Rising order cancellations

The prompt

An online grocery store notices its order cancellation rate has risen from 4% to 7% over the last month. The operations head wants to know why and what to do about it. Walk through your approach.

Extra context you can assume

• Orders can be cancelled by the customer, by the store (out of stock) or by the delivery partner.
• The store delivers in five cities from local warehouses.
• A new delivery partner was onboarded in two of the cities last month.

A strong answer usually covers

• Define cancellation rate and who cancelled (customer / store / partner).
• Break down by city, warehouse, time of day, category and delivery partner.
• Separate stock-outs from delivery delays from customer behaviour.
• Quantify the revenue and customer-experience impact.
• Propose actions with owners and a way to measure improvement.

This scenario is fictional and made up for practice.