How can you use analytics to sell more sandwiches? I'll walk you through this use case where an independent convenience store owner recently decided to expand her lunch business by adding a deli counter, which provides customers with made-to-order sandwiches.
She wanted to analyze what customers were buying so she could improve her offerings. For three months, she captured transaction-level data that was intended to help her understand the contents of her customers’ baskets. In particular, she wanted to profile her deli sandwich buyers. She wanted to understand what add-on items they purchased, in order to help her decide what additional items she could successfully promote to them, and how best to go about it.
Step 1: Identify Data
The proprietor decided to use FICO Analytic Modeler Decision Tree Professional. She uploaded a data base where each record represents a customer's basket and got to work.
Step 2: Create a Project
She created a new project so she could access and analyze her information.
Step 3: Create a Tree
Once her project was created, she was ready to create a tree to capture and analyze all her data. Here, she specifies her outcomes of interest and adds predictors so she can assess the relationship among selected variables.
Step 4: Draw Conclusions
Now it's time for the fun part. Since she has already used Decision Tree Pro to create a tree, she's ready to draw conclusions and establish her business plans going forward. She can create treatments for different branches, and dig into her data to see what items customers are likely to buy with and without sandwiches. From there, she can strategize about creating combos to increase sales and revenue.
The proprietor placed chips and pretzels closer to the deli counter. This helped streamline the flow of the lunch crowd through the store at its busiest time, which in turn helped to serve more customers and increase sales.
Additionally, she created bundled lunch “meals” including:
- Sandwich, chips or pretzels, and soda (competitively priced with local sandwich shops)
- Sandwich, tea, and fruit (promoting the additional anti-oxidants contained in this trio)
This helped to promote repeat business from existing customers, to increase the sale of add-on items, and to attract new lunchtime customers.
Visit the Analytics Community to discuss using decision trees and other analytic applications and tools.