7 Ways Market Basket Analysis Can Make You More Money By Teresa Wingfield February 14, 2023 Market basket analysis, also referred to as affinity analysis, uses machine learning to increase sales by analyzing customer purchasing patterns. You can use market basket analysis for analyzing large data sets, such as purchase history, to reveal products and product groups, that customers are likely to purchase together. Market basket analysis is a very valuable marketing analytics tool. Identifying relationships between items that people buy provides tremendous opportunity to know your customers better which, in turn, helps you improve customer experience. Here’s a look at some of the top areas where market basket analysis can have a huge impact. #1. Cross-Selling The goal of cross-selling is to sell an additional product or service to an existing customer. Market basket analysis assesses whether the purchase of the product increases the likelihood of the purchase of other products, so that marketers can bundle products or develop other cross-selling strategies. #2. Recommendation Engines A recommendation engine suggests products based on the interest of the customer. It frequently uses market basket analysis of data such as items in the shopping basket/cart, browsing history and past purchases to recommend related products that the customer is likely to be interested in. #3. Product Placement Identifying products that are often purchased together through market basket analysis helps optimize the placement of products in stores, in catalogs and on a web site. Placing those associated items close by increases encourages the buyer to purchase multiple products. #4. Affinity Promotion Affinity promotions are designed based on the inclusion of associated products. Examples include creating more attractive discount plans, incentives and loyalty programs that increase spending and improve customer experience. #5. Customer Behavior Associating purchases with demographics and socio-economic data, such as age, gender, ethnicity, and income, may produce very useful results for understanding customer behavior. This helps to develop marketing strategies that break customers into segments and designs marketing activities that target the segments most likely to respond to your efforts. #6. Inventory Management Understanding items that are frequently bought together can help you manage your inventory better. For example, you can avoid stockouts when you run a promotion by predicting how the sale of products related to the promotional item may increase. #7. Store and Website Traffic Selling low-margin products can drive the sale of high-margin products. Understanding their associations can help you develop loss-leader strategies with a low-priced product that increases store and website traffic, and increases overall revenue and profits. Get Started Today! Who doesn’t want to make more money? The Avalanche Cloud Data Platform makes it easy to connect, manage and analyze data so that you can delve into detailed associations and product relationships using marketing analytics such as market basked analysis. The results can help you increase sales, improve customer experience and cut costs. About Teresa Wingfield Teresa Wingfield is Director of Product Marketing at Actian where she is responsible for communicating the unique value that the Avalanche Cloud Data Platform delivers, including proven data integration, data management and data analytics. She enjoys applying her extensive knowledge in these areas to help customers find solutions that will help them achieve long-lasting success. Teresa brings a 20-year track record of increasing revenue and awareness for analytics, security, and cloud solutions. Prior to Actian, Teresa managed product marketing at industry-leading companies such as Cisco, McAfee, and VMware. She was also Datameer’s first VP of Marketing for big data analytics built on Hadoop, and has served as VP of Research at Giga Information Group, acquired by Forrester, providing strategic advisory services for data warehousing and analytics. Teresa holds graduate degrees in management from the MIT Sloan School of Management and software engineering from Harvard University.