Do you know how machine learning will transform your business?

Introduction

Is your business strategy still based on intuition? Do you make decisions based only on what has worked for you before? I’m sorry to say, but you’re wasting your business’ potential.

The modern world has infinite ways to collect and leverage data about customers, logistics, services, and data-driven decision-making has proven to be the best strategy to revolutionize how businesses operate. With all this data available, Machine Learning has become an essential tool for any company.

In this article we want to take step by step into the world of Machine Learning, and help you understand how it can elevate your retail game.?

What is machine learning:?

Let's start simple. Machine Learning is the process of teaching computers to learn from a data set.?

As humans, we have an amazing capacity to learn: we are constantly identifying patterns around us, and using these patterns to make predictions and guesses. For instance, we learn the “pattern” to what makes a person a person, and a horse a horse, and when facing a new subject, we can easily classify it.?

Let’s look at a more “complicated” example. You are looking for the perfect gift for your mom. When sorting through options, you bring to mind gifts she liked in the past, gifts she disliked, and things she recently mentioned she needed or wanted. With all this information you build a model of her preferences, and end up buying her a gift based on this analysis. She probably loved it!

You can now program computers to do this process. Machines “learn” when they look for patterns within a data set and use the resulting models to make predictions and analyze new data points.?

Computers need an enormous amount of data to figure out these patterns. So, if we can easily do it with two or three elements, why do we need machine learning? Humans are unable to run through millions of data points, because of time and cognitive resources. Businesses collect and store a lot of data, too much for the human eye. So machine learning is the best way to face all the information and gain valuable insights that guide decision-making processes.?

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What can you do with it?

Now that we have covered the basics of Machine Learning, we are going to explore its different types of algorithms and their uses.

Supervised learning

Supervised learning sorts data and finds correlations between previously defined labels, or variables. It can tell you whether there is any connection between the variables you chose. With this type of model, you can build a binary or multi-class classification or create a regression model that predicts the next values.

Unsupervised learning

Unsupervised learning does not count with previous labels, instead its algorithms run through unlabeled data and identify meaningful connections. WIth unsupervised learning you can create clusters of data based on similarity, detect anomalies or unusual data points in the set and identify sets of data that frequently occur together?

Reinforcement learning

Reinforcement learning focuses on multistep processes, in which the computer chooses an option on each step and receives feedback on whether it was the correct one. Based on this feedback, the machine learns the proper way to fulfill each step. A goal is established, and these machines figure out the best way to reach it.?

How can it be useful for your business?

All right, so all this tech-talk can be interesting, but let’s cut to the chase. Finding patterns and making predictions sounds cool, but what does this mean in practical terms for your retail business??

Customer Experience

Improving the customer experiences is essential for improving a business: a happy and interested customer means more sales and higher income. Luckily for you, Machine Learning has many ways to boost your customer experience.

Segmentation and personalization for the marketing process depend exclusively on finding the right patterns of your customers interests and needs. You can use Machine Learning to dive into your customer’s history and get to know your audience faster and better than ever.

Machine Learning is also the basis for any recommendation engine. Based on what customers have bought before, your business can easily predict the next data point, that is, the next product they will buy. This continues to strengthen your personalization efforts, making your marketing campaigns more effective.

You can even predict and avoid the churn! By making models that identify variables related to customers abandoning your service or brand, you can make the changes necessary to keep them and build up their loyalty.?

Finally, your attention services will also improve when implementing Machine Learning. Thanks to its technology, you can identify the most common questions or complaints and create automated interactive solutions and virtual assistance for your customers.?

Internal Logistics

Making your internal processes more effective can end up saving you tons of time and money. You can use Machine learning to leverage all of your logistics data and find touchpoints and manual tasks you can modify to maximize efficiency.

For instance, retail businesses use Machine learning to make anticipatory shipping protocols and to plan smarter routes. The models produced by the algorithms can also help you make sure you never run out of stock, without restocking recklessly.?

Takeaway?

The future of retail depends on implementing Machine Learning. Patterns and predictions are the base for all of our decisions, and in order to make the correct ones you need the algorithms to back you up.?

Now, choosing the best type of learning and finding out how to navigate your data can definitely still be complicated. For instance, reinforcement learning can be ideal to plan out how to allocate resources, while unsupervised learning will give you insights about customers that abandon your services.?

At Strata Analytics we count with expert consultants that will guide you through the machine learning process and will help you pair up the algorithm with your business goals.?

Contact us now, and optimize your business with Machine Learning