Stop Losing Orders: Cut Beauty Industry RTOs with ClickPost.ai

Do you know 40% of your beauty orders might never reach customers? Welcome to the other side of the beauty logistics industry, often referred to as the RTO crisis. 

You have spent dollars on customer acquisition, brand building, and logistics. You are also seeing the surge in orders, and the metrics look as perfect as you imagined. But everything shatters when the orders keep bouncing back at the doorstep. Even worse? You are paying additional costs for the round trip and gradually losing your profit. 

No doubt, RTO is one of the biggest challenges beauty brands are facing every day. And the longer it’s ignored, the more it eats into your revenue. 

In this article, we’ll look into various aspects of RTOs in the beauty industry—what really causes RTO in this industry, how RTOs impact the brand, and how ClickPost can help you reduce RTOs. 

Let’s start with the basics. 

Key Factors Driving High RTO in Beauty eCommerce

If you break down the growth of a beauty brand, factors like impulse buys, emotional connection, viral trends, and aesthetics always stand out. With the rise of social commerce, these growth drivers are firing more than ever. Ironically, the same factors that are fueling growth are also responsible for the higher RTO rates in the beauty industry. 

To clearly understand the root causes of the RTOs in beauty eCommerce, we have classified them into three categories:

I. Customer-related Factors

• Impulse buys: Take a close look, and you’ll find most beauty purchases are impulsive. A lipstick shade goes viral on Instagram; thousands of customers buy it. A limited edition of serum goes viral with discounts, and shoppers purchase it out of pure FOMO. But when their remorse kicks in and their impulse fades, they reject the order, and it becomes an RTO. 
  
  
• COD dependence: Most beauty brands rely on the COD method to drive fast conversions. Sure, COD improves initial conversion rates, but it also lowers commitment, and customers reject the order at the very last stage, which increases RTO rates.
  
  
• Deliberate refusal: Sometimes, customers just refuse orders intentionally due to multiple reasons. Maybe they have ordered from multiple brands and refused others after accepting one, or they have gotten better deals somewhere, or have been influenced by friends or family. This sudden change of mind can cause deliberate refusals and RTOs.
   
• Low accountability: Most beauty items are relatively cheaper than electronics and other luxury products. Low financial commitment makes it easier for customers to reject an order. Plus, it just takes them a simple ‘no’ to refuse it. That’s why refusing a parcel becomes a risk-free choice for them, which leads to higher RTO. 

II. Carrier-related Factors

• Delivery delays: Delivery delays are a major turn-off, especially when 60% of customers prefer fast delivery. Considering the last-mile complexities, sometimes orders take time to reach customers, leading to rejection and consequently RTOs. 
  
  
• Poor communication: If customers are kept in the dark regarding the delivery journey and the delivery time slots, it frustrates them. In case the delivery happens at an inconvenient time, the chances of rejection spike, which later leads to RTOs. 
  
  
• Fake delivery attempts: Often, delivery agents mark a delivery as ‘failed’ even without attempting to reach the customer. This fraudulent delivery attempt is another major reason for higher RTOs. 
  
  
• Wrong and incorrect delivery address: Most of the time, customers enter wrong or incorrect addresses while placing an order. This makes it difficult for businesses to reach the exact customers, ultimately leading to RTOs. 

III. Product-related Factors

• Quality concerns: Since beauty products are directly applied to skin and hair, customers remain extra conscious about the products. Any negative review regarding breakouts or itching can make the customers think twice before accepting the order, which pushes up the RTO rate. 
  
  
• Limited return policy: In beauty eCommerce, many products can’t be returned to the brand due to safety and hygiene issues. This limited return policy makes shoppers skeptical about the product, and eventually, they reject the item, which turns into an RTO. 

Why RTO Could Be the Biggest Threat to Your Beauty Brand’s Growth

Let’s unfold how RTO directly hampers your business: 

1. Direct Financial Losses

Every RTO case imposes an extra financial burden for brands: forward logistics + return. Say you spend $30 on the forward shipping of each item. Now, if the shipment falls under the RTO, you will have to spend a total of $60 for the entire trip. Now, if you face higher RTO rates in a month, it can seriously affect your profit margin. 

Alongside the logistics costs, you might also face the losses due to product damage. Beauty products, being very fragile (like glass serum bottles or delicate eyeshadow palettes), are prone to breakage and lose their freshness. In fact, most of them can’t be refurbished or repackaged, meaning the entire value of the product is written off. 

Now add warehousing and disposal costs on top of these. So, RTOs not only cause lost sales but also incur extra expenses on your budget. 

2. Operational Overhead

The entire reverse logistics workflow adds another layer of pressure to the businesses. They require extra labor for inspection, repackaging, or discarding. Sometimes, this congests the warehouse, especially during peak seasons, and might delay the entire operation. 

3. Brand Reputation Damage

If an RTO happens due to carrier-specific issues, it also signals customer dissatisfaction. When a customer faces one negative experience, they tend to leave the brand and switch to its competitors. With the beauty and personal care market size expected to touch $937.13 billion by 2030, customer loyalty is becoming even more fragile day by day. 

