What is Cluster Analysis? And Why Use It?

2015-09-14 15_01_17-K-Means Clustering - Store. MicroStrategy 9

Why would you want to use cluster analysis on your retail sales data? Well, cluster analysis helps you identify non-independence in your data. Here is an example to help illustrate the point. Lets say we want to ask loads of teachers from many different schools what they think of their principal. If you ask two different teachers from two different schools, you will get two completely different answers that will be independent. But, if you ask two teachers from the same school, the answers will not be completely independent and could be very similar – but not EXACTLY the same.  Now if your job was to take the raw data and try to predict which school each teacher came from based on their answer – then you have an application of clustering.

2015-09-15 09_53_10-K-Means Clustering - Store - Original. MicroStrategy 9

The same thing can be applied to Walmart store performance for a supplier. You have some data points for a store like how long that store has been open, how many competitors it has located in its vicinity, what was your products sales performance for that store, some demographics for that area like unemployment and population, possibly even some historic weather data. Now you use a clustering algorithm to group your stores that are most closely related. This could be the first step in identifying under performing stores and why. It could give you a viable store list for a product test based on more than sales performance. It might help you further identify your product identity and who your actual customers are using enough demographic data. You might not find anything you didn’t already know. The important thing is that you are diving into your data to truly understand it on a level you never have before, and uncovering one of these nuggets could be millions of dollars difference to your company.

Once you’ve built your base analysis, and in our case we built our report that you see above, turned it into an in-memory cube, and then built a MicroStrategy dashboard on top of it – we can then explore slicing and dicing our data along the different data points to help identify if any of the metrics in our analysis are a key contributor to a cluster alignment. This way we can determine what factor affects sales the most. Could it be store age? or store square footage? or unemployment? Ethnic breakdown? What of these are driving markdowns?

The great thing about using this analysis as a MicroStrategy dashboard is that it is pretty easy to tweak to look for your top performing stores, and refreshing the data source is very easy. In fact, this report could be automated each week and emailed to you. There might even be an application to look for cluster changes and have something like that generate an alert so you only need to be bothered if anything changes.

Contact us today to discover how Vortisieze analytics can help you explore your own data science.

How #PredictiveAnalytics is Changing the Retail Industry | #CPG Take Note

This article is so important we are reprinting it in its entirety. As always, the link to the source is below.
Please contact us to see how predictive analytics can give you the competitive advantage over your brand’s competitors.

Ideally, a retailer’s customer data reflects the company’s success in reaching and nurturing its customers. Retailers built reports summarizing customer behavior using metrics such as conversion rate, average order value, recency of purchase and total amount spent in recent transactions. These measurements provided general insight into the behavioral tendencies of customers.

However, reports summarizing average behavior don’t provide the useful insights needed to determine how individual customers are likely to behave because general behavior tendencies are simply too broad. In order for retailers to create a meaningful dialogue with customers that honors the shopper’s preferred level and mode of engagement, it takes more than summarized reports, which is why customer intelligence and predictive analytics provide the opportunity to significantly change the retail marketing industry.

Customer intelligence is the practice of determining and delivering data-driven insights into past and predicted future customer behavior. To be effective, customer intelligence must combine raw transactional and behavioral data to generate derived measures. The process can best be described using the saying, “It’s not the data that is collected, it’s the data that is created.” Put into a predictive modeler’s perspective, the team not only collects a large amount of data, but also contextualizes that data by building derived attributes that provide additional insight into customer intent.

But how do data scientists and predictive modelers determine which derived attributes are relevant? Usually data scientists lack the deep domain expertise needed to clarify and prioritize their efforts. Therefore, a collaboration with domain experts is essential. This collaboration is like a three-legged stool. Each leg is critical to the stool remaining stable and fulfilling its intended purpose. When it comes to generating customer intelligence, the three legs of the stool are retail experts, data geeks and coders, and predictive modelers or data scientists.

Retail experts have domain expertise and can best frame the problem customer intelligence is aiming to solve. They suggest derived attributes that will provide value to both the brand and the company’s marketing campaign. Data geeks are needed to program these ideas and store them in a suitable database, which can often lead to greatly increased data storage requirements for the retailer. However, if the data can only be used to create solutions or make key marketing decisions if it’s properly stored and accessed. Inaccessible data means useless data and a wasted opportunity.

