately increase profitability.

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Customer Experience

Dissatisfaction and Frustration: When customers receive products that do not match the listed information, it can lead to dissatisfaction and frustration. They may feel misled or deceived, as they were expecting a specific product based on the information provided. This can result in a negative ownership experience and damage the relationship between the customer and the retailer.

Reduced Trust: Erroneous product information can erode trust between customers and retailers. If customers consistently receive products that do not match the listed description or specifications, they may question the reliability and credibility of the retailer. This can lead to hesitancy in future purchases and a loss of trust in online shopping as a whole

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Inconvenience: Incorrect product information can cause significant inconvenience for customers. They may need to go through the process of returning or exchanging the product, potentially experiencing delays and additional costs. This can disrupt their plans and require extra time and effort to rectify the situation. As a result, the ownership experience becomes more burdensome and less enjoyable.

Unmet Expectations: When customers rely on the information provided by the retailer to make a purchase, they have certain expectations about the product. If those expectations are not met due to erroneous information, it diminishes their overall ownership experience. This can range from minor inconveniences to significant disappointments, depending on the extent of the inaccuracies.

Negative Word-of-Mouth and Reviews: Customers who have a poor ownership experience due to erroneous product information are more likely to share their negative experiences with others. This can result in negative word-of-mouth for the retailer, impacting their reputation and potential future sales. Additionally, customers may leave negative reviews online, further influencing the perception of the retailer and potentially deterring other customers from making purchases.

Ensuring accurate product information is crucial for providing a positive and satisfactory ownership experience. Retailers should strive to deliver on their promises, maintain customer trust, and promptly address any inaccuracies or discrepancies that arise.

Let’s not ignore Sustainability!

It’s hard to review your favorite brands and not see their position on sustainability.? The pressure is multi-directional:? government regulations, conscious consumers, peers, employees and mostly just plain and simple good business to save our planet!

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Increased Returns and Reverse Logistics: Inaccurate product information can lead to an increase in returns and reverse logistics. When customers receive products that do not match the listed description or specifications, they may need to return them. This results in additional transportation and packaging waste, as well as additional energy consumption associated with the return process, impacting the environment. Sometimes its simply easier and cheaper to add to the landfills.

Excessive Packaging Waste: If erroneous product information leads to customers receiving incorrect products, retailers may need to ship replacement items, resulting in additional packaging waste. The original item may also need to be returned, resulting in additional packaging waste generation. This can contribute to the overall burden of waste disposal and the depletion of natural resources used in packaging production.

Increased Carbon Footprint: Inaccurate product information can contribute to an increased carbon footprint in several ways. Firstly, if customers receive products that do not meet their expectations, they may return them, resulting in additional transportation emissions. Secondly, retailers may need to expedite shipping for correct products in order to meet customer expectations, which leads to faster shipping methods that often have a higher carbon footprint. Lastly, if returns cannot be resold and end up as unsold inventory, they may need to be disposed of or discounted, resulting in unnecessary waste and emissions.

Extended Product Life Cycle: When customers receive products that do not match the listed information, they may choose to keep them even if they are not exactly what they desired. This can extend the product's life cycle, leading to a delay in potential upgrades and replacements. Consequently, older products may continue to consume energy and resources, reducing the overall efficiency of the consumer goods market.

It's important for retailers to prioritize and ensure accurate product information to minimize these environmental impacts. By reducing inaccuracies, retailers can help reduce waste generation, optimize transportation processes, and contribute to a more sustainable approach to commerce.

In conclusion, the significance of accurate product information in eCommerce cannot be overstated. Erroneous details not only compromise profitability by increasing return rates and customer support costs, but also dampen customer experience and trust, potentially leading to a decline in sales and customer loyalty. Moreover, these inaccuracies pose a threat to sustainability by causing unnecessary returns and wastage. For businesses looking to thrive in the hyper-competitive online marketplace, proactive steps to ensure accuracy in product descriptions are vital.

Businesses that prioritize these actions will see better customer engagement, improved profitability, and a boost in their sustainability efforts, proving that honesty is indeed the best policy in eCommerce.

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