Why has Gorillas's average order value dropped by 15% in Berlin over the past month?

Introduction

The recent 15% drop in Gorillas's average order value (AOV) in Berlin over the past month 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 understanding 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 Berlin experienced any significant weather changes or events in the past month that could affect shopping behavior?

Why it matters: Seasonal changes can greatly impact grocery shopping habits. Expected answer: No major weather events or seasonal changes. Impact on approach: If confirmed, we'll focus more on internal factors.

• Considering user segments, I'm curious about any shifts in our customer base. Have we seen any changes in the demographics of our users in Berlin recently?

Why it matters: Different user groups may have varying order values. Expected answer: No significant demographic shifts. Impact on approach: If there are changes, we'll need to analyze segment-specific data.

• Regarding recent changes, I'm wondering if we've made any updates to our product or marketing strategies. Have there been any significant changes to our app, pricing, or promotions in the last 1-2 months?

Why it matters: Product or marketing changes can directly impact AOV. Expected answer: Some minor updates, but nothing major. Impact on approach: If there have been changes, we'll need to closely examine their impact.

• Thinking about competition, I'm curious about market dynamics. Have any of our competitors in Berlin launched new services or aggressive promotions recently?

Why it matters: Competitive pressures can affect customer behavior and AOV. Expected answer: Some standard competitive activity, but nothing unusual. Impact on approach: If there's increased competition, we'll need to factor this into our analysis.

• Considering data integrity, I want to ensure we're working with accurate information. Has there been any change in how we calculate or measure AOV in the past month?

Why it matters: Changes in measurement could lead to false conclusions. Expected answer: No changes in AOV calculation or measurement. Impact on approach: If there have been changes, we'll need to recalibrate our analysis.