Skip to main content

Prescriptive analytics put powerful recommendations into the category manager’s hands

To keep up with the rapid changes of today’s omnichannel world, retailers are turning to prescriptive analytics to improve pricing, promotions and assortment to drive revenue growth.

In the dawn of the big data era, retailers hired data scientists who used descriptive analytics to understand the causes of previous successes and failures to help improve future pricing, promotions and assortment. Today, data scientists at many big retailers use predictive analytics to get directionally accurate forecasts for a handful of scenarios. But since these analyses focus on past results and don’t provide detailed recommendations, they can’t help retailers make the quick changes required in today’s omnichannel world and especially in stores to maximize revenues and profits.

We’re now entering the age of prescriptive analytics. Machines can now do more than crunch mountains of data—they can also recognize patterns humans can’t, learn from their mistakes and make specific, real-time recommendations that people without doctorates can understand.

Using the new approach, retailers can tap into in-house and external data to identify the handful of SKUs with the biggest impacts on basket size and profit and then make simple weekly or even daily recommendations to category managers to adjust pricing, promotions and assortment in each brick-and-mortar and online store to boost revenues, profits and customer loyalty. In fact, we expect prescriptive analytics to raise same-store sales by 2-5%.

Please complete the form below to DOWNLOAD A COMPLIMENTARY COPY OF this content.

For more information, please contact us.
*
*
Please provide a business email address
*
*
*
*
*

McKinsey & Company is committed to protecting your information. Your information will be used in accordance with the applicable data privacy law, our internal policies and our privacy policy. As McKinsey is a global organisation, your information may be stored and processed by McKinsey and its affiliates in countries outside your country of residence, but wherever your information is processed, we will handle it with the same care and respect for your privacy.