Association rule
An association rule is a statement of the form "if X, then Y", where X and Y are
sets of items (called itemsets). For example, "if a customer buys diapers, then
they are likely to buy beer".
Association rules are an unsupervised learning method. This is a descriptive,
not predictive, method often used to discover interesting relationships hidden
in a large dataset. The disclosed relationships can be represented as rules or
frequent item sets. Association rules are commonly used for mining
transactions in databases.
Here are some possible questions that association rules can answer:
Which products tend to be purchased together?
Of those customers who have purchased this product, what other similar
products do they tend to view or purchase?
Association rule mining is a technique used to identify patterns in large data
sets. It involves finding relationships between variables in the data and using
those relationships to make predictions or decisions. The goal of association
rule mining is to uncover rules that describe the relationships between
different items in the data set.
For example, consider a dataset of transactions at a grocery store. Association
rule mining could be used to identify relationships between items that are
frequently purchased together. For example, the rule "If a customer buys
bread, they are also likely to buy milk" is an association rule that could be
mined from this data set. We can use such rules to inform decisions about
store layout, product placement, and marketing efforts.
Association rule mining typically involves using algorithms to analyze the data
and identify the relationships. These algorithms can be based on statistical
methods or machine learning techniques. The resulting rules are often
expressed in the form of "if-then" statements, where the "if" part represents
the antecedent (the condition being tested) and the "then" part represents the
consequent (the outcome that occurs if the condition is met).
Association rule mining is an important technique in data analysis because it
allows users to discover patterns or relationships within data that may not be
immediately apparent. By identifying associations between variables,
association rule mining can help users understand the relationships between
different variables and how those variables may be related to one another.
Overall, association rule mining is a valuable tool for extracting insights and
understanding the underlying structure of data.
Use Cases of Association Rule Mining:
Association rule mining is commonly used in a variety of applications, some
common ones are:
Market Basket Analysis
One of the most well-known applications of association rule mining is in market
basket analysis. This involves analyzing the items customers purchase together
to understand their purchasing habits and preferences.
For example, a retailer might use association rule mining to discover that
customers who purchase diapers are also likely to purchase baby formula. We
can use this information to optimize product placements and promotions to
increase sales.
To learn more about Market Basket Analysis, check out our Market Basket
Analysis in R tutorial.
Customer Segmentation
Association rule mining can also be used to segment customers based on their
purchasing habits.
For example, a company might use association rule mining to discover that
customers who purchase certain types of products are more likely to be
younger. Similarly, they could learn that customers who purchase certain
combinations of products are more likely to be located in specific geographic
regions.
We can use this information to tailor marketing campaigns and personalized
recommendations to specific customer segments. Discover more about this
topic in our introduction to customer segmentation in Python tutorial.
Fraud Detection
You can also use association rule mining to detect fraudulent activity. For
example, a credit card company might use association rule mining to identify
patterns of fraudulent transactions, such as multiple purchases from the same
merchant within a short period of time.
We can then use this information can to flag potentially fraudulent activity and
take preventative measures to protect customers. In our Data Sciece in
Banking: Fraud Detection blog, you can learn more about how the process
works.
Social network analysis
Various companies use association rule mining to identify patterns in social
media data that can inform the analysis of social networks.
For example, an analysis of Twitter data might reveal that users who tweet
about a particular topic are also likely to tweet about other related topics,
which could inform the identification of groups or communities within the
network.
Recommendation systems
Association rule mining can be used to suggest items that a customer might be
interested in based on their past purchases or browsing history. For example, a
music streaming service might use association rule mining to recommend new
artists or albums to a user based on their listening history.
With our recommendation systems in Python tutorial, you can learn more
about how to build various models that perform this function.
