Data is no good if you can’t get it quickly enough and act quickly enough on it. Its all about getting the data fast and acting on it fast
– Andrew Pole
Predictive analytics solves many differnt problems in a many facets of business. The New York Times published an article in February about the retail chain, Target. Target knew that if they could predict buying patterns in a certain group of consumers, they could influence those consumers purchases. Target was smart, they knew exactly who they wanted to go after.
Andrew Pole, a statistician working for Target, created a pregnancy-prediction model that was able to track spending habits and predict when a woman is pregnant. Pole said that, “We knew that if we could identify them in their second trimester, there’s a good chance we could capture them for years. As soon as we get them buying diapers from us, they’re going to start buying everything else too. If you’re rushing through the store, looking for bottles, and you pass orange juice, you’ll grab a carton. Oh, and there’s that new DVD I want. Soon, you’ll be buying cereal and paper towels from us, and keep coming back.” (more…)
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Predictive Analytics in Retail
Diapers, Beer, and Data Science in Retail
When asked for white papers or case studies on how predictive analytics works, I often give a few stories on how different industries use analytics to find patterns in their data and then apply that knowledge to their existing data to predict what future trends are going to happen. Learn about how we applied predictive analytics to politics.
I get asked specifically about legends that roam the retail world: the study that found that milk is the most purchased item so it is always in the back of the store, making you walk by everything thing else they have before you get there, the fact that women’s shoes are always on the way to men’s clothes, and the fact that bananas are at the front of stores because they are found to be an impulse buy. The one that seems to get the most requests though is the one that men who buy diapers for their kids are most likely to have beer also in their carts.
It doesn’t seem that far-fetched. (more…)
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