Why has the average order value for DoorDash's DashPass subscribers decreased by 15% over the past month?

Introduction

The recent 15% decrease in average order value (AOV) for DoorDash's DashPass subscribers over the past month is a concerning trend that requires immediate attention. As we dive into this product issue, I'll employ a systematic framework to identify, validate, and address the root cause while considering both short-term fixes and long-term strategic implications.

To tackle this challenge, I'll start by asking clarifying questions to ensure we have a comprehensive understanding of the situation. Then, we'll rule out basic external factors before delving into the product specifics, user journey, and metric breakdown. We'll gather and prioritize relevant data, form hypotheses, conduct root cause analysis, and finally propose validation methods and next steps.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might be seasonal factors at play. Has this 15% decrease been compared to the same period last year?

Why it matters: Seasonal trends could explain the decrease and impact our solution approach. Expected answer: Yes, it has been compared, and the decrease is still significant. Impact on approach: If seasonal, we'd focus on year-over-year strategies; if not, we'd investigate recent changes.

• Considering user segments, I'm curious about the distribution of this decrease. Is the 15% drop consistent across all DashPass subscriber cohorts, or are certain groups more affected?

Why it matters: Identifying specific affected segments could point to targeted issues or changes. Expected answer: The decrease varies among cohorts, with newer subscribers showing a larger drop. Impact on approach: We'd focus on recent changes that might disproportionately affect newer users.

• Thinking about recent product changes, have there been any significant updates to the DashPass program or the DoorDash app in the last 1-2 months?

Why it matters: Recent changes could directly correlate with the AOV decrease. Expected answer: Yes, there was a UI update and a change in the reward structure. Impact on approach: We'd investigate how these changes might have altered user behavior.

• Considering the competitive landscape, have there been any notable moves from competitors or changes in the food delivery market in the past month?

Why it matters: External market forces could be driving the AOV decrease. Expected answer: A new competitor entered with aggressive pricing in some markets. Impact on approach: We'd analyze our pricing and value proposition in affected markets.