Generating return on data: modeling consumer behavior in retail spaces

Many retailers have invested significant resources to gather data about their customers. The data collected may include point-of-sale data, loyalty card data, or even tracking data from video cameras or RFID tags. The benefits of installing and maintaining data collection, processing and storage systems have not been readily apparent.

Icosystem can help retailers generate a return on their data investments by applying advanced consumer behavior modeling and data mining techniques. A custom tool is developed through a collaborative effort combining the retailer's domain expertise and available data with our own expertise in consumer behavior modeling for the retail sector. By simulating the behavior of individual shoppers we are able to understand how the shopper's experience is influenced by product assortment, store layout, product placement, promotions and pricing. The simulation tool can address issues such as:

• What is the optimal product assortment, and how does this vary across product categories and store locations?
• What is the right level and product mix for loyalty card discounts that stimulates purchasing behavior without unnecessarily sacrificing margins?
• What is the ideal location of impulse purchase items?
• How will changes in the floor layout impact shopper behavior?
• How can promotions and discounts be used to increase purchasing and customer loyalty?
• What is the best way to segment customers based on their behavior rather than simply on demographic and sales data?

By answering these and other questions, retailers are able to generate significant value from their data, while gaining deep insights into the behavior of their customers.