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According to a 2011 study by Kantar Retail, 72% of retailers consider category management very / extremely important, with 88% believing that use of category insights will differentiate companies in the future, putting it on top of the list. Yet, for years, category management analytics in most retailers has not gone beyond using standard market research, voice of the customer, and market basket analysis tools, barely scratching the surface. Today, thanks to advancements in data mining techniques, retailers can do more.
Social Network Analysis (SNA) is a relatively new commercialized analysis method, automatically identifying social relations between individuals, based on their telecommunications, finance or social media interactions. Today, most leading telecoms operators in the world are using some SNA solution.
Product Network Analysis (PNA) is the application of SNA algorithms in the category management domain, in order to automatically identify:
Which products naturally belong to the same micro category
Which products are most important in terms of creating category loyalty
Which products are most likely to trigger cross-category sales
Where category rationalization opportunities exist