How can predictive analytics help retailers weather the economic storm?

In this blog post I’m going to suggest  some ways in which predictive analytics can help retailers weather the economic storm they’re currently facing. The UK’s battered retail sector has been enduring an ongoing perfect storm following the financial crisis of 2007 / 2008.  The government would like us to believe that things are much better now.  The truth is that economic recovery has been slow and patchy at best. Think of Tesco’s recent problems, declining sales from all of the UK’s major supermarkets and repeated profit warning from the likes of Asos to name but a few. We’d be naive […]

What do your customers care about most? Using key driver analysis to find out.

After basic significance tests, T-tests, Z-tests and so on, key drivers analysis (KDA) is probably the second most popular statistically-based technique in market research. Given an outcome of interest a KDA gives us a measure of the relative importance of a set of attributes (potential drivers).Typical outcomes of interest in research are: Satisfaction – customer, employee etc. Purchase intent – how likely a customer is to make a purchase How likely a respondent is to recommend a product or service (sometimes known as a Net Promoter Score) Intent to switch or cancel This isn’t an exhaustive list and outcomes can be stated or observed (through other data sources like transactional databases) where […]

Assessing the value of your customers

Moving beyond RFM analysis to create truly data-driven customer segments RFM stands for recency, frequency, monetary value and is a method for calculating or assessing overall customer value.  Its most common use is in direct marketing or database marketing and it is particularly heavily used by retailers and charities. RFM analysis is predicated on the idea that your most valuable customers are those who spent most recently, who spend most often (frequency) and who spend the most (monetary value). Most organisations hold this kind of data about their customers which makes RFM analysis relatively accessible and easy to do. Typically […]

How real is real-time offline advertising?

Real time advertising is a hot topic right now. Over the last few months I’ve read a growing number of articles about how advertisers will soon be able to target their customers in real-time. Of course real-time advertising is nothing new online, what’s new here is the possibility of being able to do it in our offline lives as well. Just this last week Tesco was in the news. It has been testing the use of facial recognition systems to target interactive poster advertising based on gender. It seems we’re not a million miles away from the kind of personally […]