Business Intelligence and FMCG Glossary: #decisiontree
Decision tree
What is the decision tree?
In the world of FMCG, the term “decision tree” is applied to the description of the process that leads the shopper from planning the purchase to the selection of a specific reference. Three (main) types of purchases can be differentiated:
- Specifically planned purchase: “I will buy Coca-Cola Zero in cans”
- Planned purchase, but final decision before the shelf: “I will buy soft drinks or a Cola or Coca-Cola and decide precisely what before the shelf”
- Impulse buying: “I had not planned to buy soft drinks, but the availability and / or the offer generate an impulse to buy 6 cans of Coca-Cola”.
Several studies agree on the fact that 70% of purchases are NOT planned in terms of brand and variety. That is why it is very important to understand how the shopper makes his decision to facilitate the purchase. The definition of decision trees for each category is the foundation of all the levers of action be it assortment, pricing, shelf management or the strategy in terms of promotions.
