UNIT-5

APPLICATIONS
Retail Analytics
 Retail analytics is the process of providing analytical data on inventory levels, supply chain
movement, consumer demand, sales, etc. that are crucial for making marketing, and procurement
decisions.
 To understand the roles analytics plays in retail, it is useful to break down the business decisions taken
in retail into the following categories:
1. Consumer
2. Product
3. Human resources
4. Advertising
Retail Analytics
1. Consumer: Personalization is a key consumer-level decision that retail firms make.
 Personalized pricing by offering discounts via coupons to select customers is one such decision.
 This approach uses data collection to better understand a customer’s purchase patterns and
willingness to pay and uses that to offer personalized pricing.
 Such personalization can also be used as a customer retention strategy.
2. Product: Retail product decisions can be broken down into single product and group of product
decisions.
 Single or individual product decisions are mostly inventory decisions: how much stock of the product to
order, and when to place the order.
 At the group level, the decisions are typically related to pricing and assortment planning.
 To make these decisions, predictive modeling is called for to forecast the product demand and the price-
response function, and essentially the decision-maker needs to understand how customer reacts to price
changes.
 A fine understanding of consumer choice is also needed to understand how a customer chooses to buy a
certain product from a group of products.
Retail Analytics
3. Human resources: The key decisions here are related to the number of employees needed in the store
at various times of the day and how to schedule them.
 To make these decisions, the overall work to be completed by the employees needs to be estimated.
 Part of this is a function of other decisions, such as the effort involved in stocking shelves, taking
deliveries, changing prices, etc.
 There is additional work that comes in as a function of the customer volume in the store. This includes
answering customer questions and manning checkout counters.
4. Advertising:
 In the advertising sphere, companies deal with the typical decisions of finding the best medium to
advertise on (online mediums such as Google Ad words, Facebook, Twitter, and/or traditional
mediums such as print and newspaper inserts) and the best products to advertise.
 They may also purchase other items which have a greater margin.
Retail Analytics
Complications:
There are various complications that arise in retail scenarios that need to be overcome for the successful
use of retail analytics. These complications can be classified into
(a) those that affect predictive modeling and
(b) those that affect decision-making.
Methodologies:
1. Product-Based Demand Modeling- exponential smoothing and ARIMA models are typically focus on
forecasting sales and may require un censoring to be used for decision making.
2. Incorporating Consumer Choice in Demand Modeling- This directly motivates modeling customer
preferences over all the products carried by the retailer.
3. Business Challenges and Opportunities- A good example of such an approach is the “buy online, pick
up in store” (BOPS) approach that has become quite commonplace.
4. Retail Startups - In terms of data collection, there are many startups that cater to the range of retailers
both small and large.
Marketing Analytics
 Marketing analytics can be defined as a “high technology enabled and marketing science model-
supported approach to control the true values of the customer, market, and firm level data to enhance
the effect of marketing strategies”.
 Basically, marketing analytics is the creation and use of data to measure and optimize marketing
decisions.
 Marketing analytics comprises tools and processes will help in various aspects of marketing such as
target marketing and segmentation, price and promotion, customer valuation, resource allocation,
response analysis, demand assessment, and new product development.
 These can be applied at the following levels:
1. Firm
2. Brand/product
3. Customer
Marketing Analytics
1. Firm: At this level, tools are applied to the firm as a whole. Instead of focusing on a particular product
or brand, these can be used to decide and evaluate firm strategies.
2. Brand/product: At the brand/product level, tools are applied to decide and evaluate strategies for a
particular brand/product.
3. Customer: Tools applied at customer level that help in segmenting and targeting customers.
Marketing Analytics
We can segment marketing analytics into the following processes and tools:
1. Multivariate statistical analysis: It deals with the analysis of more than one outcome variable.
2. Choice analytics: Choice modeling provides insights on how customers make decisions.
3. Regression models: Regression modeling establishes relationships between dependent variables and independent
variables.
4. Time-series analytics: This section consists of auto-regressive models and vector auto-regressive models for time-
series analysis. These can be used for forecasting sales, market share, etc.
5. Nonparametric tools: They are used when the data belongs to no particular distribution.
6. Survival analysis: It is used to determine the duration of time until an event such as purchase, and conversion happens.
7. Sales force /sales analytics: This section covers analytics for sales, which includes forecasting potential sales,
forecasting market share, and causal analysis.
8. Innovation analytics: It deals specifically with new products.
9. Conjoint analysis: It covers one of the most widely used quantitative methods in marketing research.
10. Customer analytics: These can be used for segmenting customers and determining value provided by customers.
Social Media and web Analytics
 Social media has created new opportunities to both consumers and companies.
 Companies can analyze data available from the web and social media to get what consumers want.
 Social media and web analytics can help companies measure the impact of their advertising and the
effect of mode of message delivery on the consumers.
 Companies can also turn to social media analytics to learn more about their consumers.
 Social media analytics involves gathering information from social networking sites such as Facebook,
LinkedIn and Twitter in order to provide businesses with better understanding of customers.
 It helps in understanding to creating customer profiles and evolving appropriate strategies for reaching
the right customer at the right time.
 Advantages:
 It enables businesses to identify and encourage different activities that drive revenues and profits and
make real-time.
 It can help businesses in targeting advertisements more effectively and thereby reduce the advertising
cost while improving ROI.
Social Media and web Analytics
1. Display Advertising in Real Time: The Internet provides new scope for creative approaches to
advertising.
There are different types of display advertisements. The most popular one is the banner advertisement.
This is usually a graphic image, with or without animation, displayed on a web page. These
advertisements are usually in the GIF or JPEG images if they are static, but use Flash, JavaScript or video
if there are animations involved.
2. How to Get the Advertisements Displayed?
There are many options for getting the advertisements displayed online. Some of these are discussed
below.
One of the most popular options is placing the advertisements on social media.
You can get your ads displayed on social media such as Facebook, Twitter and LinkedIn.
In general, Facebook offers standard advertisement space on the right-hand side bar.
These advertisements can be placed based on demographic information as well as hobbies and interests
which can make it easy to target the right audience
Social Media and web Analytics
Flowchart for real time bidding:
Health care Analytics
 Health care analytics is a subset of data analytics that uses both historic and current data to improve
decision making, and optimize outcomes within the health care industry.
 Health care analytics is not only used to benefit health care organizations but also to improve the
patient experience and health outcomes.
 Predictive analytics is the use of historical data to identify past trends and project associated future
outcomes. In the health care industry, predictive analytics has many impactful uses, such as
identifying a patient’s risk for developing a health condition, streamlining treatment courses, and
reducing a hospital’s number of 30-day readmissions (which can result in costly fines for the hospital).
 Prescriptive analytics is the use of historical data to identify an appropriate course of action. In the
health care industry, prescriptive analytics is used to both direct business decisions and to literally
prescribe treatment plans for patients.
Health care Analytics

Benefits:
 Improved patient care, such as offering more effective courses of treatment.
 Predictions for a patient’s vulnerability to a particular medical condition.
 More accurate health insurance rates.
 Improved scheduling for both patients and staff.
 Optimized resource allocation.
 More efficient decision-making at the business and patient care level.