What is geocoding, and how can retailers, marketers and third-party logistics providers benefit from it?

Location-based services are not new. Customer experience can be enhanced with geolocational offers targeting audiences based on their location, and the nearest outlet or distribution point to them. 

That’s one reason retailers should take a closer look at ‘geocoding’ to help give them the edge in logistics and delivery – for standout customer service, as well as analytics for improved sales and marketing performance.

With the logistics sector often viewed as a laggard in digital transformation, and a weak pillar of the digital economy, geocoding could make a difference.

Shipsy offers an AI-powered platform and mobility suite that seamlessly connects cross-border and local logistics by automating operations and ensuring intelligent third-part logistics (3PL) management, with complete visibility of first, middle and last-mile operations, unlocking operational efficiency and leveraging real-time analytics for informed decisions.

For instance, a leading logistics provider in Saudi Arabia deployed this global trade and logistics management platform to address challenges like growing customer complaints, traditional customs clearance processes, poor visibility of financial operations, inability to scale and more.

As a result, the 3PL provider developed critical capabilities to optimize its logistics operations, gaining better understanding of how to leverage automation to improve customs clearance processes, access to tips that help reduce cash reconciliation time by 44%, knowhow to optimize international country pick-up and enhance hub operations, and digitization to increase customer experience by 24%.

DigiconAsia finds out from Soham Chokshi, CEO and Co-Founder, Shipsy what geocoding is all about, and how it can transform the logistics industry.

Soham Chokshi, CEO and Co-Founder, Shipsy

What is ‘geocoding’ and what are its benefits in logistics?

Soham Chokshi: Geocoding is a process of converting physical or handwritten addresses into system/computer-readable information in the form of geographical coordinates. These coordinates (latitude and longitude) are useful in processing geographic information and or locating precise locations on the map and the ground by delivery executives.

Geocoding improves location accuracy as coordinates can be used to add markers on the map, which helps riders navigate a location with ease. The map shows all locations that have been geocoded.  A consolidated presentation of such geocoded addresses on a map in an area/neighborhood helps delivery managers to optimize territory planning and create highly productive routes.

Geocoding reduces ‘Return To Origin’ (RTO) instances arising from delivery failures due to poor address quality or a rider’s inability to find a location. It helps lower logistics costs and improves customer experience.

How has geocoding impacted cost and customer experience during the festive shopping season?

Soham Chokshi: The biggest challenge for e-commerce or logistics service providers during the festive season is cost-efficiently scaling elastic demand and keeping up with the evolving delivery SLAs.

As mentioned above, advanced geocoding engines enable logistics-powered businesses to lower RTO instances triggered by the driver’s inability to find an accurate location due to poor address quality. It helps save time, effort, cost, and fuel on logistics operations and ensures great customer experiences due to timely deliveries.

What is geocoding’s relation to business analytics?

Soham Chokshi: Multiple geocoded addresses in a small region are critical data points. They can have different uses for distinct businesses. For instance, for a 3PL company, it may help with territory optimization and delivery planning. At the same time, other businesses can use this data to predict PIN CODE or area code-based demand and tailor delivery strategies accordingly.

Please elaborate on the role of geocoding in ESG.

Soham Chokshi: Geocoding plays a vital role in increasing location accuracy and hence, the first-attempt delivery success rate. It ultimately translates to lesser miles traveled, lower fuel consumption, and results in reducing the carbon footprint of logistics operations while improving rider and customer experience.