Question

What are the three types of analytics? Define them in your own words and provide a current real-world example of each.

*I know what the three are ( descriptive, predictive and prescriptive) and I have already defined them, but what I need help with are the current real-world examples. Thanks.

Answer 1

Descriptive: Descriptive analytics assists business to understand what happened in the past; and the relationship between products and customers and the motive is to gain an understanding of what approach to take in the future. The best example to explain descriptive analytics are the results that an organisation gets from the web server through Google Analytics tools. Such outcomes assist to understand what actually happened in the past and validate whether a promotional campaign was successful or not based on basic parameters such as page views. Another example would be Netflix that uses descriptive analytics to know correlations among different movies that subscribers rent and to improve their recommendation engine they used customer data and historic sales.

Prescriptive: Prescriptive analytics is the final stage in understanding the organisation; however it is still in its infancy. It makes an attempt to quantify the future effect of decisions in order to advise on possible outcomes before the decisions are actually made. For example, a simple aggregate analytic of the current sales for the day can help into pricing logic in other applications to reduce or increase the price. Real-world example is the self-driving car of Google that makes decisions based on several predictions and future outcomes. Such cars are required to anticipate on what’s coming and what the effect of a possible decision will be before they make that decision to ensure to prevent an accident.

Predictive: Predictive analytics provides business with actionable insights based on data. It gives estimation about the likelihood of a future outcome. The best example where predictive analytics is the Colleen Jones who applied predictive analytics on the FootSmart (a niche online catalogue retailer) for it's content marketing product. On analyzing the data around increased the visibility of search engine, FHRC was found to assist FootSmart reach more of the right kind of target customers. Also the best example where predictive analytics find large application is in producing the credit score. Credit score assists the financial institutions on deciding the probability of a customer paying credit bills timely.