Product Relationship Report

How do I read the Product Relationship Report and what insights can I gain from it.

Valentine Strunz-Happe avatar
Written by Valentine Strunz-Happe
Updated over a week ago

tl;dr

  • This report shows you the relationship of different products with each other based on your customer's purchasing behaviour.

  • In the report the relationship between a primary product (the Parent) to other products (the Children) is displayed by nesting a table containing the Children underneath the Parent.

  • Understanding this relationship allows you to increase the effectiveness of your cross-selling and store merchandising, show options to increase your Average Order Value and much more.

How does it work:

This report allows you to analyse the relationship of your products with each other based on your customer's purchasing behaviour.

The layout of the report might look a bit confusing at the beginning but it is very intuitive to read once you understand it.

Before we begin, you can select the product dimension based on which you want to analyse the relationships. You can pick between these three using the drop-down on top.

  • Product

  • Product Variant

  • Product Type

You are presented with a table showing you a bunch of products. Let's call it Overview Table. Before we talk about the metrics and what they mean, let's talk about the table functionality a bit more.

In order to create a relationship, (at least) two parties need to be involved. So how can you show the relationship with a one-dimensional list of products?

Simple. By adding another dimension. You might have noticed the little arrow next to the Products. Clicking it reveals a whole new table nested underneath it.

For the remainder of this post, let's call the primary Product (so the product where you clicked the arrow) the Parent. And all the products that show up in the table nested underneath that Parent its Children.

The nested table underneath shows the relationship of all the Children it contains with the Parent you clicked on. Let's call that table the Relationship Table.

Date Range

The selected date range is used to gather data for the parent/overview table.

However, you would not want to see the relationship based on purchases that occured in a limited time period.

Therefore, to generate the child/relationship table, we look at all orders that the customers in the overview table placed - before, during and after the selected dates ranges to calculate the relationship values.

What can I analyse:

Let's look at both tables in this report, the Overview Table and the Relationship table, and go over the metrics that they contain and what they mean.

Overview Table

This table gives an overview of how popular you different Products are with your customers and when they are mostly bought. Let's go over the metrics:

  • Customers - how many of your customers have bought the product at least once.

  • Orders - how many of your net orders contained this product at least once

  • Total Units Sold - how many net units of the product have you sold already.

  • Avg Units per Customer - Total Units Sold / Customer

  • Repurchase Rate - the percentage of the customers that bought the product, that bought it at least one more time.

  • First Order Rate - the percentage of orders from New Customers that contain this product

  • Repeat Order Rate - the percentage of orders from Repeat Customers that contain this product

Relationship Table

This is the real star of this report. While the Overview Table provided some context and orientation, the Relationship Table nested underneath shows you the relationship of each Parent product with its Children products.

Let's go over the metrics:

  1. Bought by the same customer - Percentage of customers that bought both, the child and the parent product. This could be in same order but also completely separate orders.

  2. Bought in the same order - Percentage of customers that bought the child and the parent product in the same order.

  3. Bought together in first order - Percentage of customers that bought the child and the parent product in the first order they made.

  4. Bought directly after - Percentage of orders that contained the child product, in an order placed by the same customer directly after he ordered the parent product.

  5. Bought after - Percentage of orders that contained the child product in orders of a customer after he ordered the parent product.

What can I use this for?

Obviously you can use this report to understand the relationship between your products. All good and well. But what actions and insights can you derive from that? Here are a few examples.

Identify Product you can bundle

Bundling up products allows you to drive up your Average Order Value and thereby your profitability. By understanding which products are already buying together or directly after each other, you are in a much better position to identify product bundles your customers will find attractive.

Refine your cross-selling and up-selling strategy

Instead of bundling product to drive up the AOV of a single order, you can also leverage the relationships shown in the report to design effective cross- and up-selling communication by advertising products to your customers you know, based on their existing purchasing behaviour, they are mostly likely to buy next.

Increase the effectiveness of your merchandising

The relationships can also be used when making merchandising decisions. When you know for example that your customers like to buy high heels and dresses together, you can create a collection that contains your newest products of that category and promote it to your customers.

Analyse impact of new product launches

Some product launches are designed to re-engage existing customers while other try to open you up to a new market segment. This report shows you whether you are accomplishing these goals. When a product launch you wanted to enter a new market segment with has a much higher number for "Bought by Repeat Customer" than "Bought by New Customers" in the Overview Table or is often being bought together with existing products, you know that you are not accomplishing your goals.

Find unusual relationship and dig deeper

Numbers don't always tell you the full story. But the can be very good in uncovering unexpected and strange relationships. These can then be a great topic of conversation when you talk to or survey your customers as understanding this unusual behaviour often leads to new insights about your customers.

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