Why has the average order value for electronics on Sky.Garden dropped by 15% in the last month?

Introduction

The recent 15% drop in average order value (AOV) for electronics on Sky.Garden over the past month 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 business.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might be a seasonal component. Has this drop coincided with any particular events or seasons that typically affect electronics sales?

Why it matters: Seasonal trends can significantly impact purchasing behavior. Expected answer: No significant seasonal events during this period. Impact on approach: If seasonal, we'd focus on year-over-year comparisons and cyclical strategies.

• Considering user segments, I'm curious if this drop is uniform across all customer types. Have you noticed any differences in AOV changes between new and returning customers?

Why it matters: Different user segments may be responding differently to recent changes or market conditions. Expected answer: The drop is more pronounced among returning customers. Impact on approach: We'd investigate factors specifically affecting loyal customers' purchasing decisions.

• Thinking about recent changes, have there been any updates to the product catalog, pricing strategy, or promotional activities in the last 1-2 months?

Why it matters: Internal changes could directly impact AOV. Expected answer: A new pricing algorithm was implemented last month. Impact on approach: We'd focus on analyzing the impact of the new pricing strategy on customer behavior.

• Regarding data integrity, has there been any change in how AOV is calculated or any known issues with the data collection process?

Why it matters: Ensures we're working with accurate data and not chasing a non-existent problem. Expected answer: No changes in calculation method or known data issues. Impact on approach: If data issues are present, we'd prioritize fixing those before further analysis.