Predictive modelers and data scientists are then needed to use the stored data to build models that achieve those business objectives originally set by the retail expert. Predictive models find relationships between historic data and subsequent outcomes so that near-term and long-term customer behavior can be predicted. This leg of the stool aims to answer problems such as the likelihood of when a shopper will make their next purchase and what the value of that purchase will be. Sometimes, these relationships are so complex that only machine learning techniques will find them.

In a real world example, consider a retailer that would like to appropriately message high-valued, loyal shoppers who appear to be disengaging from the brand. A predictive model built from stored data could identify which shoppers are likely to purchase again with seven days, allowing the retailer to let them be the loyal customers they truly are. The predictive model can also show if certain shoppers are unlikely to purchase within seven days but have a high average order value. For these shoppers, the retailer could provide an incentive to bring the shoppers back to the brand. In either case, predicting what shoppers are likely to do is critical to understanding how best to complete the dialogue with them.

Moving forward, retailers will need to big data augment marketing decisions using insights gained from customer intelligence and predictive analytics. Each retailer’s data team must bring in elements from all aspects of the business, including retail experts, data geeks and predictive modelers. These key elements will set retailers up for success as we move forward into the era of big data.

Source: How Predictive Analytics is Changing the Retail Industry

#AnalyticsInRetail
#CategoryManagers
#CPG
#CPGMarketing
#NorthwestArkansas
#PredictiveAnalytics
#PredictiveAnalyticsRetail
#RetailingInNorthwestArkansas

 

#PredictiveAnalytics market will be worth $5.24 billion by 2018 illuminated by new report

Interesting introductory article announcing a predictive analytics report.

The report “Predictive Analytics Market [(Fraud, Risk, Marketing, Operations), Verticals (BFSI, Healthcare, Environment, Government, Retail, Energy, Manufacturing, Transportation, Travel, Telecom, Sports)]: Worldwide Market Forecasts and Analysis (2013 – 2018)”, defines and segments the predictive analytics software market into various sub-segments with in-depth analysis and forecasting of revenues. It also identifies drivers and restraints for this market with insights on trends, opportunities, and challenges.

Global predictive analytics market is driving on the emergence of massive amount of data deluge and innovative technology implementations. Business enterprises focus has changed from traditional Business Intelligence (BI) solutions to predictive analytics, because they have understood the importance of data and its analysis for the future estimation.

Traditional BI solutions are striving to sustain in this highly competitive world. The transformation of BI to predictive analytics gives new opportunities to the big players as well as new startups in this market.

This article highlights the how big data is outpacing traditional BI – both in ability to deliver actionable insights and the technological infrastructure to handle massive amounts of data, much of which is ad hoc and unstructured.

For a complimentary consultations about your analytics and insights needs contact us today.

Source:  Predictive analytics market will be worth $5.24 billion by 2018 illuminated by new report

#PredictiveAnalytics
#DataAndMarketing
#BigData
#CPG
#CPGMarketing

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ZuumSocial Releases Facebook Leaderboard – Most Engaged #CPG Brands on FB

Last month Zuum announced it will begin monthly ranking of the 25 most engaging brands on Facebook.  The rankings are limited to the top brands operating in the U.S.  This is how they summarized their criteria for selection:

The goal of this is to capture the Facebook content and community traits of the top brands operating in the US. So we’ve put several constraints on which brands are selected. Brands must be operating in the US, we’ll use the US page unless there’s only a global page, brands must be consumer products vs B2B, and we’re excluding technology and entertainment brands, as our goal is to better understand how typical consumer products work on social media, and both of those categories tend to skew towards extremely high engagement due to the product type.

For July and August Monster Energy Drinks captured the top.  This month Zuum has released the rankings for a specific category CPG Dips and Dressings.  Here is the lead-in to their rankings:

CPG is a very broad business category, with sub-categories like soft drinks having brands with some of the larger social media fan counts anywhere. In our July ranking of the 25 most engaging brands on Facebook, the three top brands are CPG.

