Updated September 22, 2023
The Product Association dashboard displays product association data generated by the Apriori algorithm. This algorithm identifies common product pairs that customers have purchased over the last 365 days, even if the products were not ordered simultaneously.
Understanding Product Associations offers several benefits:
- Personalized Recommendations: By pinpointing items frequently bought together, online retailers can offer tailored product suggestions, enhancing the shopping experience and amplifying sales through cross-selling and up-selling techniques.
- Dynamic Bundling: Retailers can formulate online bundles or provide discounts on combined purchases, enticing customers to purchase more. For instance, if a smartphone and a specific case are often bought together, a bundle deal can elevate the average order value.
- Inventory Forecasting: Recognizing product associations enables businesses to predict demand with greater accuracy. When sales of one product surge, its associated products are also likely to experience increased demand, facilitating improved inventory management and minimizing the chances of stockouts.
Support tells the share of the customers who bought both products, i.e. greater support means that the association rule is applicable in more cases.
Confidence is the likelihood that product B is bought given that product A is bought.
Lift is the ratio of the observed support (likelihood that both products are bought) to the probability of both products being bought as if there was no association between the products. For example, value 5 suggests that the products A and B are bought together 5 times more often than they would be bought if the sales of the products was perfectly independent of each other.
Product Associations Dashboard Elements
TOP 25 Product Association Rules
This table displays the top 25 product association rules sorted by lift (default). You can change the sorting by clicking the column title. Source: Shopify
Product Rule's Confidence by Support (Color by Lift)
This visualisation aids in identifying intriguing product associations. By clicking plot, details of product pairs can be seen.
Typically, the most compelling product associations are located in the upper right corner of the scatter plot, as these rules boast both high support and confidence.
Conversely, the upper left corner can pinpoint less common product pairs with high confidence, meaning there's a high probability that product B is purchased when product A is bought. Data points darken with increasing lift, signifying a more robust association between the products. Source: Shopify.