Retailers can now use predictive analytics to be ahead of the competition.

FREMONT, CA: Data analytics continues to be a hot topic across industries, but predictive analytics could be the aspect with the significant potential payoff for retailers. It couples data mining, statistical modeling, and machine learning to take historical data and use it to identify the likelihood of future outcomes. This leverages past patterns to predict things like customer behavior or when an item will run out for retailers. It’s a turning point for the retail sector that has spent decades collecting information on its buyers from almost every angle. Here are the top use cases of predictive analytics in retail marketing.


Understanding customer behavior and coupling it with consumer demography is the primary step in deploying predictive analytics. Retailers can leverage it to give targeted and highly customized offers for specific shoppers. Such insights combined with predictive analytics now offer merchants the option to make highly personalized offers to customers at a granular level.

Supply Chain Management

One area which is neglected is the back-office functions. Poorly maintained inventory is a retailer’s nightmare. Supply chains require to be optimized to increase operational efficiency. Predictive analytics assists in answering questions like what to store, when to store, and when to discard. Stocking up slow-moving products or running out of fast-moving ones are both problems. Such insights streamline performance and reduce costs. Thus, predictive analytics removes this uncertainty.

Customer Segmentation

A customer’s journey tracks their experience. It begins when the customer first makes contact with a brand and ends with a purchase order. The journey traces the entire process of engagement. Data-driven insights can aid retailers in understanding customer’s profiles and history across channels. Brands can monitor customer activity to decide who the best customers are and how they and good customers behave and react to the marketing.

Campaign Management

Predictive analytics can be leveraged to craft a marketing campaign strategy. The more retailers know about their customers, the more targeted the messaging can be. Data-based decisioning mitigates how many decisions are based on instincts or guesswork. Predictive analytics can find the channels and times needed to increase your marketing spend and resources.