The Problem
Cazoo was on a mission to become profitable after a few years of scaling massively. This has meant cutbacks and a reduction in the workforce. How might we help Cazoo fulfil more orders this year without increasing cost base in order to drive profitability?
The Challenge
Business objective:
Maximise cash contribution per handover.
Key result:
Increase average cash contribution per handover by £11.50+
My Role
Leading problem discovery, ideation and solution delivery. Introducing an experimental mindset shift to the team.
Context
The proposition
The website allows customer to search, browse and find used cars. You can, get a car delivered/collected, sell your car to Cazoo and arrange pick up or drop-off and pay with finance or buy outright.
Handover
Cazoo provides a unique handover experience for customers who choose to get their car delivered. It arrives on a single car transporter and is shown and explained to the customer by a deliver specialist (DS). The DS uses a handover app to check the vehicle is as expected and suitable for the customer
Choosing the right opportunities
We brainstormed different ideas as a team and chose the one we had the most confidence in and agreed it with stakeholders to ensure it aligned commercially. Variable delivery pricing was the clear winner.
Solution discovery
This was a big cross functional initiative across the business involving many teams. I ran multiple workshops to align teams with what was required and where there were gaps on the end to end customer journey. We met weekly to discuss progress.
User research
I prototyped different ideas and chose the most feasible to test within the constraints we had. We needed data to better inform our direction.
Research results
Price transparency
There were no issues on the visibility of the price however there were customers interested in why it was that price.
How might we be transparent on our delivery pricing?
Delivery price too high
The majority stated the price was too high. We used a real address which displayed a £259 price
Collection VS Delivery
Most would choose collection over delivery due to price. Currently we only surface the nearest CCC to the customer in the handover section at checkout.
We made some tweaks before launch. Due to looming deadlines the biggest bet was tackling the price transparency request.
Impact
In April we launched variable pricing to the East / North East of England only which led to revenue of 186k with an average of £151 per order (previously £149).
In May we pushed to launch across the whole country which led to a total delivery revenue of 213k with an average of £171 per order.
This means we made £20 more per order.
Further research
After the success of variable pricing we continued to discuss new ideas. There was a lot of interest from wider stakeholders and we needed to look at finding ways to experiment quickly.
We did more user research and found further opportunities where we could improve our offering. There were 3 themes.
Customers are willing to pay more for convenience
Price and nearest collection point are most important
There is an expectation around the length of the delivery slot of between 1-4 hours
Being experimental
The team needed to evolve in order to try different ideas. I worked closely with engineering and product to spearhead an experimental framework.
Experiment 1
Results
Over a 2 week period only 6% of users switched to a different fulfilment method. There was no detrimental impact on delivery and pickup slots selection volume and tech effort to maintain so we kept the option in.
