Discover the power of skyrocketing your eCommerce sales – Talk to an expert

Market Basket Analysis

What do you understand about market basket analysis?

Market basket analysis is a data mining technique used to identify associations and relationships between products or items frequently purchased together by customers. Market basket analysis is a data mining technique used by retailers to increase sales by better understanding customer purchasing patterns. It involves analyzing large data sets, such as purchase history, to reveal product groupings, as well as products that are likely to be purchased together.

Utilization Of market basket analysis?

Market basket analysis applications include cross-selling recommendations, product bundling strategies, and inventory optimization to enhance customer satisfaction, increase sales revenue, and maximize basket size and profitability. By leveraging market basket analysis, organizations can gain insights into customer preferences, behavior, and buying habits, enabling targeted marketing initiatives, personalized promotions, and dynamic pricing strategies that resonate with customer needs and preferences.

Market basket analysis In academia 

Market basket analysis is studied within the fields of retail analytics, consumer behavior, and business intelligence. Researchers investigate market basket analysis methodologies, including association rule mining, support-confidence analysis, and frequent pattern discovery, to understand consumer purchasing patterns and optimize product assortments, pricing strategies, and promotional campaigns. Academic studies on market basket analysis also explore its scalability, interpretability, and integration with other analytics techniques, such as customer segmentation, sentiment analysis, and demand forecasting, as well as best practices for data preprocessing, rule generation, and actionable insights extraction to drive business value and competitive advantage in retail and e-commerce environments.

Also, learn about Marketplace.

A marketplace is any location, whether in person or online that facilitates the exchange of goods between buyers and sellers. A marketplace business model differs from that of a retail store because transactions happen in both directions, not just one.

Explore other related terms only on

Frequently Asked Questions On Market basket analysis

Why do we need market basket analysis?

Market basket analysis can increase sales and customer satisfaction. Using data to determine that products are often purchased together, retailers can optimize product placement, offer special deals and create new product bundles to encourage further sales of these combinations.

What algorithm is used in market basket analysis?

The Apriori Algorithm is widely used and is well-known for Association Rule mining, making it a popular choice in market basket analysis. AI and SETM algorithms consider it more accurate. It helps to find frequent itemsets in transactions and identifies association rules between these items.

What are the cons of market basket analysis?

It provides information on which products are frequently purchased together, but it does not provide information on why these products are purchased together. This can limit the usefulness of the analysis for certain applications. It relies on customer data, which can raise privacy concerns.

Related Glossary

Request A Demo