Why has the average order value for Delivery Hero's restaurant deliveries dropped 15% in the past month?

Introduction

The recent 15% drop in average order value (AOV) for Delivery Hero's restaurant deliveries is a concerning trend that requires immediate attention. As we analyze this issue, we'll follow a systematic approach to identify, validate, and address the root cause while considering both short-term and long-term implications for the business.

I'll begin by clarifying key details, rule out external factors, and then dive deep into our product ecosystem and user journey. We'll break down the metric, gather relevant data, form hypotheses, and conduct a thorough root cause analysis. Finally, we'll develop a comprehensive plan to validate our findings and implement solutions.

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 weather patterns or local events in the past month?

Why it matters: Seasonal changes can greatly impact ordering behavior. Expected answer: No significant seasonal changes. Impact on approach: If confirmed, we'll focus more on internal factors.

• Considering user segments, I'm curious about the distribution of this drop. Is the 15% decrease uniform across all user segments, or are certain groups more affected?

Why it matters: This helps us identify if it's a systemic issue or specific to certain user groups. Expected answer: The decrease is more pronounced in certain segments. Impact on approach: We'll prioritize investigating those specific segments.

• Regarding recent changes, have there been any significant updates to the app, pricing structure, or restaurant partnerships in the last 1-2 months?

Why it matters: Recent changes could directly impact user behavior and AOV. Expected answer: A few minor updates, but nothing major. Impact on approach: We'll need to scrutinize even minor changes for potential impact.

• Thinking about competitive landscape, has there been any notable activity from competitors recently, such as aggressive promotions or expansion?

Why it matters: Competitive actions could be drawing higher-value orders away. Expected answer: Some standard competitive activity, but nothing out of the ordinary. Impact on approach: We'll consider competitive factors but not as a primary focus.