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February 23, 2024

What is NDR management and how can it reduce RTO in eCommerce?

NDR is a report created by the courier partner on shipments that cannot be successfully delivered for any reason in a specific time frame. It briefly shows eCommerce sellers the orders which cannot be delivered and the reason for the failed delivery.

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NDR and RTO are the two most common terms that eCommerce sellers encounter in India. According to an estimate average eCommerce returns stand between 30 to 40% and not managing them effectively can reduce profits by up to 25%.

For an eCommerce seller, successful deliveries are as important as getting huge orders from their customers. Still, there are several instances where deliveries may get delayed or canceled in the last leg of the journey. This is where businesses can leverage NDR management and increase their successful delivery rates.

What is NDR?

NDR means Non-Delivery Report. It's a report created by the courier partner on shipments that cannot be successfully delivered for any reason in a specific time frame. It briefly shows eCommerce sellers the orders which cannot be delivered and the reason for the failed delivery.

Typically any courier company makes three attempts to deliver the order before marking it to RTO, meaning Return to Origin. So it is important to take the necessary steps in a specific time frame to ensure successful delivery.

Why does NDR happen?

NDR or Non-Delivery Report happens when a delivery agent is unable to deliver the order to the end customer. Agent, in turn, marks the delivery as NDR with the relevant reason, the information is then pushed toward the seller where he can take the necessary steps to avoid failed delivery.

What are the most common reasons for NDR in eCommerce?

Recognizing the cause of NDR is a great deal for sellers in deciding whether delivery can be made or not. A large number of NDRs can be converted into successful deliveries apart from a few no-hope cases leading to RTO. Therefore it becomes of utmost importance to find the reason for NDR and take fast action on them. Here are few most common reasons for NDR that arise from both customers and carriers sides:

Most common reasons for NDR in eCommerce

1. Customer Related NDRs

1.1) Customer refused to accept the delivery

Customers may exercise their right to refuse to accept the order at the delivery time. Customer refusal or rejection of accepting shipments is the most common reason for NDR and accounts for approximately 37% of total NDRs. This may be because of multiple reasons such as a change of mind, not being happy with the condition, or finding a better deal or product. This cancellation can sometimes be verified by courier partners such as Bluedart and Delhivery by asking customers to share OTP to avoid fake cancellations by delivery agents which are explained in point 2.1.

1.2) Customer Unavailability

There are certain cases where the customer is unavailable at the delivery location at the time of delivery and this is the second most common reason and accounts for approximately 28% of total NDRs. The end customer might be away and may not have anyone else at the delivery location to accept an order on his behalf. This may lead to rescheduling the delivery for another day.

1.3) The customer was unreachable

Certain cases may occur where the customer is unable to reach during delivery. In these circumstances, delivery agents mark them as NDR. The shopper's mobile could have been switched off or he might be facing network issues are a few of the reasons for the above.

1.4) Incomplete or incorrect address

Incomplete or incorrect address issue is also very frequent reason that sellers see in their NDRs. These issues account for approximate 14% of total NDRs. This kind of problem mostly occurs around wrong pin codes, wrong addresses, no landmarks, etc. In India especially in tier 2, and tier 3 cities, addresses are not very structured and since the courier companies do not take live locations, locating these addresses becomes a real struggle for the delivery agents. This kind of problem mostly occurs around wrong pin codes, wrong addresses, no landmarks, etc. 

1.5) Delivery rescheduled by the customer

Customers can reschedule the delivery in case of unavailability. Approximate 8.8% of total NDRs happen because of rescheduling. This leads to a re-attempt to deliver the package. This may happen because the customer might be unavailable to receive the package at the time of delivery. The information to reschedule is provided by the customer to the delivery agent at the time of delivery, the agent then updates the reason for the NDR. 

1.6) Incorrect mobile number

The same kind of issue can occur as above in the case of the mobile number provided by the shopper. Delivery agents while trying to make the delivery may try to reach you, this may be in several cases such as being unable to find the exact location, no show at the destination, etc. It is important to ensure that customers have added a valid mobile number during the time of checkout to avoid the above situation.

2. Carrier Related NDRs

2.1) Fake delivery attempt by the delivery agent

Fake delivery refers to the situation where the delivery agent does not really make an attempt to deliver the package but still marks the delivery as NDR. It is crucial to monitor these fake attempts as it takes a toll on customer experience.

2.2) Out of delivery area

ODA or Out of the delivery area mostly refers to the situation where the carrier is not able to deliver the shipment because the specific address does not fall within their serviceable area and accounts for approximate 2% of total NDRs. This might happen in the case where the courier is not covering the whole pincode area, Sometimes courier companies outsource these ODA reasons to other local shippers which even they might not fulfill. Shoppers might also add a wrong pincode intentionally next to the serviceable pincode and ask the delivery agent to ship at a different address during the time of the delivery attempt. Carriers like DTDC and Bluedart charge from 1200 to 1800 to deliver in these ODA locations. 

