Prescriptive analytics is basically the act of suggesting various suitable approaches in a probable situation, estimated by predictive analytics, on the basis of insights provided by descriptive analytics.
The data needed to do the analysis is taken from datasets of Big Data.
According to predictions made by IDC, a market intelligence company, the data in the world will grow up to 175 zettabytes, which they explained as data stored on DVDs and stacked, the stack “long enough to circle the earth 222 times”, and if a single person attempted to download that data on average internet speed, it would take 8.1 billion years, and even if every person in the world helps with the download, it would still take 81 days.
Every second data is being created and stored. But, data is still raw data that needs to be analyzed to strain meaningful insights out of it. That is where Analytics comes in the picture. Prescriptive analytics helps in suggesting and formulating strategies and plan of action which can be implemented when a problem arises.
Let us start with the marketing arena to venture on.
Marketing – The problems in the Marketing Sector can arise in the 4 P’s + 3 extended P’s,
Data-driven marketing campaigns can prove to be beneficial, but predictive analytical data-driven marketing campaigns can boost its rate of success. By taking advantage of various prescriptive analytics software, marketing campaigns can be designed to make the campaign more beneficial and relevant.
Making people aware and desire your product or service is the main essence of marketing. For that, the know-how of what’s going on in the market and how it influences the mindset of your customers is very important. After that comes strategizing. What to do if the climate changes and the market falls sick? You already have a ‘prescription’ for your campaign. When a marketer uses Prescriptive analysis, he/she already has a plan ready to implement when things change.
Supply Chain – How is prescriptive analytics changing the nature of the supply chain? Let’s start with the basics.
There is a lot of data that is collected and stored while planning the activities involved in moving a product or a service, from supplier to consumer. But, for a smooth and fruitful movement, it is important to make decisions based on analytics. If you want a certain outcome, what are different actions that you can take, this is taken care of by prescriptive analytics.
Let’s say, predictive analytics predicts that the sales might decrease in the coming month, then, the prescriptive analytics might suggest
- To recalculate the EOQ and order lesser stock, or,
- To keep the same level of stock (only for non-perishable items) and reduce the reorder quantity for the month after, or,
- To modify the marketing campaign to gain more traction to increase the sales.
Up-selling, cross-selling, adding on the technological resources, cost-cutting, brand awareness, smooth transportation, all this can be achieved with the help of business intelligence and several of its fields.
Retail – Having a competitive edge over others in the industry helps in sustaining and growing in the market.
For example, Amazon’s new cashier-less store- Amazon Go is the current big buzz in the Retail Industry. It allows its customers to buy items from the store and leave without standing in the long queues to pay for them. This store charges them directly on their Amazon account. All this included long hours spent on Machine Learning, Business Intelligence, and Analytics.
Personalizing customer experience based on past behavioral patterns is the current need of the market. A shopper who is looking at a Jacket online is shown an entire outfit based around a jacket. Someone looking for makeup online is given the assistance to see how it will look on them by just using their camera. Customer satisfaction is important, but nowadays customer delight has become more significant. How to make it happen? The answer is prescriptive analytics.
All in all
We can easily say from the observations above that Prescriptive analytics is slowly changing.
Prescriptive Analytics can help an industry survive possible hardships coming its way while helping it create various opportunities and pathways for innovation and advancement. It is paving the way for all types of industries- be it healthcare, retail, finance, production, transport, IT, etc. to overcome several barriers.