An increase in e-commerce returns has dug out many problems for the growing D2C brands. Here, orders that return to origin cost the most as 40 percent of the e-commerce shipments are returned as RTO (return to origin), especially when the payment method is COD (cash on delivery).
"Today e-commerce competition is very intense, demanding an excellent customer experience. Therefore brands have to pay attention to the quality management of deliveries so that no shipment gets undelivered," said Gaurav Gupta, Co-founder of Shipway.
Clearly, despite the increase in profit margins, ROI, and expected 19.2 percent growth in 2021, D2C brands are still struggling with RTOs.
"We wanted e-commerce merchants to monitor their non-delivered shipments and reduce RTO percentage through technology. In order to help them uplift their businesses, we enable them to manage their undelivered shipments in an efficient way with an automated NDR management system," said Gaurav Gupta.
Taking a Dig on, What is NDR?
NDR, Non-Delivery Report is a report generated by the courier partner for undelivered purchase orders or failed delivery attempts.
With accurate non-delivery reports, the D2C seller has two alternative actions to take,
1. Make a re-attempt for a failed delivery.
2. Directly mark the failed delivery as RTO.
How RTO Affects the Business?
The undelivered order marked as RTO, blocks the inventory making the situation more worse as it can't be used until released for further use.
Also, in the warehouse, until the product goes through a thorough inspection for quality check by the specific department, the inventory will remain locked. It needs to be approved for optimum quality, to be restocked or will be scrapped otherwise.
The locked inventory due to RTO breaks the cash flow and hence brands have to bear extra costs besides shipping costs (forward and reverse).
It also affects the business by consuming extra warehouse space and obstructing customer satisfaction & retention.
Sum up of all the losses faced by brands due to RTO shipment:
● Shipping charges for both forward and reverse shipment.
● Costs in Repackaging.
● Product damage.
● Costs in the handling of recalled inventory.
● Locked Inventory.
● Disposal/Scrapping Cost.
● Loss of probability.
● Cost of client turnover.
How Automated NDR Management Reduces RTO?
Automation in NDR management organizes the series of steps that are required to be taken after a failed delivery attempt to make sure that the shipment is delivered successfully.
The series of steps includes regular monitoring of non-delivery reports so that necessary actions could be taken against undelivered purchase orders (irrespective of the reason behind non-delivery) i.e., non-delivery follow-ups.
How does Shipway Assist D2C Brands to Handle their Undelivered Shipments?
Shipway is associated with the leading carrier partners receiving regular updates over the delivery status of the shipment helping D2C brands to take action according to the real-time shipment updates.
Excluding all the other manual processes, Shipway allows brands to take action on undelivered shipments as soon as it is updated by the carriers' side. Enabling automated follow-ups to make the communication better and proactive with your customers.
"Looking at the current trends, D2C brands not only want products that simplify their operations but a tool that also helps them to tell their customers that they care. That they will make a delivery re-attempt if not successful in the 1st attempt, irrespective of the reason. In the end, it is all about creating a great customer experience," stated Gupta.
Adding to that he said, to fill the void their team created one more feature that will ask and inform the end customers for the re-attempt of the delivery, as soon as it is marked undelivered by the delivery guy.
These follow-ups are created according to the reason for undelivered orders. Like,
- For the wrong address, ask the customer to change their address with the correct one.
- For customers' unavailability, ask them for their available date and time.
Therefore, the flow of marking follow-ups become -
● The carrier partner tries to deliver a product at the customer's provided address but could not deliver it.
● The delivery guy updates this status undelivered, along with the reason for non-delivery.
● As soon as the delivery status reflects on your Shipway NDR dashboard, you are ready to take the action.
● You can decide whether you want to mark the re-attempt for the delivery of this order or opt for RTO.
● In case of re-attempt, the carrier partner can re-attempt for delivery on the same day or the next day.
The automatically sending follow-ups whenever the order delivery is marked failed by the delivery guy gives leverage to brands to make up the chance for successful deliveries by making a delivery re-attempt.
Concluding the advantages of automated NDR management.
● High rate of successful deliveries
● Reduced RTO percentage
● Improved communication with customers
● Increased customer experience
● Increased customer retention
Say hey to non-delivery follow-ups!