Scribd
Upload
33 views4 pages

Sample Report 1

The document proposes using market basket analysis to help small businesses like grocery shops and vegetable vendors increase their sales by analyzing customer purchasing patterns and identifying products that are frequently bought together. It describes how market basket analysis works and how the technique could be implemented as a service to provide businesses with insights on how to group products to boost sales. The service would analyze transaction data from shops to generate association rules between products and make recommendations to businesses.

Uploaded by

Roshan atul
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
33 views4 pages

Sample Report 1

The document proposes using market basket analysis to help small businesses like grocery shops and vegetable vendors increase their sales by analyzing customer purchasing patterns and identifying products that are frequently bought together. It describes how market basket analysis works and how the technique could be implemented as a service to provide businesses with insights on how to group products to boost sales. The service would analyze transaction data from shops to generate association rules between products and make recommendations to businesses.

Uploaded by

Roshan atul
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 4

Market Basket Analysis for increasing sales of grocery shops and vegetable vendors

Samiksha Kulkarni

31/05/2021

Abstract

In this report, I have proposed the idea of using Market Basket Analysis, an Association Rule
mining technique to improve the sales, and in turn the revenue generation of small businesses
like shops and vegetable vendors.Over 82% of the small businesses in India have had a negati
-ve impact due to the pandemic followed by the lockdown.Since these businesses are heavily
dependent on sales for their livelihood(vegetable vendors/farmers),they need to be looked upon
and provided with some techniques to boost their sales.
Market Basket Analysis has extensively been used by E-commerce companies to boost
up their sales. The proposed service will analyze the customer purchase behaviour for the local
grocery, or vendors and identify relationships between the products frequently bought by them
together.

1. Problem Statement
The problem statement is to apply the Market Basket Analysis to analyze the customer
purchasing patterns in shops and vendors. Since they have no other source of income and
also contribute to the majority of our country’s population,its a need of the hour to solve
their problem.In order to do so, I hope to create a service that can provide them with
insights into how to group items together so that the customer is bound to buy these, or is
likely to purchase.

2. Market/Customer/Business need Assessment


The covid-19 pandemic and the lockdown has negatively affected small businesses like
shops and vegetable vendors. They have been forced to shut down their shops and stalls
early, which has resulted in significant and rapid decrease in sales.Also, the customer
buying preferences have been significantly changed due to the pandemic.Therefore, by
using this technique, we aim to provide small businesses with useful insights from the
available data and ways to generate more revenue.

3. Target Specification
The proposed system/service will provide the shopkeepers and vendors with some
techniques so that their sales boost up and they no longer have to go through an economic
crisis. It will suggest them to group certain items together, based on the analysis
performed by the algorithm, so that the customer buys these grouped items together.
Also, applying certain discount strategies on such grouped items will also increase the
sales as required. As far as the local vegetable vendors are concerned, the analysis aims at
suggesting to them the frequently bought veggies in a certain area, which they can
eventually consider for cultivation and hence, increase their sales as well.

4. External Search
The sources I have used as reference for analyzing the need of such a system for local
businesses and how E-commerce giants have been using the technique to boost up online
sales, have mentioned below :
● Understanding Customer Behaviour

● How E-commerce sites benefit from Market Basket Analysis

● Market Basket Analysis explained

● Increasing Sales and Improving ROI

● A study on Understanding Changing Trends of Customer Behaviour and hence


the Market

4.1 Benchmarking
E-commerce giants like Amazon,Flipkart have been using affinity analysis to
perform Market Basket Analysis,which identifies purchasing habits of customers and
uses this information to cross-sell and up-sell relevant items. But this technique would
also be beneficial when applied to the small businesses since most of the daily needs
and other essentials are still being bought from these shopkeepers and vendors.

4.2 Applicable Patents


● Patent 1 - System for researching product dynamics in market baskets
● Patent 2 - Enhanced Market Basket Analysis Model
There are a lot of patents that can be looked upon, but since these two relate the
most to the application of Association Rule Mining mentioned above,I have
mentioned them.
The first patent describes in detail the Association Rule Mining Technique and
how it has been used for generating baskets of items based on the customer
purchase behaviour identified from the applicable dataset, according to
predetermined attributes. It also describes the rules generated by the algorithm to
group the items together.
The second patent describes an enhanced model for Market Basket Analysis. This
model can generate baskets(items grouped together) based on historical purchase
data, which are causal and predictive,and the output(baskets) can then be fed as
input to another output generator which generates the final product groups, along
with a score that characterizes the likelihood of purchase for the predicted group.

These two will be significantly considered while developing and implementing a


similar system for small scale businesses.

4.3 Applicable Constraints


● Data Collection from shopkeepers and vendors
● Continuous data collection and maintenance
● Lack of technical knowledge for the user(vendors)
● Taking care of rarely bought products
● Convincing the shopkeepers to implement the system in their shops.

4.4 Applicable Regulations


● Data protection and privacy regulations(Customers)
● Govt Regulations for small businesses
● Employment Laws
● Antitrust Regulations
● Regulations against false advertising

5. Business Opportunity
Since the above technique has only been used by large companies, this can be
extended for small businesses, not only shopkeepers or vendors, but also food businesses
and takeaways.Therefore, there is a fair chance of this service being a great business
opportunity. Every small business that depends on sales can and would want to opt for
using this service in order to always know what their customers want. The emergence of
every small business is thus a fairly great business opportunity for the service provided
by us.

6. Final Product Prototype


The final product is a service that provides small businesses with detailed information on
what products to be sold together and other similar useful insights into how to increase
the sales of their business.
The service implements the Market Basket Analysis, i.e Association Rule Mining
technique on the dataset of transactions collected from the shopkeepers/vendors
● Each transaction represents a group of items brought together(itemset)
● These are then analysed to identify rules of association
● These rules are implemented/executed considering the metrics:
confidence,support and lift for the rule
● Support : the percentage of transactions that contain all of the items in an
itemset(suggested group) Rules with high support are preferred.
● Confidence : the probability that a transaction that contains the items on the LHS
of the rule also contains the item on the RHS.Greater the confidence, greater the
return rate expected for a given rule
● Lift : lift summarises the strength of association between the products on the left
and right hand side of the rule; the larger the lift the greater the link between the
two products.
● Apriori Algorithm will be used to find the rules of association between
products.

Generating frequent itemset is the computationally expensive step, which can be


improved using hash-based itemset counting,transaction reduction,partitioning, sampling
and dynamic itemset counting.

7. Conclusion
More and more organizations are discovering ways of using market basket analysis to
gain useful insights into associations and hidden relationships. But this extension for
small businesses is a great opportunity to improve sales and help these businesses grow.

I have hence proposed the application of this technique for small businesses. This is not a
full fledged plan, but with a considerable amount of work and effort, it seems achievable.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy