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Predictive Analytics in Retail
By Jethendra B K
Jethendra B K
Jethendra B K
Level: Basic

Post graduate in Agricultural Economics with handful of experience in retail industry….

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Before getting started on the topic let me put across a question. What is the core idea of a retail business? After discussing with many retail managers, I was able to make an inference on what they do think about always. It is, guaranteed good returns. But all business comes with an inherent risk being associated with it. So how does a retailer ensure that he is investing his money in the interest of guarantee of good returns with minimum risk?

Also, retail is not just about buying and selling of goods with the idea of earning some margin upon the investment made. It includes various other aspects like understanding customer purchasing behaviours, tastes, preferences, complimentary products, substitutable products, pricing, promotions, markdown etc. Today Indian retail market is increasing as never before with tough competition from every player to survive in the market. Having understood the situation, how does a retailer deal in this complicated environment without losing the idea of guaranteed good returns?

With the discovery on utility of statistics and sophisticated mathematics in retail it is possible to handle the typical situation explained above. Predictive analytics which is the science concerned with the prediction of future probabilities and trends with an acceptable level of reliability.

Some of the utilities of predictive analytics discovered in retail are:

1. Ability to analyze various strategies surrounding merchandizing, pricing, promotion and markdown to be able to make the right decision.
2. Ability to measure the impact of various options of planned promotions
3. Ability to measure the impact of planned price changes (with/without promotions)
4. Ability to Predict the impact of a planned markdown plan
5. Ability to try different what-if scenarios to develop a suitable pricing/ promotion plan
6. Ability to understand purchase patterns to cross-sell and up sell products to identified customers

With the advancement of technology it is possible to have an interactive playground where the retailer is able to see the impact of various retail strategies on sales units and profits even before making changes in real life.

Jethendra.B.K.
Retail Consultant
CustoLogix Solutions
Email: jethendrak@custologix.com | URL: http://www.custologix.com

Article Source: http://EzineArticles.com/?expert=Jethendra_B_K

Jethendra B K – EzineArticles Expert Author

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Article Submitted On: July 25, 2009

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* MLA Style Citation:
K, Jethendra B. “Predictive Analytics in Retail.” Predictive Analytics in Retail. 25 Jul. 2009. EzineArticles.com. 10 Aug 2009 .

* APA Style Citation:
K, J. B. (2009, July 25). Predictive Analytics in Retail. Retrieved August 10, 2009, from http://www.ezinearticles.com/?Predictive-Analytics-in-Retail&id=2660433

* Chicago Style Citation:
K, Jethendra B. “Predictive Analytics in Retail.” Predictive Analytics in Retail EzineArticles.com. http://www.ezinearticles.com/?Predictive-Analytics-in-Retail&id=2660433

Jethendra.B.K.
Retail Consultant
CustoLogix Solutions
Email: jethendrak@custologix.com | URL: http://www.custologix.com

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