W. Frank Dell II, CMC

Family Dollar Tests Basket Analysis

March 11, 2010

FROM RETAILWIRE:
In a project last year, Family Dollar worked with Applied Predictive Technologies to understand what's happening at the basket level. How do you think better access to basket analysis insights can help retailers and vendors?      [more...]

Basket analysis is simply re-naming something grocers have done for years. And vendors use it to sell promotions every day. Every item has a multiple when put on promotion. This multiple varies by the level of support. But an item multiple does not always translate into a basket increase. In fact it can result in a basket or transaction decrease.

We use multiple regression analysis to identify the items that increased the transaction size. Put hot dogs on sale and buns increase, plus the total transaction increases when they add mustard to the cart. Every good buyer or category manger knows the items that will kick up sales. This may be new for alternative channels, but should not new to grocers.