Product Basket Design: How to Apply Analysis for Increased Efficiency and Profitability
Product basket analysis is a method of analyzing customer purchasing behavior by looking at the items that customers typically purchase together. This can help businesses identify which products are most popular and which products are commonly purchased together. This information can be used to optimize product placement, create targeted marketing campaigns, and improve overall sales.
Based on the analysis, a business can take action by:
- Placing products that are commonly purchased together in close proximity to each other in the store, in order to make it more convenient for customers to find them.
- Creating targeted marketing campaigns for specific product combinations, to help increase sales of those products.
- Optimizing product placement and pricing based on sales data, to maximize profits.
Additionally, the business can also use the data to understand which products are not selling well and take actions to improve their sales.
Product Basket Analysis Example in Driving Growth:
- Gather data: The restaurant would first gather data on customer orders, including which menu items were ordered and when they were ordered. This data can be collected manually or through the use of a POS system.
- Analyze the data: Next, the restaurant would analyze the data to identify patterns in customer ordering behavior. For example, they may find that customers who order the chicken parmesan entree also tend to order a Caesar salad and a glass of chardonnay.
- Interpret the data: Based on this information, the restaurant could interpret that chicken parmesan, Caesar salad and chardonnay are a popular combination and that customers are likely to order this combination as a set meal.
- Take action: Based on this information, the restaurant could take action by:
- Creating a "Chicken Parmesan Meal Deal" that includes a Caesar salad and a glass of chardonnay at a discounted price.
- Placing the chicken parmesan, Caesar salad, and chardonnay prominently on the menu, to make it more convenient for customers to find them.
- Creating targeted marketing campaigns to promote the "Chicken Parmesan Meal Deal" to customers who have ordered chicken parmesan in the past.
Monitor and update: The restaurant should monitor the results of the actions taken and update its strategy as needed. For example, if the Caesar salad is not selling well, the restaurant can take actions to improve its sales or change it with a more popular salad.
By using product basket analysis in this way, the restaurant can increase sales and optimize its menu to better meet the needs and preferences of its customers.
Product Basket Analysis Example in Identifying Customization Choices
Product basket analysis can also be used to identify customization choices that customers make when ordering. For example, a restaurant can use data on customer orders to identify which toppings or sides customers typically add to their entrees, or which types of sauces or dressings they prefer.
- Analyze the data: Next, the restaurant would analyze the data to identify patterns in customer customization choices. For example, they may find that customers who order a hamburger tend to add bacon and avocado as toppings, and prefer barbecue sauce.
- Interpret the data: Based on this information, the restaurant could interpret that hamburger with bacon and avocado toppings and barbecue sauce is a popular combination and that customers are likely to order this combination as a set meal.
- Take action: Based on this information, the restaurant could take action by:
- Creating a "Bacon Avocado Burger" that includes bacon, avocado toppings and barbecue sauce as default options.
- Placing the "Bacon Avocado Burger" prominently on the menu, to make it more convenient for customers to find them.
- Creating targeted marketing campaigns to promote the "Bacon Avocado Burger" to customers who have ordered hamburger with bacon and avocado toppings in the past.
Monitor and update: The restaurant should monitor the results of the actions taken and update its strategy as needed. For example, if the barbecue sauce is not selling well, the restaurant can take actions to improve its sales or change it with a more popular sauce.
By using product basket analysis in this way, the restaurant can increase sales and optimize its menu to better meet the needs and preferences of its customers, and also offer customisation options that customers are more likely to choose.
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