The festive season is soon to arrive and its flickers are all around already. The festive season starts from September itself and goes till New Year…that is a good period to enjoy at fullest in the festivals of different cultures as it includes Dussehra, Diwali, Christmas, and New Year as major festivals. Also, these months of celebration include the wedding season too that means more celebration, more joy, more shopping, more glitters.

The festivals always bring an increase in online and offline shopping of apparel, jewellery, electronics, grocery, automobiles, etc. There is always a sales surge during the festive season for that the sellers also bring new offers, deals, and discounts to increase the sales. As the Flipkart and Amazon announce the Big Billion Days and Great Indian Festival respectively to increase their sales, they also receive 80% of the purchase orders during the sale period itself.

So, Are you ready to handle the rush in purchase orders that you will soon receive in the coming time this year? Do you know that the increase in sales during the festive season also brings an increase in non-delivery rate of the packages as well? The situation of non-delivery of the packages can be due to many reasons but it leads to an increase in RTO percentage which simultaneously impacts a huge loss to the business.

As the increase in non-delivery of the products and their returns to the origin is a much bothering and least tolerant problem for the business. Frequent returns of package and shipment hit a lot on the business ROI (return on investment). The festive season surely brings a hike in sales and profit but if not handled carefully it leads to the increase in returns of the packages.

The sellers in this coming festive time need to get sharply ready to deal with the shipments and stock to decrease the situation of non-delivery of the package and hence, RTO percentage. Also, before preparing for the solution, we need to understand the problem and its impact first.

What is RTO? How RTO Affects The Business?

Non-delivery of the package to the customer often leads to its return to the seller’s warehouse i.e., Return to Origin (RTO). This very common issue faced by e-commerce logistics can have multiple reasons behind.

Let’s discuss some statistics and facts,

• According to Razorpay Thirdwatch, RTOs tend to increase up to 40% during the festive season of October, November, and December

• Approximately, 30% – 40% of the packages that are ordered online are returned back to the origin worldwide

• According to Barclaycard research, 30% of customers intentionally over-purchase and then return the undesired products

The non-delivery of the  packages leaves a huge impact on the sellers’ business as it includes many associated costs with the reverse shipment. The additional costs associated with the RTO are shipping costs, packaging costs, damage to the product during shipping, and costs that hang up when the product gets stuck in the transit.

Possible Reasons Behind Non-Delivery of the Package

Before finding any solution, there is a thorough need of understanding the origin of the problem. Why is it happening? What are the reasons behind? Why was the package not delivered ? How is the non-delivery of packages turned into RTO ?
Most of the returns of orders are recorded because of the following possible reasons:

• Incomplete or incorrect details of the customer (wrong contact number, ZIP code)

• Non-availability of the customer to receive the package

• Deny from receiving the package 

• Closed-door or premises (hotel, offices, hostel, etc.)

• Failure of re-attempt for delivery of the packages

• Fake orders

• Delay in Shipping (purpose already fulfilled)

These are the major reasons because of which the package remains undelivered and the courier company has to return the package to the seller after the unsuccessful attempts which leads to the loss of ROI.

Here is how technology can help you to prevent the RTO percentage ?

Through innovation and technology, it is easy nowadays to keep track of everything. From customers’ purchase history to detect the fraud so why not implement the solutions that can assist for a major workload.

Let’s have a look at the possible measures you can take to control the non-delivery of the package and its return in the coming festive season. As the festivals are near, you will start to receive extremely high orders in no time. So, you should be prepared for the related baggage and its control measures because as soon as the sales begin there will be no time left to tackle these problems. You will have to fulfill the shipping without any delay and damage.

Solution 1: IVR Calling

IVR (Interactive voice response) is a technology with which you can generate an automated call to connect with the customer for their response. You can include this as the first step to take the follow up after you receive any purchase order. Cash On Delivery (COD) is a major factor responsible for the cancellation of orders or fake orders so to reduce COD frauds you can make IVR calls compulsory for:

All the orders with Cash On Delivery (COD) payment method and the orders that belong to the high price range like heavy electronic items, gym equipment, etc.

You can verify the purchase order from the customer through IVR calling to check its authenticity so that it could help to save a lot of time, effort and money, especially in case of orders with COD payment method.

Solution 2: Non-Delivery Follow-Ups

NDR report is a receipt which shows the non-delivery of the package and the reason associated with it. NDR management is an automated process that assists to reduce the time for processing undelivered orders. Through the NDR follow-ups, the seller can handle its undelivered orders on a multifunctional NDR dashboard that will assist to make follow ups with the customer for their availability to receive the package and to perform the delivery re-attempts.

The requirement of the connection with the customer can be either to confirm their physical presence at the address to receive the package or the mode of payment with COD option (pseudo/cash) they have selected, are they ready with cash or not. So that it would not cost you the extra cost associated with shipping and its re-attempts.

Shipway can assist the sellers with effective NDR follow-ups and reduce the RTO percentage by checking the delivery preference of the customer. The system helps to collect automated follow-ups from the customer to take action against the undelivered orders and their re-attempt for shipment with the courier partners.

Solution 3: Customer’s Purchase History

Also, you can check the customers’ purchase history, to notice the behavior of the customer for his/her orders whether they are returning the products frequently (customer in the habit of returning orders). The purchase history of the customer can provide you information such as  the products he/she has purchased before, How much each purchase order costs? When the product was bought? How many products from the order were not received (RTO)? Are many of the products ordered with COD? Is the customer habitual of not receiving the orders? And much more.

This will help you to judge the order placed by the customer so that you can take action accordingly, such as cancellation of the COD option for that customer, and blocking the fake customer ID.

The feature can also help to improve the individual customer experience by targeting your promotions and advertisements and personalized messages.

Solution 4: Fraud Detection

The sellers could take the assistance of AI solution systems to detect fraud orders or fraudulent. The detection could save the sellers a huge effort, time, and cost associated with the preparation and shipping of the order.

These solutions have the ability to analyze the placed orders, based on various parameters and help to prevent RTO losses to your business. The software like Thirdwatch, an AI-driven solution helps online sellers prevent RTO by deducting potential frauds through device fingerprinting (customer’s details such as name, contact number, email, IP address and device, etc.) and order details (such as items, quantity, price, etc.).

Fraud detection helps you to look for strange activities of the customers such as bulk orders put by a new customer ID, COD as payment for all the products, etc. The system will help you check the authenticity of the customer’s information such as genuine or fraud phone number, address, or ZIP code.

Conclusion:

The above-mentioned solutions are the effective methods that could help sellers to reduce the RTO percentage in the upcoming festive season. So that you can focus on sales with full efficiency when you know you have your back covered with the effective technology and integrating solutions available in the market. The reduction in RTO will help you raise your ROI on the business and gain customer loyalty as well.

You are most welcome to schedule a demo for Shipway, a Multichannel Order Management & Shipping Automation solution.