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Pricing
Product Management Root Cause Analysis Question: Investigating declining average order value for Valentine's Day bouquets

Why has the average order value for Bloom & Wild's Valentine's Day bouquets decreased compared to last year's performance?

Data Analysis Problem Solving Strategic Thinking E-commerce Flower Delivery Gift Industry
E-Commerce Root Cause Analysis Pricing Strategy Customer Behavior Flower Delivery

Introduction

The decline in average order value (AOV) for Bloom & Wild's Valentine's Day bouquets compared to last year's performance is a critical issue that requires thorough analysis. I'll approach this problem systematically, examining various factors that could contribute to this decrease in AOV. My analysis will cover issue identification, hypothesis generation, validation, and solution development.

Framework overview

This analysis follows a structured approach covering issue identification, hypothesis generation, validation, and solution development.

Step 1

Clarifying Questions (3 minutes)

  • Looking at the timing, I'm thinking there might be a shift in customer preferences. Have you noticed any changes in the types of bouquets customers are selecting this year compared to last?

Why it matters: Understanding changes in customer preferences can help identify if the product mix is still meeting market demands. Expected answer: There's been a trend towards smaller, more affordable arrangements. Impact on approach: If confirmed, we'd need to examine our product lineup and pricing strategy.

  • Considering economic factors, I'm wondering about the overall spending patterns. Has there been any noticeable change in customer behavior across other product categories or holidays?

Why it matters: This helps determine if the issue is specific to Valentine's Day or part of a broader trend. Expected answer: Similar trends have been observed in other holiday-specific products. Impact on approach: If true, we'd need to look at macro-economic factors and overall pricing strategy.

  • Thinking about our marketing efforts, have there been any significant changes in our promotional strategies or discounting compared to last year?

Why it matters: Changes in marketing can directly impact AOV. Expected answer: We've increased our promotional offers to drive volume. Impact on approach: If confirmed, we'd need to analyze the balance between volume and AOV.

  • Considering potential technical issues, has there been any change in how AOV is calculated or reported in our systems?

Why it matters: Ensures we're comparing apples to apples and rules out data anomalies. Expected answer: No changes in calculation methods or reporting systems. Impact on approach: If there were changes, we'd need to recalculate last year's data for accurate comparison.

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