Consumer Panels — Basket Analysis

Basket Analysis - user (%), frequency of use, spend - Consumer Panels, Consumer Analytics

Basket Analysis - purchase basket volume and value breakup - Consumer Panels, Consumer Analytics

Exhibit 7.16   Petrol Basket for Shell 98 (a fictitious example). Click to view demo.

The basket is an analysis of transactions by a buyer group. Buyer group, as mentioned earlier, may be a demographic group, a segment, or it may be a user-defined group of consumers, defined on the basis of what they bought, where they bought or how much they bought. It is often defined as buyers of a particular brand; in which case the basket constitutes the repertoire of brands bought by the buyers of that brand.

For example, Exhibit 7.16 depicts the analysis of the petrol basket for Shell 98 for a particular month. The basket reveals that loyalty for Shell 98 is 69.6% in volume (frequency) terms and 70.0% in value terms. These buyers pumped Shell 98 on an average 1.5 times that month, spending $126. It also reveals that 19.4% of Shell 98 motorists pumped Synergy 8000 and that Synergy 8000 constitutes 12.3% of the total spend on average. In total the average Shell 98 motorists spend $180 (pumping 2.1 times) for that month.

Basket analysis is frequently used in digital marketing to personalize user experiences. For example, the use of recommendations (“Customers who bought this also bought ...”) by Netflix and Amazon, to drive sales and improve users’ on-site experience.

Cross basket, an interesting variation of the basket analysis, analyses category purchases by buyers selected on basis of their buying behaviour in some other category. For example, the cross basket of shampoo purchases by Dove body wash buyers, would reveal the repertoire of shampoos bought by Dove body wash buyers.

The basket and cross basket provide a comprehensive understanding of the transactions by the buyer group, and as we will see from the case Johnson’s Body Care, at the end of this chapter, this is very useful for addressing a variety of business issues.

Yet another variation of the basket analysis, of great relevance to retailers, is the shopping basket. It would interest retailers to know the total spend, and the break-up of that spend across categories, for the shoppers of some of their brands. These could be brands that they promote most frequently, or they could be their house brands.

If a brand buyers’ shopping basket is large in terms of quantity and value of purchases, that brand is considered a transaction builder Retailers would prefer to stock and promote these products because they tend to boost sales.

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Basket Analysis Demo

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Demo of Basket analysis on the Destiny analytics platform.