A joint research project of the Institute for Information Systems (iisys) at Hof University of Applied Sciences and NKD Group GmbH is currently looking at current purchasing behavior in the approximately 2,000 stores of the Bindlach-based textile retailer. The primary question being investigated is which groups of items are related to each other during the purchase process
NKD Group GmbH is one of the largest textile retailers in Germany and Austria. The store network, which extends across Germany, Austria, Italy, Slovenia, Croatia and the Czech Republic, currently includes around 2000 stores. The data from the sales made there is collated at the company’s headquarters in Bindlach. The company has now commissioned the Hof University of Applied Sciences to conduct a detailed analysis of the data thus obtained
Data obtained in this way. At the Institute for Information Systems (iisys) at Hof University of Applied Sciences, Prof. Dr. Jörg Scheidt is in charge of the study: “In this project, we first create a very classic shopping basket analysis. We determine which items are typically purchased together. Customers of online stores know this very well, because they usually receive recommendations for further items after a purchase. These recommendations are based on such shopping cart analyses,” says Prof. Dr. Scheidt.
Association analysis reveals patterns
Technically, the shopping cart analysis is done by a special algorithm that combines elements and finds the relationships between products or behaviors. So-called association analysis is used to uncover typical shopping habits of customers based on their cash register receipts
Finally, each customer documents his or her personal shopping pattern through his or her receipt, which can also be clearly assigned through the receipt number. Knowledge of such correlations between groups of items is, of course, also interesting for chains or retailers with stores – think, for example, of the question of a sales-promoting placement of products in the store.”Prof. Dr. Jörg Scheidt
The outside-in view
“By working with Hof University of Applied Sciences, we are able to examine our data from different perspectives and angles,” explains Abraham Tadesse, Head of Merchandise Management at NKD Group GmbH. He continues
‘The Data Scientist team at the Institute for Information Systems (iisys) is working on interesting new questions in the process and developing unbiased hypotheses for us.’Abraham Tadasse, Head of Merchandise Management at NKD Group GmbH
Recognizing changes at an early stage
Based on the insights gained, the Hof University of Applied Sciences is creating different scenarios for NKD regarding the expected purchasing behavior in the face of changing conditions
“Elements such as the price structure, logistics or the value attitudes of customers are subject to permanent change. Data mining, i.e. the automatic evaluation of large volumes of data to predict certain regularities, can also help companies to prepare for these changes in good time,” says Prof. Dr. Jörg Scheidt.
Responding to the wishes of customers
For us, the cooperation with Hof University is naturally very exciting. We want it to give us further insights into the wishes and ideas of our customers so that we can continue to position our product range in the best possible way in the future.”Alexander Schmökel, Chairman of the Management Board of NKD Group GmbH
The project is initially planned for a period of three months.