Market Basket Analysis Engagement Summary
We worked with a leading European specialty foods retailer, to build a market basket analysis solution using their existing BI platform. With the help of market basket analysis, the specialty foods retailer was able to increase the effectiveness of their marketing campaigns and optimize the layout of their stores to increase sales & profitability across its retail outlets.
How Can Retailers Benefit from Market Basket Analysis?
Customer acquisition, as we know, is a crucial factor that determines the success or failure of a company in today’s highly fragmented retail landscape. Due to many such factors that curtail growth, the retail sector is fraught with challenges ranging from data management to technology adoption which has made it necessary for businesses to find a solution that can address the specific requirements of its customers and enhance marketing effectiveness.
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To thrive in such a scenario, retailers must gain a better understanding of customer preferences and purchase patterns to offer better services and drive retention. Advanced analytics tools and data modeling techniques can help companies do so by helping them analyze customer data sets in real-time. Market basket analysis is one such technique that offers unprecedented insights into large datasets including- purchase history, information on product categories, and frequency of purchase. Using market basket analysis retailers can uncover relationships between different product categories and build targeted campaigns to generate new revenue.
The client- a specialty foods retailer based out of Denmark had invested heavily in CRM tools and customer data management techniques, but the deployed system failed to analyze data and extract important information from their vast customer and product databases. Though they were aware of the fact that details on customer preferences and purchase patterns could be obtained from a detailed analysis of transactional datasets that exist within the POS (Point of Sale) systems, they lacked the analytics capabilities to decipher data sets and draw conclusive insights.
This is when they approached Quantzig and were looking at leveraging market basket analysis to drive marketing effectiveness and campaign success rates. The specialty foods retailer needed help with collecting and analyzing diverse data sets to extract actionable information from customer purchase patterns and disseminate those insights across the organization to enable C-suite executives and marketers to make the right decisions.
To sustain a competitive edge in today’s retail sector is not just challenging but close to impossible for new market entrants owing to the developments and technological advancements within the industry. In such a scenario, it’s crucial to up your game using analytics. Request a FREE demo to learn how market basket analysis can help.
Based on the clients’ existing tools and data management techniques, our market basket analysis experts developed a customized market basket analysis based solution to address their challenges and identify new areas to drive growth.
We adopted a three-step approach that comprised of the following phases:
Step 1: Data Discovery and Integration
To identify associations between purchases, its first essential for retailers to analyze data sets by collating data sets obtained from various sources. The first phase of this market basket analysis engagement revolved around data discovery and integration to identify correlations by analyzing data sets.
Step 2: Data Filtering
The second phase of this market basket analysis engagement revolved around cleansing and filtering customer data sets using advanced algorithms and data filtering techniques.
Step 3: Creation of an Association Model Using Market Basket Analysis
The final phase of this market basket analysis study focused on the creation of an association model and market basket analysis dashboard for the real-time data discovery and generation of recommendations on product bundling.
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Leveraging market basket analysis helped the client to make faster and well-informed decisions by empowering them to:
- Discover and analyze large volumes of POS data
- Enrich data sets from disparate sources into a single, unified view
- Deep dive into product affinities within a market basket
- Deploy a market basket analysis dashboard to quickly identify product affinities across the assortment
- Achieve a 3.5x increase in ROAS