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In the entire ordeal of delivering delight to their customers at their doorsteps, the businesses are struggling with heavy cost bleeds in the form of returns or RTOs. Statista reported that the total value of merchandise returns amounted to more than USD 1 trillion in 2019. Returns costs approximately 66% of the original item’s cost.
As evident by these stats, these returns can be extremely costly for brands especially if they are not managed properly and if the on-field returns process is not optimized. Optimizing returns by clubbing return orders pickups with regular deliveries, smart warehousing to reduce the travel to origin warehouse and efficient control over the movement of return shipments can help reduce this burgeoning cost.
When it comes to optimizing the returns and reducing RTO, having a smart last mile delivery software becomes crucial as it ensures highly efficient orchestration of delivery operations and RTO management. Before we delve deeper into how the software contributes to minimizing RTOs, let’s understand what is RTO and the reasons causing RTOs.
RTO (Return To Origin) is the status marked to the orders that are failed to deliver to customers even after several delivery attempts. RTO results in the product being shipped back to the seller. RTOs greatly impacts business profitability as any undelivered item is sent back to the seller, and the seller has to bear this cost.
It may happen that at the time of the checkout, a customer enters an incorrect or incomplete delivery address. Any mistake in the delivery address makes it difficult for a driver to locate it. This inability to locate the address leads to delivery failure and hence, RTO.
The unavailability of customers at the delivery location at the time of delivery is also one of the most common reasons for delivery failure. In this case, the driver marks the status of the delivery as “undelivered”.
Many eCommerce companies offer a “reschedule delivery” option to improve their customer experience. And if the order is out for delivery and the customer chooses this option, the delivery fails and the order is marked as “undelivered”.
The delivery of an order fails if the customer doesn’t have sufficient cash to make the payment. It generally happens when the customer doesn’t receive any delivery-related alerts, such as the order is out for delivery, delivery ETA, and more.
Fake delivery attempt is when a driver doesn’t attempt to deliver the order but marks it as “undelivered” saying the customer was not available. This type of failed delivery directly impacts the customer experience, and a brand’s reputation.
A customer might refuse to accept the delivery if the order delivered was late or simply no longer needed. This is one of the common reasons for delivery failure and, ultimately, RTO (return to origin).
It generally happens if the courier partner or the assigned driver doesn’t serve that particular region. An unserviceable location results in delivery failure, and when the limits of delivery failures reach, the order is returned to its origin.
Reverse logistics and return to origin/RTO might seem similar; however, both the terms are different. The former starts when a customer raises a return request as it didn’t meet their expectations; however, the latter is initiated when the product remains undelivered even after several delivery attempts.
In the case of RTO, a product never reaches the customer due to customer’s unavailability at the time of delivery, wrong/incomplete delivery address, or any other reasons. RTOs can bleed a business dry as the seller has to bear the cost of both the forward and backward/reverse logistics, do the repackaging and quality checks again, and deal with the blocked inventory.
An NDR or Non-Delivery Report is basically a notification that includes the details of the undelivered order. For example, if the first delivery attempt fails, all stakeholders (the courier company, the eCommerce company/retailer, and the customer) will receive an NDR mentioning “Sorry the delivery failed as the customer was not available at the time of delivery/customer rejected the order”.
Keeping a track of all deliveries, communicating with customers in real-time, managing NDRs, and taking corrective measures on each NDR is not possible without investing in technology. Implementing last mile delivery software can prevent the occurrence of problems that increase the percentage of RTO. Here is how:
The last mile delivery software keeps all stakeholders informed by sending them real-time delivery alerts. Once the order is confirmed, it triggers a tracking link through WhatsApp/Email/SMS. Using this link, customers can check the real-time status of the shipment along with its estimated time of arrival.
Moreover, the customer also receives the delivery driver’s contact details and vice-versa (masked for privacy) to communicate in case of rescheduling or to receive the delivery at a different location. Having accurate ETAs, order tracking, real-time customer communication reduces the chances of customer unavailability and hence, RTO.
The last mile delivery system facilitates smart route planning by leveraging technologies such as artificial intelligence and machine learning. It considers multiple factors, including the weight and size of the products, capacity of the vehicle, historical data of routes, delivery location, and delivery time window to generate the most optimal route.
Automated route planning helps in avoiding delivery delays, which is one of the reasons a customer rejects the order at the time of delivery. Besides, it also maximizes the number of deliveries per trip and reduces fuel consumption and CO2 emissions.
Smart last mile delivery software includes an advanced geocoding feature to convert text-based addresses into exact longitude and latitude. The accurate address mapping avoids any misroutes and delivery delays.
The software uses technologies like artificial intelligence and machine learning to look into existing data and identify address inconsistencies and correct them based on delivery history. An advanced last mile delivery system also highlights addresses that have a history of delivery failures.
Fake delivery attempts directly impact customer experience, and last mile delivery software prevents the same by validating the NDR with the end customer. As soon as a driver marks the order status “undelivered”, the software automatically triggers a message or call to authenticate the NDR with the end customer.
The end-customer can validate the reason or raise a complaint that the driver didn’t make a delivery attempt and mention the NDR as “customer unavailable. Besides, the last mile delivery solution also empowers businesses to deal with dubious customers by collecting electronic proof of delivery.
Advanced last mile delivery software has the feature to automatically assign all orders to the right 3PL. On the other hand, if the same process is done manually, it may include inconsistencies or end up assigning the order to a 3PL that doesn’t serve a particular region.
Manually managing order allocation is a cost and time-intensive task. The last mile delivery system automates the process, saving both time and cost, and ensures accuracy in the results.
The last mile delivery solution simplifies NDR management by consolidating multiple reasons under one roof. A driver can simply select from those reasons to update why the order delivery failed. NDR management also helps businesses to look into NDRs that frequently occur at an origin hub, with a 3PL, or in a particular region.
The last mile delivery management software enables courier companies or businesses to send an online payment link to allow customers to pay online for their COD orders. It helps in avoiding delivery failures, and ultimately RTOs, that happens if the customer does not have sufficient cash to make the payment.
Shipsy’s last mile delivery solution empowers businesses to handle last mile deliveries efficiently and profitably. It includes top-notch features such as route planning, real-time tracking, and auto-order allocation to smartly optimize delivery routes, keep track of multiple consignments, and reduce reliance on manual elements.
The software also facilitates seamless NDR management and geofencing to ensure drivers follow the right delivery route and make timely deliveries. The custom-based last mile solution offers granular level visibility and ensures hassle-free communication among stakeholders using a unified dashboard.
Shipsy’s last mile delivery management software helps businesses unlock the following benefits:
To know more about how Shipsy’s last mile delivery software contributes to reducing RTO or help with NDR management, reach out to our experts.
Having a proper plan in place, leveraging data, using advanced last mile solutions, tracking deliveries in real-time, and focusing on customer experience is essential for last mile optimization.
Last mile delivery costs includes the investment needed to facilitate the final movement of goods from the distribution hub to customers’ doorsteps.
