If you spend time shopping on Amazon or other web retailers, you know how powerful it is when a site delivers the right product recommendation at the right moment. Through complex data analysis, these companies are able to predict exactly what you’ll want to see next, based in large part on the products that similar customers have purchased in the past.
Unfortunately, many ecommerce brands do not have the tools to perform similar calculations in-house. Because these brands can only guess which products they should recommend to their customers at any given moment, they risk missing out on valuable incremental sales on a daily basis.
In order to help online retailers reach their full potential, we built the Market Basket Analysis app for the Domo business cloud. Using this software, ecommerce brands of all sizes can harness data science to better understand customer behavior and offer more precise product recommendations.
With every purchase, Market Basket Analysis tells you which other products your customers will be interested in next.
Market Basket Analysis uses data science modeling to draw relationships between different groups of items that your customers buy, based on your historical customer purchase data. For instance, the app could tell you that people who purchase soda and popcorn frequently add napkins, paper towels, and chocolate chip cookies to their online shopping cart. The app could also tell you that that same group of customers is unlikely to purchase pretzels or potato chips.
Inside the app, this information is presented in rich data visualizations that track the key metrics needed for a successful market basket analysis: support (the percentage of total transactions that include a given group of products), confidence (the probability that a purchase including Item A will also include Item B), and lift (a formula that hones in on the significance of the relationship between two products).
Give your customers exactly what they want, before they even know they want it.
Market Basket Analysis gives online retailers the information they need to make smarter marketing choices, increase sales, and improve the customer experience.
For example, if you know that people who buy a certain brand of paper towels frequently purchase a certain brand of dish soap, you could send out an email blast advertising the two products together. Or, you could try to upsell someone who bought paper towels on a more expensive dish soap before they purchase the brand they usually buy.
The app is particularly adept at helping retailers make on-site product recommendations similar to Amazon’s “customers who bought this item also bought” feature. Every time a customer adds a product to their cart, you can attempt to drive incremental sales by showing them a list of products you can be confident they’ll want to see next. Really, there is no end to the number of ways you can use Market Basket Analysis to create a more focused, more effective promotional strategy. In fact, the app opens up new opportunities every time you use it. With each additional purchase, you acquire more data on how your customers shop, and your customers become more loyal to a retailer that helped them find exactly what they were looking for.
Interested in learning more? Read more about Domo’s Appstore here.