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Product Management Root Cause Analysis Question: Investigating declining average order value for food delivery platform

Why has the average order value for Deliveroo's restaurant partners in London decreased by 15% over the past month?

Data Analysis Problem Solving Strategic Thinking Food Delivery E-commerce Hospitality
Food Delivery Root Cause Analysis User Behavior Pricing Strategy Market Dynamics

Introduction

The recent 15% decrease in average order value (AOV) for Deliveroo's London restaurant partners is a concerning trend that requires immediate attention. This analysis will systematically investigate potential root causes, generate data-driven hypotheses, and propose actionable solutions to address the issue. We'll examine both internal and external factors, considering the complex ecosystem of food delivery and the unique challenges of the London market.

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 seasonal factors at play. Has this decrease coincided with any particular events or changes in weather patterns in London?

Why it matters: Seasonal trends can significantly impact dining habits and order values. Expected answer: Information about recent weather patterns or events. Impact on approach: If seasonal, we'd focus on strategies to mitigate seasonal fluctuations.

  • Considering potential changes in user behavior, have you noticed any shifts in order frequency or customer demographics during this period?

Why it matters: Changes in user composition or behavior could explain the AOV decrease. Expected answer: Data on order frequency and customer demographics. Impact on approach: If user behavior has changed, we'd need to investigate why and how to adapt.

  • Thinking about recent product updates, have there been any significant changes to the Deliveroo platform or partner offerings in the past month?

Why it matters: Product changes can directly impact user behavior and order values. Expected answer: Information about recent platform or menu updates. Impact on approach: If product-related, we'd need to assess the impact of these changes and potentially roll back or modify them.

  • Considering market dynamics, has there been any notable increase in competition or promotional activity from other food delivery services in London recently?

Why it matters: Increased competition could be driving down prices or fragmenting the market. Expected answer: Information about competitor activities and market share. Impact on approach: If competition-driven, we'd need to focus on differentiation and value proposition strategies.

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