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| Friday, August 29, 2014 |
| What is data mining? |
Have you ever noticed that when you search for some item, etc such as a laptop on Best Buy or other sites, somehow the ad for that laptop appears on other sites you may visit? How does that happen?
Similarly, when you purchase a book on Amazon.com , Amazon's recommendation engine suggests other related books? How?
Well, it's all thanks to data mining - or as many people call it these days - predictive analytics.
Data mining is actually a broad term referring to the process of using statistical analysis, database technology, modeling techniques, and machine learning to analyze vast amounts of data in an
automated fashion. The purpose of data mining or predictive analytics is to identify any patterns that you may not know of. Basically, you want to see if the historical data you have about
customers, vendors, etc has any predictive information in it. For example, companies like Walmart, Amazon.com or Best Buy have huge amounts of customer data in their data warehouses. Data such as:
- Where their customers live
- What products they tend to buy
- How much they spend on different categories and so forth.
Based on this data, using various data mining techniques, these companies try to identify what different customers are likely to buy and so forth. They can accordingly information about the
products these customers are likely to buy, send coupons and other offers to their customers. All this is made possible, thanks to data mining. While not 100% perfect, data mining can increase
the likelihood of what a company is trying to accomplish - whether it's to increase customer retention or identify products most likely to sell during upcoming holiday season and so forth.
Here's a good video on what is data mining:
Note: the posts on this blog may contain affiliate links. Please also see Disclosures and DisclaimerLabels: data mining, predictive analytics, videos |
posted by Rick @ 8:33 PM
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