Of course, the CPG umbrella includes many smaller brands, with more niche or regional appeal. One subcategory in particular is dips and dressings. Below is the Facebook Leaderboard for some of the top dips and spreads brands in the US for the month of July.

You can see that the fan counts, while not what you’ll see from Pepsi or Coke, are still substantial. Posting volume is a little light in this category, with even the top brand, Sabra, only posting about 1 time per day.

Once the novelty of these new rankings are gone what value does this have to a CPG category manager or sales analyst?  “Well – Nancy . . .” – if your analytics cannot lay this new, unstructured data alongside your retailer supplied POS and inventory data – there is no value outside of water cooler talk.

This is one of the major limitations of rigid, outdated, DSRs built using data warehouse technology.  Rigid in the sense that to add new data feeds takes months – sometimes years.  The loading of the data – including current feeds – is long and cumbersome.  From a technological point-of-view these simply will break under the weight of increasing amount and type of data.

If you want to use these new – and exciting – data points (social media, weather, and et. al.) to draw insights and correlations to sales – then the only technology that can pull this off – today – is Big Data.

That’s what the buzz is about.  Will your brand be buzzing going forward?

We are Vortisieze.

Contact us today for a complimentary consultation on your BI strategy.

 

Sources:

Facebook July Leaderboard for CPG Dips and Dressings

http://blogs.imediaconnection.com/blog/2015/08/17/facebook-july-leaderboard-for-cpg-dips-and-dressings/

 

Ranking 25 of the most engaging brands on Facebook

http://zuumsocial.com/ranking-25-of-the-most-engaging-brands-on-facebook/

 

July Ranking of 25 Most Engaging Brands on Facebook

http://zuumsocial.com/july-ranking-of-25-most-engaging-brands-on-facebook/

 

#CPG

#Business Intelligence

#BigData

#AnalyticsInRetail

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#PredictiveAnalytics is Really ‘What is the #BuyersIntent’?. Lessons for #CPGMarketing.

Big data and analytics have become the Holy Grail of marketing speak. Being more data driven has definitely become hip, but it’s not hype. Brands and marketers are using data to track customer journeys, to target and capture new customers, and to retain existing ones. Today’s consumers have come to expect a lot more from brands than simply the ability to make a purchase from them. They are looking for greater levels of interaction, better products, and faster and more responsive services. Big data can help brands deliver on these customer expectations. How? By offering rich insights that can enable brands to reach the right people with the right message for maximum impact.

So starts this article in Forbes describing how big data can help CPG companies learn how to reach new (and existing) customers by learning to use predictive analytics to gauge the buyer’s intent.

Existing DSRs, using POS and inventory data, can only tell you what the consumer has done in the past.   It’s exponentially easier to see what buyers have done (in the past) than to predict what buyers will do in the future. Predicting is what we all want to be doing—so that we can anticipate what consumers want—perhaps even before they realize they want it themselves! This is where intent data comes in.

What Is Intent Data?

People leave behind crumbs of behavioral information every time they search the internet. Relevant bits of this info can be pieced together to gain insight into the intent of a buyer. This is intent data. Simply put, it’s information that tells you when a customer is ready to make a purchase. Now, intent-based marketing is nothing new. Think about cookie-based ads, Web analytics or marketing automation—we’ve been using these tools in marketing and ad targeting for years.

Are We Fully-Equipped To Leverage Intent Data?

The right use of intent data can definitely take personalized marketing to a whole new level. It can open windows to the buyer’s mind in a way we’ve never seen before. But the question remains, are we there yet in terms of measuring buyer intent?

recent study by Forrester found that 78% of surveyed marketers believe using intent data can lead to better ad relevancy, and 67% think it could help them gain a competitive edge. However, inaccurate data (57%), inability to combine first and third-party data (49%), and not knowing how to feed intent data into targeting technology (54%) were cited as some of the biggest roadblocks of using intent data to reveal desired insights. Plus, the basic shortcomings, such as lack of proper technologies and limited human resources, indicate that marketers may not be fully equipped to benefit from intent-based targeting just yet.

I think we need to first overcome the basic challenges of capturing and making sense of the right data before we can use it to understand buyer intent—which for now, remains more or less a nebulous thing.

What is the Bottom Line for CPG Companies and CPG Marketers?

