Market Basket Analysis 6.15.15
- 1. . MARKET BASKET ANALYSIS IMPROVETHE CUSTOMER EXPERIENCEAND PROFITS! QUESTIONS: These are but a sample of the overall questions that apply to each of the separate analysis Which Products or Categories show up the most times in Market Basket? Which Products or Categories create the most frequency of visits? Which Products or Categories create the most sales by different time periods? Which Products or Categories deliver the most GM$ Which Products or Categories build the strongest Loyalty? Are there multiple types of Loyalty happening within different products? Identity of the Customers for these Categories, frequency, sales, profit? Which Categories are bought by your best and most profitable Customers? Pricing on categories that generate the highest market basket? Changes by Category and related items when sales are in place? Marketing effects when a category is promoted? ELEMENTS TO BE CROSS ANALYZED: Category, Class, Sub-Class with the other Products in the Basket Number of Transactions Avg. Sales per Transaction Avg. GM$ per Transaction Avg. Marketing $ spent on Cat. Categories in largest Basket vs. smaller Basket units and sales Frequency of those Categories Units per transaction Differencesin Basket when key product is marketed or promoted vs. not. BRAND/VENDOR ANALYSIS: Is one brand leading the charge in a specific category?Brands not adding anything but a few sales? What relationships do you need to address with your vendorsto improve overall performance? Once specific product types are identified, which brands are most likely to be in the basket? What are the brands that are 2nd, 3rd, & 4th in that transaction? Time Analysis on Vendors is there specific times that these brands performbest due to such elements as Holidays, Weekends, Quarters, etc. TIME PERIOD: Product Categories, Class, Sub-Class these answers may change by time periods. The answers to these questions concerning time can dramatically influence product selection, inventory levels, marketing, pricing, labor and overall profit. Year Quarter Month Week Day Hour
- 2. PRICING ANALYSIS What is the average priceof a category, class or sub-class going out the door? Can changes in pricing lead to frequency, more sales, higher GM$? MARKETING: Which channels of marketing affect specific products and increaseoverall performance of specific Products. Analysis of categories when specific marketing channelsare used. Radio, Billboards, E- mail as examples. CUSTOMER DEMOGRAPHICS IN THE DIFFERENTMARKETBASKET ANALYSIS Location in USA Location in State Location in City Age Gender Financial Race Housing- Own vs. Rent CHANNEL DIFFERENCES AND COMBINATIONS How do Product associations by baskets differ by Channel? Time of shopping Similar products in basket Pricing differences Can we learn what level of involvement came fromthe web to shop the store? ADDITIONAL QUESTIONS ONCE ANALYSIS IS COMPLETED What are the value propositions of the top products? o How can the answers be used for additional products Who are the competitors for those products? o What is the opportunity or risk? What Marketing elements to change, add, or reduce by products and time. Inventory adjustments by location, time Location in store and online for products Allocation of space in store and E-Commerce for Products and Categories SUGGESTED TESTS In a Brick-N-Mortar situation, take the top 50 doors and do a complete, full scale analysis on a product category. Understand the elements that drivethe highest volume doors. Test the Top 50 Learning on at set of Middle 50 doors. See if those learnings can be applied to be useful in another scenario. Use different types of marketing in similar locations to see how the Market Basket is affected. Test new and old marketing channels using specific products that may lead to better performance.