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AOV is down - WHY?

What are reasons for AOV going down? How can I disaggregate the problem in an issue tree?

What are reasons for AOV going down? How can I disaggregate the problem in an issue tree?

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Book a coaching with Emily

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Hi there,

Some thoughts for your reference here on how to approach this question.

1. Industry problem vs. client specific problem?

2. Break down AOV. Depending on the industry, the breakdown could be different. Using retial for example, you could drill down to 3 factors: (a) # of items in an order, (b) average price per item , and (c) product mix in a typical order e.g. is the basket skewed towards more lower price items than high price items

3. For each factor you identified as problemetic, you can further understand what is happening on both the supply side and the deman side (customers). For example (using retail again), supply side you can probe for stock availability, promo/discount campaigns, assortment & display, branding, service, substitution/competition etc. On the demand side you can probe for customer behavior/preference changes, customer pain points, etc. Might sound a long list here, but you should pick and choose depending on which factor you identified in step 2.

Hope it helps.

Emily

Hi there,

Some thoughts for your reference here on how to approach this question.

1. Industry problem vs. client specific problem?

2. Break down AOV. Depending on the industry, the breakdown could be different. Using retial for example, you could drill down to 3 factors: (a) # of items in an order, (b) average price per item , and (c) product mix in a typical order e.g. is the basket skewed towards more lower price items than high price items

3. For each factor you identified as problemetic, you can further understand what is happening on both the supply side and the deman side (customers). For example (using retail again), supply side you can probe for stock availability, promo/discount campaigns, assortment & display, branding, service, substitution/competition etc. On the demand side you can probe for customer behavior/preference changes, customer pain points, etc. Might sound a long list here, but you should pick and choose depending on which factor you identified in step 2.

Hope it helps.

Emily

(edited)

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The first level of your issue tree can be industry-wide vs client issue, in order to understand if it's a problem encountered by all the players in the market or only by your client. Then you can deep dive prices, customer preference, product shift, ...

Best,
Antonello

The first level of your issue tree can be industry-wide vs client issue, in order to understand if it's a problem encountered by all the players in the market or only by your client. Then you can deep dive prices, customer preference, product shift, ...

Best,
Antonello