Is RTO Killing Your eCommerce Marketing True ROI? Here’s How To Fix It

Piyush Gupta
Reading Time: 5 minutes
Is RTO killing your Ecommerce marketing budget

Free shipping and returns are two of the biggest reasons for online shoppers to choose your brand over the competition. 

The problem is, shoppers, think nothing of returning items they just ordered a few days ago. The scenarios can be different – the item was the wrong size, they found a better price or they just didn’t like it. 

The truth is that consumer tastes are fickle and evolving continuously and e-commerce businesses need to learn to live with it. However, every return leaves clues that can help you optimize the return rate and ensure that it does not take a huge bite out of your hard-earned margins. 

In this blog post, we shall dwell on how to fix the Return-to-Origin (RTO) menace for good.

Click here to learn about the best tools in the market to reduce your RTOs.

Why Should RTOs Be Continuously Tracked?

If you are an online e-commerce store, controlling Return to Origin (RTO) has got to be one of your top business priorities. Not only can a returned order multiply your shipping and handling costs, but it can also tie up inventory – first in two-way shipping and when it finally arrives, it may require repackaging or recheck for quality. 

What should have been a relatively straightforward process of delivery from the warehouse to the customer’s doorstep turns into a logistical problem that consumes a lot more time and effort than the sale might even be worth. On the business side of things, you could also face cash flow problems if RTOs increase in frequency. 

To be able to plug any loopholes in your order fulfillment process, tracking RTOs is critical. This can reveal systemic problems that can otherwise be easy to miss.

Asking some basic questions would be a good starting point:

  • Is the audience targeted relevant?
  • Is there any particular market segment that is giving more returns compared to the rest of the pie?
  • Can adding delivery charges on low-cost orders potentially reduce RTOs?

Full Funnel Stitching is a tool of choice that can help you overcome frequent RTOs.

How can Full-Funnel Stitching Help in Minimizing RTO & Enhance the Campaign Performance?

It may be too early to blame your fulfillment partner just yet. Instead, step back and take a look at your entire marketing funnel to identify the probable cause for RTOs.

Overlaying RTO and order cancellations numbers with engagement and conversion data across the buyer journey will help you arrive at the actual cost incurred per order which is generally much greater than Cost Per Purchase (CPP).

Full funnel stitching can help you identify high RTO regions and tailor your ad campaigns accordingly. This allows you to manage ad spends more effectively. Ultimately, it helps improve the Customer Acquisition Cost as well as Customer Lifetime Value for your brand.

You might want to consider targeting an audience whose CPP is higher but RTO is lower over one which has a lower CPP but relatively high RTO in order to improve your ROI.

The advantage of this is you will be able to measure the exact strength of the paid campaign and along the way, define the quality of the acquired audience too. Win-Win!

Analyzing Your Complete Funnel in Defined Dashboards using EasyInsights

Putting together data from multiple analytics tools and ad platforms to figure out the true RTO rate can be tricky and time-consuming.

That means multiple spreadsheets, custom data filters, and the odd chance of a freak error that could make it all a waste of precious time. 

The alternative – a ‘made-for-you’ report that makes decision making easy and seamless. 

EasyInsights seamlessly connects with your CRM tool and a variety of ad platforms and analytics to give a complete picture of the customer journey from the first impression to conversion and RTO.

It can help you justify your campaign strategy effectively and give you greater confidence while executing it. Once the integration is complete, EasyInsights does all the heavy lifting for you in terms of mining and validating user data so that you can easily perform deep dives that would have taken hours of work otherwise. What’s more, reports are updated on a real-time basis in EasyInsights which ensures that your decisions are based on the latest available performance data.

With EasyInsights, tracking orders throughout the fulfillment cycle takes just a few clicks. This makes it possible for you to take early action to correct RTOs by optimizing messaging, audiences, and ad creatives.

Case Study

As you can see from the table, our research over a 3 month period showed that catalog campaigns fared much better than non-catalog ones in terms of RTO percentage. So, the brand started to spend more on catalog campaigns while scaling at the same time. 

In terms of Actual RoI(Calculated after removing RTO orders), they were able to see a 15% improvement month on month with a growth of nearly 100% in the absolute number of transactions.

Conclusion

If your e-commerce businesses have high returns and cancelation rates, it may be a great idea to connect your advertising data with CRM data and optimize your marketing accordingly. You will find interesting patterns in terms of particular geographies, audience type, gender, SKUs, age group, etc leading to overall high RTO. The marketing aspect of controlling RTO & Cancellation is overlooked which need not be the case.

Click here to learn about the importance tracking of RTOs, and how crucial it is for your businesses.

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