This data analysis is based on a dataset sourced from the UCI archives. I categorized the products sold into various groups and conducted detailed analyses, including RFM Analysis, Cohort Analysis, and Sales Forecasting. Below are the key findings:
Total Revenue (Dec 2010 - Dec 2011): $8,278,519 Average Order Value (AOV): $392,732 Top Selling Product: PAPER CRAFT, LITTLE BIRDIE from the stationery category Returns and Churn: Negative revenue values are assumed to be returns, which contribute to an increased churn risk. The churn rate is calculated at 2.26%, though churn is not explicitly tracked for this dataset. Monthly Sales Trends : Revenue saw growth in Q1, remained stable in Q2, and began to decline in Q3. Sales Forecasting : Projections indicate a steady sales increase through 2012.
Customers are divided into three categories based on spending behavior:
Medium Spenders: Customers spending between $232 and $1,994. Low Spenders: Customers in the bottom 20%, spending less than $232.50 per transaction. The majority of the customers are Medium Spenders, with 488 classified as High Spenders.
High Churn Risk (RFM Score: 1-6): Customers: 669 Key Point: Low engagement and high likelihood to churn. Immediate intervention needed via retention strategies.
Medium Churn Risk (RFM Score: 7-10): Customers: 20,041 Key Point: Largest group, at risk of becoming inactive. Regular engagement and monitoring can prevent churn.
Low Churn Risk (RFM Score: 11-15): Customers: 13,208 Key Point: High engagement and least likely to churn. Maintaining relationship through loyalty programs and personalized marketing will help retaining the customers.
Key Insights: Customer Distribution: 59% are medium-risk, 39% are low-risk, and 2% are high-risk. Action Plan: Re-engage high-risk customers, focus on retaining medium-risk customers, and reward low-risk customers.
Dec 2010 Cohort: Started with 28,013, dropping to 3,537 by month 13. Retention fluctuated but ended at 16%. Jan 2011 Cohort: Began with 12,050, dropping sharply after a peak at 120%. Feb-May 2011 Cohorts: Show smaller counts with varying retention rates, peaking at 183% (May) before declining. Late 2011 Cohorts: Smaller sizes, with sharp declines in retention. Observation: Early cohorts show better retention, while later cohorts see sharp drops, indicating a need for improved retention strategies.
2011 Actual Revenue: Peaks in September, October, and November with significant fluctuations. 2012 Forecast: Linear: Steady increase from $382K in January to $998K in December. Seasonal:* Similar upward trend, reaching $1M by December, reflecting historical seasonal peaks. Key Trend: Both forecasts predict growth, with seasonality accounting for expected revenue spikes in the last quarter.
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