What is Basket Analysis ?

Basket Analysis is a modelling technique based upon the theory that if you buy a certain group of items, you are more (or less) likely to buy another group of items. For example, if a couple aged between 25 and 35 buys some apparel for their own need, they will surely buy something for age group between 0 and 5.
The set of items a customer buys is referred to as an itemset, and market basket analysis seeks to find relationships between purchases.
Traditionally, the relationship will be in the form of a rule.This technique is used to uncover interesting cross-sells and related products.
The Customer here is a parent and will surely buy some articles for their kids. This is referred to as the SUPPORT for the rule. The conditional probability that a customer will purchase kids articles is referred to as the CONFIDENCE.
As a merchandiser you should look for pairs with a high confidence.
A confidence of 100% means that the products are always purchased together.
The higher the confidence means that there is probably a strong relationship between the products.
After examining the confidence look at the support.A low support means that the pair isn’t purchased a lot.
This doesn’t mean it would make a bad cross sell just that they aren’t ordered together very frequently.
Use your own judgment. Obviously if you see something with both a high confidence and high support you’ve found something interesting.


Nilesh Shah nileshshah@rancelab.com Over 10 years of experience in the field of software development, sales and marketing. He has assisted over 500 Retailers and Restaurateurs in implementing the Retail and F&B software with barcode & pos hardware for their business. He holds a designation of Director, Marketing in Rance Computer Pvt Ltd. He holds the certification from Microsoft Corporation and NIS. His current research focuses on developing and implementing intelligent retail systems...

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