Market Basket Analysis Applications to Fuel Growth in Retail

Market Basket Analysis (MBA) is an essential differentiator for modern retail players looking to be at the cutting-edge of the consumer satisfaction journey's innovation trends. It allows for data-driven decisions through learning and understanding consumers and their behaviors and habits. MBA helps organizations more carefully address ever-changing consumer needs and demands—down to the individual level.

However, MBA is not a silver bullet in itself. It is a solid foundation that allows for multiple specific and practical applications within the retail ecosystem, both in-store and online. Outcomes of a continuous MBA cycle are used as the backbone for implementation and improvement, such as:

• Cross- and up-selling: MBA allows a retailer to understand the correlation between the specific groups of products. Retailers can perform trials to determine the effectiveness of one-time promotions as opposed to repeat offers.  
• Assortment management: MBA helps retailers understand consumer tendencies and sympathies at scale. This perspective allows for better assortment management at the helicopter level and down to the individual store and shelf level.
• Promotion management and affinity: MBA supports revenue increases through promotion activations, helping to factor in genuine consumer sentiment based on historical transactional data.
• Recommendation engines and content placement: Improving e-commerce recommendations based on actual shopper behavior is a core MBA application. It is a powerful tool to drive incremental conversions.
• Inventory management: This powerful MBA application allows stock optimization based on historical and forecasted demand, even at a particular shopping facility or warehouse level. It helps to reduce stock outages, release frozen inventory cash, and increase customer satisfaction.

At SoftServe, we have solid experience performing MBA and implementing the objectives we've just outlined. Our process drives tangible business results. Here are some examples:

• We implemented an advanced analytics platform for assortment and promotion management for one of the Middle East's biggest retailers. It was based on MBA across a vast network of online and offline stores, leveraging hundreds of millions of transactions generated by more than five million consumers across the region. The impact of the tool delivered 200+ MM AED in topline revenue and resulted in 4-6x increased productivity.
• We developed an advanced recommendation engine (powered by Google Reco AI) for a leading European e-commerce company, leveraging MBA from online transactions. It significantly amplified conversion rates at consumer scale and minimum cost.
• We created an inventory and demand management solution for a US enterprise retailer managing a portfolio of more than 2 million SKU-branch pairs. The underlying MBA allowed us to reduce inventory levels by 15% and increase the stock turnover rate by 30%.
• We also leveraged MBA to perform pre- versus post-Covid analysis for this client. It analyzed product correlations, allowing for agile adjustment of the marketing and sales strategy.

Let’s talk about how SoftServe can help you make data-driven decisions based on our MBA expertise that allow you to sell more to consumers.