Introduction
The recent 20% decrease in average order value for Affirm's Shop Pay installments is a concerning trend that requires immediate attention. As we delve into this issue, we'll employ a systematic approach to identify, validate, and address the root cause while considering both short-term and long-term implications for the product and business.
Framework overview
This analysis follows a structured approach covering issue identification, hypothesis generation, validation, and solution development.
Step 1
Clarifying Questions (3 minutes)
Why it matters: Seasonal trends can significantly impact consumer behavior and spending patterns. Expected answer: No specific seasonal event correlates with the decrease. Impact on approach: If seasonal, we'd focus on adjusting for cyclical patterns; if not, we'd investigate other factors.
Why it matters: Different user segments may be responding differently to recent changes or market conditions. Expected answer: The decrease is more pronounced among new customers. Impact on approach: We'd focus on onboarding and first-time user experience if new customers are more affected.
Why it matters: Product or marketing changes could directly influence user behavior and order values. Expected answer: A recent update simplified the installment selection process. Impact on approach: We'd examine how this change might have affected user decision-making and order values.
Why it matters: External market forces can have a substantial impact on consumer behavior and willingness to use installment services. Expected answer: No major changes in competitor offerings, but there's been a slight economic downturn. Impact on approach: We'd consider how economic factors might be influencing consumer spending and risk tolerance.
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