Related read - Returns Management for Beauty & Cosmetics Brands

Why Legacy Approaches Fall Short in Reducing RTO in Beauty eCommerce

If you are a budding entrepreneur dealing with only a few orders, managing RTO using the legacy method might work for you. But when you handle a decent amount of orders (say more than 3k a month) and have a loyal community of customers, the manual method won’t cut it.

Hence, in today’s trend-driven beauty market, brands are transitioning towards automated solutions to reduce RTOs. These systems adopt automation, work in real-time, and make the whole process more connected. At the same time, they reduce manual effort, so brands can take quick action on RTOs and reduce them to a great extent. 

Most of them even offer various solutions like intelligent carrier allocation and real-time delivery visibility to safeguard brands from RTOs way before they actually happen. 

How ClickPost’s Solutions Help Reduce RTO in the Beauty Industry

ClickPost is a multi-carrier shipping software that offers various solutions to reduce RTO for beauty e-commerce brands. Let’s unlock them one by one. 

1. AI-powered NDR management suite 

ClickPost has come up with an automated end-to-end NDR management solution to reduce RTOs for brands. Once an order is marked as NDR, it immediately updates the carrier’s databases with the latest NDR cases. After that, it uses automation to segregate them into issue-specific buckets. According to that, it triggers automated alerts to shoppers via channels like email, SMS, and WhatsApp to fetch their response. 

You will also get the flexibility to build your own custom NDR journey and configure the timelines of the NDR messages to shoppers. Once customers respond to these messages, it relays that data back to shoppers, so the next delivery attempts are made. You will get to track the entire process, from the first failed delivery to the reattempts, on a centralized dashboard, so you can better control the entire journey and take faster action on RTO resolution. 

2. Intelligent voice agent (ClickPost Parth)

Manual calls to fetch customer responses work, but only up to a point. In beauty eCommerce, where trends and customer demands are changing every now and then, manual calls make the resolution process slow. Thus, ClickPost has launched its own AI NDR agent, Parth. 

Like a human agent, Parth communicates with customers using its intelligent decision-making approach and analyzes historical NDR reasons to strategize carrier allocation. Parth remains active 24/7 (even during non-working hours), can converse in different languages as per customers’ preferences, and has a track record of reducing failed deliveries within just 2 mins. 

3. AI-driven carrier allocation 

ClickPost has come up with an intelligent carrier allocation engine to reduce RTOs right from the point of dispatch. It allows brands to set up certain criteria (lower RTO% and faster delivery speed), based on which its AI-powered system selects the most suitable carrier for each order. This further helps in reducing RTO% by addressing potential issues at the dispatch level itself. As per our internal survey, AI-driven carrier allocation has the capability to reduce RTOs by 40%.  

4. Complete Visibility of the Journey 

ClickPost offers a centralized dashboard where brands get end-to-end shipment visibility, from carrier allocation to dispatch to the moment the order is delivered to customers. This centralized visibility allows them to stay proactive with the NDR cases and take required action as soon as possible. This reduces delays in NDR resolution and increases the chances of successful delivery in the second attempt. 

At the same time, it keeps customers updated with every stage of the delivery journey, so they stay prepared to accept the delivery. This reduces RTOs caused by customer unavailability. 

5. Dynamic EDD prediction

ClickPost uses its own intelligent data science module to fetch the best possible expected delivery date for each order. These expected delivery dates are displayed on the product, checkout, and tracking pages, so customers stay informed about when they can expect the order. This transparency eliminates their anxiety, like “Will it arrive on time?” or “Should I cancel the orders?” which are the prime reasons for pre-delivery order rejections. As a result, it reduces RTOs to a great extent. 

6. Robust integration

ClickPost comes pre-integrated with 500+ carrier partners, 40+ communication gateways, and leading WMS and OMS systems. This robust integration makes sure all systems work in perfect sync, enabling smoother NDR management and improved delivery speed. This ultimately lowers RTOs caused by delivery delays. 

7. End-to-end delivery automation

ClickPost speeds up the entire fulfillment journey by automating the entire process—from order creation to carrier allocation to tracking and last-mile delivery (or even returns). This automation enables faster decision-making and ensures the orders reach customers at the exact right time, without any delays and order rejections, which are the potential reasons for RTOs. 

8. Intelligent insights 

One of the best ways to prevent RTOs is to dive deeper into the NDR cases, flag the loopholes, and strategize solutions in a better way. Hence, ClickPost offers in-depth insights into all NDR cases, including month-wise RTO rate, RTO reason analysis, all NDR feedback reports, NDR shipment performance trends, and more. This data-driven approach allows brands to implement refined strategies and reduce future RTOs. 

ClickPost’s NDR management suite and Parth have a record of reducing RTO by 40% and lowering customer support load by 75%. 

Here’s what Vinesh Gavit, the data analyst of Nykaa, has to say about ClickPost:

“While using ClickPost, it’s very easy to get all the data in a one-stop solution. It helped reduce the RTO% and customer complaints as well.” 

Conclusion 

No doubt, beauty brands are among the most affected by high RTO rates. Whether it’s because of impulse buys, low customer accountability, or missed deliveries, beauty retailers face the RTO crisis almost every day. While it’s a recurring problem, they can significantly reduce the number of RTOs and safeguard the profit margin by harnessing an AI-powered solution like ClickPost. If you want to know more and give your brand an RTO-proof makeover, book a demo with us. We are always up for discussing more.