DATA MINING FOR DECISION MAKING IN RETAIL

PRESENTED BY: MD INTAKHAB ALAM ROLL NO. 110122 Free Powerpoint Templates

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ABSTRACT The propagation of retail in today’s dynamic business environment has increased the demand and urgency of successful business organisation to be able to react rapidly to the changing market demands. by utilizing the latest data mining techniques of extracting previously hidden and potentially useful iformation from vast resources of unrefined data. Free Powerpoint Templates Page 2 .

for Free Powerpoint Templates Page 3 . .Peter F.‘‘An adequate information system finally requires that executives systematically integrate the information into their decision making’’ . Drucker in ‘‘mangement Challenges the 21st Century ’’.

but it is increasingly used in the sciences to extract information from the enormous data sets generated by modern experimental and observational methods. It is usually used by business intelligence organizations. and potentially useful information from data’’ and ‘‘the science of extracting useful information from large data sets or databases’’.Data Mining Data Mining is the principle of sorting through large amounts of data and picking our relevant information. It has been described as ‘‘the nontrivial extraction of implicit. and financial analyst. previously unknown. Free Powerpoint Templates Page 4 .

Data reduction methods can include simple tabulation.etc Free Powerpoint Templates Page 5 . Extraction of data from repositories.Data mining is filtering through the data to identify hidden patterns and establish relationship to predict future behaviour. aggreagation (computing descriptive statistics) or more sophisticated techniques like clustering. Data cleaning and preprocessing: It’s the the act of removing inaccurate records from database. Data reduction and transformation: The term data reduction in the context of data mining is usually applied to projects where the goal is to aggregate or merge the inforation contained in large datasets into manageable (smaller) inforamation nuggets. principal components analysis.

retailers can improve their inventory logistics and thereby reduce their cost in handling inventory. etc and the products that they buy. every time product handled it costs the merchant. Free Powerpoint Templates Page 6 . etc. marital status. Use of discovered knowledge to make decision the evalution from business data to business information.Data mining: search for patterns of interest. By using data mining techniques. each new step has built upon the previous one. In retail. A retailer can identify the characteristics of its customers such as gender. Pattern evaluation and knowledge presentation Visualization. transformation. removing redundant patterns. number of children.

RFID tags automatically update the database. Wal-Mart uses Radio Frequency Identification (RFID) readers toreduce stock outs. this information can have a tremendous positive impact on their operations by decreasing inventory movement as well as placing inventory in locations where it is likely to sell. As soon as goods are sold. Globally.This information can be extremely beneficial in stocking commodity in new store locations as well as identifying ‘‘hot’’ selling products in one demographic market that should also be displayed in stores with similar demographic characteristics. For nationwide retailers. A software monitors the syock to be depleted and automatically generates a list of items that need to be replenished. Free Powerpoint Templates Page 7 .

obsolescence. india which includes Point of sales: Used for predicting customer shopping lists from point of sales data.spoilage/Experiration.Various data mining or business intelligence tools available in market are RFID solution from Orizin. misplacement Out-of-stock position Free Powerpoint Templates Page 8 . Customer Management Security – Checking un-authorized movement Stock Verification Merchandise Management.

Reyailers need to answer following questions quickly like: Which are our lowest/highest margin customers? What kind of strategy is required to increase sales? Which customer are most likely to go to the competition? How to manage customer relations to increase profits? How to identify customer purchasing patterns to improve inventory Free Powerpoint Templates Page 9 .Problem Description The difficulty of decision-making in business application is rapidly increasing. as the world is becoming information driven.

Features of this techniques are:  Ability to handle changing qualitative and quantitative data.  Short decision reaction time.The cope with changing environment. Always remember happy customer is a loyal customer. Free Powerpoint Templates Page 10 . new techniques are required.  Analysis of this results.  Process rather than problem orientation.  Flexibility of decision-making models to the evolving decision environment It becomes very important to take quick decision to retain and build a loyal customer base.  Large and overlaping problem domains.

It is also known as Business Intelligence for enterprise. Free Powerpoint Templates Page 11 .Solution Data mining is used to resolve these problems.

