Why has the average order value for Wemakeprice's fashion category declined by 10% compared to the previous quarter?

Introduction

The decline in average order value (AOV) for Wemakeprice's fashion category by 10% compared to the previous quarter is a significant issue that requires immediate attention. This analysis will systematically identify, validate, and address the root cause while considering both short-term and long-term implications for the business.

To tackle this problem, I'll follow a structured approach that covers issue identification, hypothesis generation, validation, and solution development. My goal is to provide a comprehensive analysis that not only addresses the immediate concern but also sets the stage for sustainable growth in the fashion category.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might be seasonal factors at play. Has this 10% decline been observed in previous years during the same quarter?

Why it matters: Seasonal patterns could explain the decline and inform our strategy. Expected answer: No, this decline is unusual for this time of year. Impact on approach: If seasonal, we'd focus on year-over-year comparisons; if not, we'd investigate recent changes.

• Considering user segments, I'm curious about the distribution of the decline. Is the 10% drop consistent across all customer segments, or is it more pronounced in specific groups?

Why it matters: Identifying affected segments helps pinpoint potential causes and tailor solutions. Expected answer: The decline is more significant among occasional shoppers. Impact on approach: We'd focus on understanding and addressing the needs of occasional shoppers.

• Thinking about recent changes, have there been any significant updates to the product, UI, or marketing strategies in the fashion category over the last quarter?

Why it matters: Recent changes could directly impact user behavior and AOV. Expected answer: A new recommendation algorithm was implemented last month. Impact on approach: We'd investigate the algorithm's impact on product discovery and purchasing decisions.

• Considering data integrity, has there been any change in how AOV is calculated or tracked in the system?

Why it matters: Ensures we're comparing apples to apples and not chasing a non-existent problem. Expected answer: No changes in AOV calculation or tracking. Impact on approach: Confirms the issue is real and not a data anomaly, allowing us to focus on external factors.