Metrics question

Amazon's Monthly Active Users (MAU) have been steadily increasing for the past six months, indicating robust user engagement. Nevertheless, the average sales per user has consistently declined during this period. What might be the reasons behind this trend?

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What this question tests

Root-cause / metrics diagnosis: can you separate a numerator (sales) from a denominator (MAU) problem and generate testable hypotheses.

How to approach it

  1. Restate the metric: average sales per user is declining while MAU rises, so the denominator is growing faster than the numerator.
  2. Hypothesis 1: mix shift, new users are lower-intent (browsing, not buying) than the existing base, diluting the average.
  3. Hypothesis 2: existing high-spend users are actually spending less, a real engagement problem masked by new-user growth.
  4. Hypothesis 3: external factors, like a promo period ending, pricing changes, or seasonality (e.g. post-holiday dip).
  5. Segment the data by user cohort (new vs returning, tenure) to isolate which hypothesis is driving the trend.
  6. Recommend the next step: cohort-level average sales trend, not just the blended average, before proposing a fix.

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