Why has the average order value for Gousto's vegetarian recipe boxes dropped by 15% over the past month?

Introduction

The recent 15% drop in average order value for Gousto's vegetarian recipe boxes over the past month is a concerning trend that requires immediate attention. To address this issue, I'll employ a systematic approach to identify, validate, and resolve the root cause while considering both short-term and long-term implications for the business.

My analysis will follow a structured framework, beginning with clarifying questions to establish context, followed by a thorough examination of potential causes, data analysis, hypothesis formation, and finally, a comprehensive plan for resolution and future prevention.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might be seasonal factors at play. Has there been any significant change in vegetarian recipe offerings or pricing during this period?

Why it matters: Seasonal changes or pricing adjustments could directly impact order value. Expected answer: No major changes in offerings or pricing. Impact on approach: If confirmed, we'll need to look deeper into user behavior or external factors.

• I'm curious about the user segments affected. Are we seeing this drop across all customer types, or is it more pronounced in specific groups, such as new vs. returning customers?

Why it matters: Helps identify if the issue is widespread or localized to certain user segments. Expected answer: The drop is more significant among returning customers. Impact on approach: Would focus on retention strategies and understanding changes in long-term customer behavior.

• Considering potential technical issues, have there been any recent changes to the recommendation algorithm or the way vegetarian options are displayed on the platform?

Why it matters: Technical changes could inadvertently affect user choices and order values. Expected answer: Minor updates to the recommendation system were implemented recently. Impact on approach: Would investigate the impact of these changes on user behavior and order composition.

• I'm wondering about external market factors. Have there been any notable changes in competitor offerings or marketing campaigns targeting vegetarian customers?

Why it matters: Competitive pressures could be influencing customer choices and spending patterns. Expected answer: A major competitor launched an aggressive promotion for vegetarian meal kits. Impact on approach: Would analyze our market positioning and consider adjusting our value proposition or marketing strategy.