Why has the average order value for dinner deliveries on Zomato dropped by 15% in the past month?

Introduction

The recent 15% drop in average order value for dinner deliveries on Zomato is a concerning trend that requires immediate attention. To address this issue, I'll employ a systematic approach to identify, validate, and resolve the root cause while considering both short-term and long-term implications for our business.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might be seasonal factors at play. Have we seen similar drops in average order value during this time in previous years?

Why it matters: Helps distinguish between cyclical trends and unique issues. Expected answer: No significant seasonal pattern observed. Impact on approach: If seasonal, we'd focus on mitigating strategies; if not, we'd dig deeper into recent changes.

• 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: Identifies whether this is a widespread issue or specific to certain user types. Expected answer: The drop is more pronounced among frequent users. Impact on approach: If segmented, we'd tailor solutions to specific user groups; if uniform, we'd look at broader platform changes.

• Thinking about recent changes, have there been any significant updates to the app, pricing structure, or restaurant partnerships in the past month?

Why it matters: Helps pinpoint potential internal causes for the change. Expected answer: A new UI for the dinner menu was rolled out three weeks ago. Impact on approach: If recent changes occurred, we'd scrutinize their impact; if not, we'd explore external factors more thoroughly.

• Considering the competitive landscape, have there been any major moves by competitors or changes in the food delivery market recently?

Why it matters: Assesses whether external market forces are driving the change. Expected answer: A competitor launched an aggressive discount campaign two weeks ago. Impact on approach: If market changes are significant, we'd focus on competitive positioning; if not, we'd prioritize internal factors.