RTO rates for AJIO orders to Tier 2 cities rose 20% during the Big Bold Sale. How would you find the root cause?

Introduction

During AJIO's Big Bold Sale, the return-to-origin (RTO) rate for orders shipped to Tier 2 and Tier 3 cities rose 20% compared with the previous sale. RTO means the parcel never reached a happy customer: it was refused at the door, the customer could not be reached, or the address was wrong, so it travels all the way back to the warehouse. In Indian e-commerce, RTO is concentrated in cash-on-delivery (COD) orders and in smaller towns, and every RTO costs forward and reverse shipping plus inventory that sits in transit during the most important sales window of the season.

The task is to find the root cause and propose a fix. I'll clarify, rule out external factors, map the journey, break down the metric, gather data, form hypotheses, test them and recommend a resolution.

Step 1

Clarifying Questions (3 minutes)

• How is RTO rate defined here: RTO orders divided by shipped orders, or by delivered-plus-RTO orders?

• Hypothetical answer: RTO orders divided by shipped orders, for orders shipped during the sale window.
• Impact: Cancellations before shipping are excluded, so we focus on post-shipping failures.

• Is the 20% a relative increase (for example 18% to 21.6%) or 20 percentage points?

• Hypothetical answer: Relative; RTO rose from about 18% to 21.6% of shipped orders in Tier 2+ cities.
• Impact: A meaningful but not catastrophic change, consistent with several small factors or one large one.

• Did anything change in the sale itself: offers, COD policy, new categories, new logistics partners?

• Hypothetical answer: The sale ran bigger "lowest price" offers on AJIO's own labels, and a new regional courier was added for some states.
• Impact: Both are candidate causes.

• Is the rise uniform across categories and states, or concentrated?

• Hypothetical answer: Unknown; we need to segment.