How did the Diaper beer story begin?

Tesco the British multinational grocery and general merchandise retailer looked at their data 20 years ago. They tracked demographics and spending behaviors with their loyalty cards program. Evidently, they popped a most unexpected correlation: sales of diapers and beer. They found that young fathers would make a late-night run to the store to pick up Pampers and get some Bud Light while they were there.

They study this phenomenon widely and found its reason is very obvious. Dads with new borns cannot go out to pubs to socialize with friends (me including). So they buy more beers so that they can drink at home. The findings were that young men, shopping in Fridays between 5 pm and 7 pm, who purchased diapers were most likely to buy beer. So, Tesco placed beers next to diapers and beer sales shot up!

Harried dads rewarding themselves with impulse buys!

How NetSuite benefit from the phenomenon

NetSuite realized that this kind of Product Affinity Analysis is the key technique used by marketers to uncover the correlation between their selling items. Oracle NetSuite has a very intuitive Upsell Manager, which can automatically suggest products or services a customer would be likely to consider based on that customer’s purchasing history. It works by looking for combinations of items that occur together frequently in transactions. It allows retailers to identify relationships between the items that people buy.

The Upsell Manager enables you to maximize your sales and marketing efforts by determining which items present a good upsell opportunity and which customers you should target. This process is also known as product affinity analysis. The Upsell Manager searches your customer transaction histories to recommend possible upsell items and categories of items. These upsell items and item categories are chosen based on their correlation. Correlation is a measure of how often two items are purchased by the same customer.

Upsell Real example

For example, Wolfe Electronics uses NetSuite’s Upsell Manager to determine that 30% of customers that bought desktop computer systems also purchased store warranties on those machines. Wolfe decides to create a list of customers that have purchased desktops that have not yet purchased warranties in the hopes of upselling store warranties. In the netsuite upsell manager, you will benefit from the filtering criteria. combinations of products that frequently co-occur in transactions. For example, maybe people who buy flour and eggs, also tend to buy sugar as they are planning to make a cake.

You can use this information to better design a better Store layout by placing the items that co-occur together close to other, like Tesco did in the diapers and beer. You can also craft a Marketing campaign with high ROI for example encourage your customers to spend more on a related item to their shopping basket. Online retailers can use this data from NetSuite to better place the content items on their media sites, or products in their catalogue and deliver specific targeted marketing campaigns for example emailing customers who bought products specific products with other products or offers that are likely to be interesting to them.

You can contact me directly if you need any clarification or support regarding NetSuite upsell management process.