Project background

By the end of 2003, the competition hotspot among retail vendors has shifted from purely store expansion to the structural adjustment focused on profit increasing. Under the background of merely 3% gross profit rate, how to retain the existing customer, find out new customer, strengthen the competition capability and manage the central manufacturer–supermarket–customer relationship line becomes the key problem and operating foundation.

This company puts great effort in the information system construction these years. The accumulated business data and information enables the deep and full-scale analysis. As a company expertise in data analysis and decision support, we provide our professional knowledge and best service to help it to make out a enterprise strategy by following the modern Data–Decision–Action way to ensure the leader position in this industry.

Solution Summary

The data to support analysis largely come from the following datasets: MemberInfo, MemeberCredit, MemberAddr, MemberTransaction.

The analysis is addressed on the following two aspects:

• Customer Analysis: including customer classification, VIP customer identification, customer deposit analysis, customer royalty analysis, customer behavior analysis, VIP customer behavior analysis, etc
• Merchandise Analysis: X-sell analysis, sales trend analysis, promotion effect analysis

Features

Customer Classification

• Purpose of Analysis
  In business different customers should be treated differently. So a reasonable customer classification is much valuable for applying different sales manners as well as identifying and maintaining VIP customers.
• Variables for Analysis
  Customer type, Country, Region, Gender, Age, Education, Career, Position, Monthly income, etc.
• Analytical Approaches
  K-means Clustering, Tree Clustering

VIP Customer Identification

• Purpose of Analysis
  It is an important sales boosting approach to identify VIP customers and develop, maintain good relationships with these customers. Besides, maintaining VIP customers is crucial for profit increasing and therefore it is the highlight spot in the whole CRM system.
• Variables for Analysis
  Monthly income, Balance amount, Member credits, etc.
• Analytical Approaches
  80/20 rules, Pareto Charts.

Customer Deposit Analysis

• Purpose of Analysis
  By analyzing the customer deposit, the change in balance will be obtained and predicted, which will help to adjust the sales strategy.
• Variables for Analysis
  Deposit Balance
• Analytical Approaches
  Sequence Charts, Time serial Analysis

Customer Royalty Analysis

• Purpose of Analysis
  By analyzing customer royalty, customers of different types will receive different treatments: for the customer with high royalty, his credit will increase; for the customer with mediate royalty, more effort should be exert; for the customer with low royalty, some actions will be taken to prevent fraud cases.
• Variables for Analysis
  Accumulate Fraud Times, Charge Off Amount, Customer Credit
• Analytical Approaches
  Cluster analysis, Modeling, Optimization

Customer Behavior Pattern Analysis

• Purpose of Analysis
  Through the analysis of customer behavior pattern, some regular behavior pattern can be detected in customers with particular characteristics (such as age, sex, position, income, etc.), which is very helpful for product reposition and promotion planning.
• Variables for Analysis
  Age, Gender, Position, Income, Type, Education, etc.
• Analytical Approaches
  Decision Tree

Merchandise Analysis

X-Sell Analysis

• Purpose of Analysis
  The cross sell analysis will help to detect the correlation between different merchandises. It will assist to select a better promotion strategy especially for selecting a combination strategy. So it is very helpful to the promotion decision-making.
• Variables for Analysis
  Number of POS Transactions, Member ID, Transaction Time, Merchandises, etc.
• Analytical Approaches
  Association rules.

Sales Trend Analysis

• Purpose of Analysis
  Analyzing and comparing the total sales number and amount for different merchandises will help adjusting the merchandise composition and enhancing the competition capability.
• Variables for Analysis
  The amount of sales collected from POS machines.
• Analytical Approaches
  Sequence Charts.

Effect of Sales Promotion Analysis

• Purpose of Analysis
  By analyzing the effect of sales promotion, the effectiveness of the promotion will be evaluated and the promotion strategy will be adjusted in respect of maintaining or enhancing the current level.
• Variables for Analysis
  The amount of sales before and after sales promotion collected from POS machines.
• Analytical Approaches
  Bar Charts, Nonparametric Test.