Using all the data that is available to you – from retailer supplied POS/Inventory data to other unstructured and “ad-hoc” data that can come from a category manager’s spreadsheet or from survey data from the internet. The trick is to have the right technology to bring in disparate data and often unstructured data to gain insights right now.

If you are tired of your old DSR company telling you it will be ‘next year’ before they can bring in your “unconventional data” – then you need another BI company. One that is built off of modern big data technology that allows you to incorporate new and ‘unstructured’ data in days not weeks, not ‘next year’ to gain insights into what the consumer is thinking now – not a year from now.

For a complementary BI consultation contact us today.

 

Source:      Can We Really Use Big Data To Measure Buyer Intent?

 

#PredictiveAnalytics
#BuyersIntent
#CPGMarketing
#CPG

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#BigData and the 2016 Presidential Election #PredictiveAnalytics

What Nate Silver did for President Obama in the 2008 election cycle Deep Root Analytics, a media analytics company formed in response to the 2012 Republican loss in the presidential election, is working to do for several Republican candidates in this election cycle.

Deep Root Analytics partners with data-blending and advanced-analytics company Alteryx to merge voter file information, set-top box data and commercial data to optimize audience targeting and TV ad-space buying.

While this is very interesting to observe ultimately we in the retail space must learn from the lessons that these, and other big data exercises, provide.  As consumers move from one retail channel to another (actually many) channel using all the data available is paramount.  No longer will solely relying on the POS/Inventory data your retailer provides you be enough.

Wondering how to make this all come together for you?  Contact us today for a complimentary consultation.  And enjoy this election as you watch others use big data to move their candidate (brand) forward in the voter’s (consumer) eye.

 

Source:  How Data and Programmatic TV Will Dominate the 2016 Presidential Campaign

#DataForAnalytics

#DataAnalyticsTechnology

#PredictiveAnalytics

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#DataAnalyticsTechnology: Turn insight into action with #PredictiveAnalytics

 

Good Saturday morning – hope you are enjoying your cup of coffee.  Now enjoy a -not too bad- geeky article on predictive analytics and how to make use of it.

See you again next week at the office.

 

Source: Turn insight into action with predictive analytics

 

 

#DataAnalyticsTechnology

#PredictiveAnalytics

#BigData

 

 

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#DataForAnalytics: #PredictiveAnalytics tools point to better business actions

From recommending additional purchases based on the items that customers place in online shopping carts to pinpointing hospital patients who have a greater risk of readmission, the use of predictive analytics tools and techniques is enabling organizations to tap their collections of data to predict future business outcomes — if the process is managed properly.

Using predictive analytics tools lets organizations look ahead in an effort to optimize business strategies. But there has to be a purpose to the analytics efforts, and a solid plan behind them.

Predictive analytics has become an increasingly hot topic in analytics circles as more people realize that predictive modeling of customer behavior and business scenarios is “the big way to get big value out of data,” said Mike Gualtieri, an analyst at Forrester Research Inc. As a result, predictive analytics deployments are gaining momentum, according to Gualtieri, who said that he has seen an increase in adoption levels from about 20% in 2012 to “the mid- to high-30% range” now.

That’s still relatively low — which creates even bigger potential business benefits for organizations that have invested in predictive analytics software. If a company’s competitors aren’t doing predictive analytics, it has “a great opportunity to get ahead,” Gualtieri said.

Predictive analytics projects can also provide those benefits across various industries, said Eric King, president and founder of The Modeling Agency LLC, an analytics consulting and training services firm based in Pittsburgh. “Everyone is overwhelmed with data and starving for information,” King noted.

But that doesn’t mean it’s just a matter of rolling out the technology and letting analytics teams play around with data. When predictive analytics is done well, the business benefits can be substantial — but there are “some mainly strategic pitfalls” to watch out for, King said. “Many companies are doing analytics to do analytics, and they aren’t pursuing analytics that are measurable, purposeful, accountable and understandable by leadership.”

Data scientists don’t know it all

Plan ahead on predictive analytics

For a free consultation on your business intelligence strategy contact us.

 

 

Source: Predictive analytics tools point to better business actions

 

 

#DataForAnalytics

#PredictiveAnalytics

#BigData