Retail Enterprise Cross-sell Products Portfolio Optimization And Research

As market competition becomes more intensified, retail enterprises are looking forthe new profit growth point to achieve competitive advantage. Data mining is a processof extracting valid, previously unknown, comprehensible, and actionable informationfrom large databases. It has been used in decision support and marketing strategy forenterprises. Cross-selling is an effective way to satisfy the need of customers andpromote sales. It is a process to analyze the customer purchase behavior, reveal therelations among products and design personalized marketing methods. Cross-sellingbenefits both customers and enterprises. Association rules mining is an importanttechnique in data mining, and it can identify the potential cross-selling opportunitieseffectively. A great deal of research is focused on algorithms of association rules, buthow to optimize the combination of cross-selling products by using association rulesdeserves further investigation. To make cross-selling play a greater role in retailenterprise, this paper introduced a practical way to analyze the retail enterprise’s databasebased on data mining technology, constructed a sales promotion participation model anda cross-selling model, which can be used not only for customer groups but also forindividual customers. The result provides valuable reference for solving the practicalproblems and the development of research in related fields.In this paper, the method of Recency, Frequency, Monetary (RFM) Analysis wasoptimized firstly, which is the basis for constructing the sales promotion participationmodel. This model bring forward a customer segmentation method based on customerparticipation enthusiasm in sales promotion. Therefore the retail enterprise can chooseactive customers as the target of cross-selling by using this model. After that, this paperfocused on the association rules mining which was used in the sales data analysis, andtried to discover the relations among products. On this basis, the concept of cross-sellingcoefficient was developed, taking per customer transaction and gross profit rate intoconsideration. It is able to provide decision support when choosing the combination ofcross-selling products. This method has achieved good result.