Clustering is a function of category management which you can use to facilitate end-to-end solutions. You can also use cluster analysis to group your retail data and understand the similarities between your stores for a specified product category. Doing so provides you with competitive insights about your business which you can use to leverage strategic opportunities.
More than that, by implementing clustering in your business, you can optimise customer relationship management, assortment planning and consumer segmentation to target each cluster effectively and create a profitable customer response.
Cluster analysis can be a technically complex topic. But don’t let that stop you from downloading this ebook. We’ve included the basics to get you started with using clustering in your business. We touch on the concept of clustering. And we explain how you can group your stores based on the similarities between them.
Once you have selected a clustering approach, you need to select your data sources.
We break down those data sources you can use to achieve your business goals. Your access to data as well as the environment in which your business operates should be considered at this point. Our advice? Select those data sources and types that you can use to generate meaningful insights from a cluster analysis.
Following these steps, we dive into clustering as an unsupervised machine learning application. We discuss what machine learning is as well as the types and applications of this activity.
Finally, we highlight the applications and benefits of clustering. That’s to help you identify where cluster analysis could help you. We break down clustering as a function of category management as well as clustering for CRM, assortment planning and customer segmentation.
Although cluster analysis may seem like a complex task that is too modern or advanced, you need to consider why it’s worth it. For one, the insights generated from this activity are paramount to achieving a competitive advantage. That said, clustering can be as simple or as complex as you make it and should definitely be considered for your business.