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Following episode 6, where we talked about Scaling the D2C Supply Chain, it is a natural progression to talk about Reducing RTOs in episode 7. This time around we had experts Devika Srimal Bapna, CPO for Faballey, a brand that’s been around for a decade as well as Chetan Siyal, the CMO of Snitch, a brand that has shown immense growth over the past two years – a “pandemic baby” as he refers to it. This session was moderated by Shivam Dang, Director of Business Development at Simpl.
What is RTO and its major contributors?
RTOs are basically a leak in the sale journey – when a customer has landed on your site, added to the cart, made a purchase and checked out but the sale still hasn’t happened due to reasons you can’t control, it can be frustrating. These RTOs can also prove to be a major hit to the bottom line in terms of wasted marketing and shipping costs.
Cash-on-delivery (COD) is a major cause for RTO – but unfortunately, India is a nation where brands cannot survive without offering COD. Many brands have experimented with turning off COD on their platform and failed with their orders dropping greatly.
However, the good news is that prepaid orders have increased as a result of all the digitization that has happened over the past few years. As a brand, you can also focus on these three major drivers to increase prepaid orders:
RTO-reducing measures for brands starting out
Chetan talked about Snitch’s journey and how they overcame the impact of RTOs in the initial stages by following a “PCS” metric. PCS refers to payments, communication and shipping in the same order.
And, how does this work?
Following these key steps will help reduce RTOs for sure – Snitch saw a difference of 20-25% in doing so.
Incentivizing for prepaid vs charging for COD
Converting COD orders into prepaid requires changing a customer’s mindset – however, charging a customer for COD orders is not necessarily penalizing them but covering the costs of enabling customers to pay on delivery. On the other hand, when you give customers an incentive for paying online, you’re essentially averaging the costs on your end.
Building trust with customers
Spending time and effort on building a brand can go a long way in converting customers and reducing RTOs. Today’s customers will hear about a product and then hop onto Amazon or Myntra or other marketplaces because of its easy return policies and delivery guarantees. However, a good experience with your product with automatically bring them to your D2C site and you’ve earned them as a loyal customer.
On the other hand, customer experience is a major trust builder. If someone has experienced your website and has had a good experience, this will help build trust to a certain extent. One thing that has worked well for Snitch is micro-influencers over macro-influencers. Their customers were their brand ambassadors, and nothing instills more trust than customer advocacy.
Key Takeaways
Wrapping up
We ended this session with a deeper dive into the more minute ways of reducing RTOs while Chetan and Devika took questions from the audience around AI tools to use to reduce RTOs as well as a discussion around where Indian D2C brands stand in comparison to global brands.
For more insights into Reducing RTOs for D2C brands, watch the webinar recording now!
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