2.3) Delivery not attempted

Unattempted delivery refers to a scenario where the delivery agent takes a few shipments with him from the distribution centre but is not able to deliver all in their defined working time. Under such circumstances, they mark these as unattempted.

Importance and Benefits of NDR Management in eCommerce

NDR or Non-Delivery Management in eCommerce can help D2C businesses to reduce their returns and improve the delivery experience drastically. NDR management allows sellers to take multiple actions in the last leg of the shipping journey such as notifying the courier partner to reattempt, updating the customer's address or contact information, or following up with the customer to make sure their order is delivered, etc.

1. Reduce eCommerce Returns

NDR management effectively reduces the RTO rate of an eCommerce business. Ecommerce sellers can leverage multiple NDR management tools like automated communication flow, flexibility to update addresses, IVR, etc to increase the successful delivery rate of their business. These tools helps businesses to bring down the returns percentages and save lot of cost for the business.

2. Customer retention

Keeping customers informed and following up with them in case of delays, helps enhance customer experience and increases the chances of them returning to the website for repeat purchases. This increases brand loyalty and obviously adds value to the business.

3. Increase in business profitability

Returns not only add extra shipping expenses for the sellers but also lead to lost customers. Efficient NDR management helps reduce these losses and increase profitability.

4. Reduce Fake deliveries

Multiple touchpoints with the shoppers help you to monitor fake deliveries. This in turn can increase the chances of re-attempts and avoid losing a customer.

5. Effective decision-making

There might be multiple reasons for NDRs based on carriers, customer behaviours, etc. Swift’s NDR analytics allows you to have a data-driven approach to these issues and make more efficient decisions.

6. Save cost and time

Businesses can save valuable time and cost by streamlining NDR management. Reduced returns and enhanced customer experience lead to an increase in revenue and reduced losses.

How can you avoid NDR?

Ecommerce sellers can avoid NDR by constantly being in touch with the customers. Following up with them in case of uncertainties and making sure timely actions are taken to eliminate the communication gap between customers and carrier partners.

1. Timely shipping

The first and foremost thing that a seller should do is to timely ship the goods. This avoids unnecessary delays and the shipment reaches the end customer in the predicted time. This ensures high efficiency that a brand reflects on its customers.

2. COD verification and order verification tools

As the major part of total eCommerce orders is COD, sellers can leverage COD and order verification tools to avoid NDRs. They can also convert their COD orders to prepaid using these tools as the prepaid orders are most like to deliver.

3. Choosing the right courier partner

Courier companies face different sets of challenges across different Indian reasons. One courier may be performing well in North India and not performing well in South and vice versa. Therefore it is important to choose the right courier partner for shipping based on different factors. Here are top 10 courier companies to consider for business shipping.

4. Address validation

Incomplete, wrong, or fake addresses are one of the major reasons for NDRs. Swift allows sellers to validate shoppers' addresses automatically via AI. This reduces fraud and increases shipping efficiency.

5. Detecting fraud customers

Sellers can leverage Swifts data-driven fraud detection to eradicate fraud orders. Swifts platforms allow merchants to validate addresses, mobile numbers, COD order optimization, etc.

6. Communication

Proper communication touchpoints must be set up with customers that allow sellers to follow up with shoppers in case of delivery exceptions. This results in getting a timely response from the customers and avoiding NDRs.

Effective NDR Management tools to avoid NDR

NDR management tools equip eCommerce sellers to effectively bridge the gap between customers and courier companies. The biggest challenge that businesses face is the timely processing of NDR. Here are a few ways sellers can integrate to effectively manage their NDR.

1. Advanced reporting and dashboard

Since there are lot of stages that happen across the shipping cycle, it is important to have a single dashboard for all your shipping needs. This dashboard allows sellers to keep track of NDRs, RTOs, and other critical stages.

2. Regular NDR Tracking

Tracking NDRs is the first and foremost important task for sellers to manage failed deliveries. It is important to track these NDR to determine the progress to ensure successful delivery.

3. Identify the reasons for NDR

It is important to understand the reason for the NDR to take the right action and push the NDR management in the right direction. Reason-based communication flows can be triggered.

4. Automated touchpoints for customer response

Different types of NDR need to be managed in different ways. Automated communication flow is triggered once the reason for NDR is classified. This is done across channels such as WhatsApp, SMS, IVR calls, etc according to the business requirements and preferences.

5. Update carrier agents

Real-time data flow happens between sellers and courier companies via direct APIs to ensure there is no further delay in processing NDRs. Real time communication flows between couriers like BlueDart, Delhivery, DTDC, or any other courier that is used for shipping.

6. Manual verification

Manual verification can be done to validate the reasons that are given by the carriers for the returns. Sellers can reach out to customers through an IVR call and get a valid reason. 

The truth is returns are very common problem that eCommerce sellers face and, managing NDRs can control and reduce these returns in a very significant way. With Swift’s efficient NDR management sellers can bring down the losses that come with the returns and give customers the enhanced experience to maintain their interest and willingness to do repeat purchases. To know more about how you can leverage Swift to reduce NDRs check our solutions here.

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