Data Mining and Knowledge Discovery in Business Today


The Use of Data Mining and Knowledge Discovery in Business Today


We have all contributed to a business’s data base whether we realize it or not.  Some contributions are obvious, for instance, when a cashier asks for your zip code at the register.  All of the zip codes are entered into a company’s data base for further use.  Some actions, however, are not so obvious, such as the tracking of customer’s movements through their cell phone wifi connections through the store.  While both of these contribute to a company’s data base, the information is useless until it is mined and knowledge discovered from it.

Let’s look at the zip code entry first.  What good does it do a retailer like Lowe’s to have a data base full of thousands of zip codes?  It actually does a lot of good.  For example, if Lowe’s is trying to decide where to build a new store, now they have an idea of where their shoppers are traveling from to shop in one of their stores.  If Lowe’s sees a need for another store in Rowan county, the zip codes are used to see where it would be most beneficial to build.  When all of the zip codes entered are from east Rowan, it would be unprofitable to spend millions of dollars and build a store in west Rowan.  The knowledge discovered by mining the zip code data is where the next store should be built.

Next, we’ll look at the data gathered by tracking customer’s movements through their cell phone wifi around the store.  In sticking with Lowe’s, let’s assume 90% of customers enter the store and immediately head to the middle aisle of the store to walk from seasonal to lumber.  Lowe’s can mine this data and gain the knowledge that 90% of their customers are seeing the end caps on this aisle first.  In turn, the corporate office could go to their vendors with this information and convince them to spend more money by renting said end caps for their product as opposed to the end caps by the front registers.  With the data gathered, Lowe’s can scientifically prove that more customers will see the middle aisle end cap products than any other end caps first and foremost.

In conclusion, we all contribute to a company’s data base, whether we are aware or not.  While millions of bytes of data are gathered, the data is ultimately useless unless data mining and knowledge discovery are performed.

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