Stages of Data Mining Free Powerpoint Templates Page 12 .

data Boston. (SQL) England last march?” Oracle. (1990s) last march? multidimensional Drill down to database. cognos. Dynamic data delivery at record levels Retrospective. Sybase. Microstrategy Retrospective. IBM. Tapes. IBM.Evolutionary Step Business Question Enabling technologies Product Providers Characterististics Data Collection (1960s) “What was my total revenue in the last five years?” Computer. Informix.” warehouses Data Mi ning (Emergin Today) (1996) “What’s likely to happen to boston unit sales next month? Why?” Advanced Pilot. dynamic data delivery at multiple levels Data Warehousing & “What were unit On-line analytic Decision Support sales in New Enland processing (OLAP). massive (nascent industry) database Free Powerpoint Templates Page 13 . CDC Retrospective. SGI. proactive informaion multiprocessor Numerous Startups delivery computers. Lockheed. static data delivery Data Access (1980s) “What were unit Relational Databases sales in New (RDBMS). arbor. Microsoft Pilot. Disks IBM. Prospective. algorithms. comshare.

Free Powerpoint Templates Page 14 . Apart from various models.Application There are various data mining applications which are used in retail  Basket Analysis: Which items customers tend to purchase.It’s a modeling to technique based upon the theory that if you buy a certain group of items. It helps in stocking and promotions. many new software tools have emerged for forecasting sales in a better fashion. It helps in examining time based patterns which helps retailers in making stocking decisions. you are more likely another group of items.  Sales Forcasting: Predicting the future sales of the company in a given market is called sales forecasting.

and what and when to mark down so you can maximixe sales while minimizing costs and constraints. how much should be bought. enhance customer relationship. what to promote. and produce long term loyal customers. Data mining helps marketing professionals understand customer behaviour. wamts and attitides of customers and prospects. how to price. Data Marketing: Information of existing customer is maintained to reduce marketing costs. Free Powerpoint Templates Page 15 .  Merchandising Planning and allocation: It is to determine that which products should be on the shelves. This understanding allows them to target marketing campaigns more accurately and to line up campaigns more closely with the needs.

Food.Retailer Line of Business Solutions Used Shopper’s Stop Ltd. Ltd. Pune. etc. Apparel. Home furnishing CRM: Business objects Oracle Financials & more JDA Retail ERP (Merchandise Management System) VPN (Tata Indicom) Retail Pro (POS + Head Office + Warehouse) POS System integrated with MMs by Zensar. etc POS: Home-Grown solution Handheld scanners at Food Bazaar Free Powerpoint Templates Page 16 . Trent Westside (Apparel) RPG Group Food. Pantaloon Retailer (India) Apparel. Household items. Electronics.

7 … . 7% . … 4% … … ………………………………… … 13 ….05 to 1m) 32 Cities … … 2. .… …….2 .……. . 6% .4 115. … 3% … … 2% 3% .… ………………………………… 77% 73% 69% 57% Rest of India 87.……. .5 … … … … .… 6.500 towns + 6 lakh Villages ………………………………………………………………………………………………………………………… 2010 2015 2004 2025 Free Powerpoint Templates Page 17 .…… … … .…….3 5. 10% 3..… Top Cities (Pop: > 1m) 27 Cities … … . ……………………………………… … .Retail Market Growth Population in crores 2001 2025 (CSI) Proportion of the total Retail market (In Percentage) ………………………………………………………………………………………………………………………… Metros & MiniMetros & Cities 18% 20% 28% . 15% … … Large Cities (Pop: 0.4 4.……… …… … 6% .7 … 7. .…….… … .

The amount of data available is growing at an extraordinary pace. Once large databases are converted to data warehouses. data mining techniques can be used to extract information and discover hidden patterns can be used to make decision. stages of data mining & applications which are used by top Retail outlets and challenges faced in india.Conclusion In this paper we discussed about data mining. Retail business is blooming in india at a fast pace so need of the time is to realize is the importance of undersatnding customer preferences in order to retain them to survive in this competitive market by taking correct decisions. Free Powerpoint Templates Page 18 .

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