Presentation On

Predictive Model for Retail Sales

using Machine Learning
 KAVIKULGURU INSTITUTE OF TECHNOLOGY AND SCIENCE
Ramtek, Nagpur, Maharashtra, India – 441106
(Managed by Vodithala Education Society, Hyderabad)

DEPARTMENT OF COMPUTER TECHNOLOGY

Group Members
Mr. Saurabh Ghute (CT21099)
Mr. Shreyansh Kumbhare (CT21067)
Ms. Yeshwari Bhure (CT21025)
Mr. Ravikant Chandewar (CT21035)
 Overview
❑ OVERVIEW
• Project Aim
• Project Objective
• Introduction
• Prior Art
• Literature Review
• Proposed Approached & Architecture
• Tools and Technology
• Conclusion
• Future Scope
• Reference
 ❑ INTRODUCTION
❑ Accurate sales predictions are vital for effective
marketing strategies, and overall operational efficiency of
future sales.
❑ This study will explore the effectiveness of various
machine learning algorithms including linear regression,
random forest, time series models, and deep learning in
predicting sales.
❑ Leveraging large datasets and advanced data mining
technique can uncover hidden patterns and relationships
within the data.
❑ The model gives benefit for companies by understanding
what drives sales, they can better manage their marketing
and production.
❑ PROJECT AIM

To design sales predictive model using machine

learning techniques and algorithm for forecasting
future sales based on historical data, trends, and
various influencing factors.
 ❑ PROJECT OBJECTIVE

The objective of this project is to To create a robust and accurate model that
develop a predictive model for retail can lead to customer satisfaction, enhanced
01. sales using linear regression and random 02. channel relationships, and significant
forest model and Xgboost model. monetary savings.

Developing accurate sales prediction Applying data mining techniques like

classification, association, prediction and
03. model to avoid over-forecasting and
under-forecasting by using machine 04. clustering helps to increase predication
learning algorithms. accuracy of sales.
 ❑ PRIOR ART
Patent Title of Patent Existing Solutions (Abstract of Patent)
Application No. ART
US 9.202,227 B2 SALES PREDICTION This study explores the development and implementation of various sales prediction
SYSTEMS AND systems and methods, focusing on their accuracy, efficiency, and practical application in
METHODS real-world scenarios. This study investigate a range of machine learning models and
statistical techniques, including Linear Regression, Decision Trees, Random Forest,
Gradient Boosting, Support Vector Machines, ARIMA, SARIMA, and Long Short-Term
Memory (LSTM) networks. These models are applied to a comprehensive dataset
comprising historical sales data, promotional activities, seasonal effects, and economic
indicators from a retail company.
US 2014/0067470 PREDICTIVE AND This study explores the development and implementation of advanced analytics systems
A1 PROFILE LEARNING that combine predictive modelling and profile learning to automate and enhance sales
SALES AUTOMATION processes. it utilizes clustering techniques like K-Means and DBSCAN (Density-Based
ANALYTICS SYSTEM Spatial Clustering of Applications with Noise) for customer segmentation and profile
AND METHOD learning, enabling more personalized marketing strategies. By apply these methods to a
rich dataset from a retail company, which includes historical sales data, customer
demographics, purchase behaviour, promotional activities, seasonal effects, and
economic indicators.
US 7.689,456 B2 SYSTEM FOR Accurately predicting sales lift and profit is critical for strategic decision-making in
PREDICTING SALES LIFT product management and marketing. This study introduces a novel system designed to
AND PROFIT OF A predict the sales lift and profit of a product using historical sales information. Leveraging
PRODUCT BASED ON advanced machine learning algorithms and cloud computing infrastructure, the system
HISTORICAL SALES aims to provide precise forecasts that can guide pricing strategies, promotional activities,
INFORMATION and inventory management.
 ❑ LITERATURE REVIEW
Title of Paper Details of Literature Identified for Project
Publication with
Date and Year
Predictive February 2023 In this paper operation performed predictive analysis of retail sales of Citadel
Analysis of POS dataset, using different machine learning techniques. Implemented
Retail Sales different regression (Linear regression, Random Forest Regression, Gradient
Forecasting using Boosting Regression) and time series models (ARIMA LSTM), models for
Machine sale forecasting, and provided detailed predictive analysis and evaluation. The
Learning dataset used in this research work is obtained from Citadel POS (Point Of
Techniques Sale) from 2013 to 2018 that is a cloud base application and facilitates retail
store to carryout transactions, manage inventories, customers, vendors, view
reports, manage sales, and tender data locally.

Benchmarking of January 2019 In this research, we employ a diverse set of machine learning models and time
Regression and series analysis techniques, including Linear Regression, Decision Trees,
Time Series Random Forest, Support Vector Regression (SVR), Gradient Boosting,
Analysis SARIMA (Seasonal ARIMA), networks. The dataset used for this study
Techniques for comprises historical sales data from a retail company, including features such
Sales Forecasting as past sales, promotional activities, seasonal effects, and economic indicator
Forecasting seasonals and June 2004 Forecasting seasonal patterns and trends is crucial for effective business
trends by exponentially planning and resource allocation. This study focuses on using
weighted moving averages Exponentially Weighted Moving Averages (EWMA) to forecast
seasonals and trends in time series data. EWMA is a powerful tool for
smoothing time series data and making short-term predictions by
assigning exponentially decreasing weights to past observations. By
analyzing historical data, we aim to provide accurate and reliable
forecasts of future trends.
Drought forecasting in October 2016 This study advances drought modelling using multivariate adaptive
eastern Australia using regression splines (MARS), least square support vector machine
multivariate adaptive (LSSVM), and M5Tree models by forecasting SPI. . MARS model
regression spline, least incorporated rainfall as mandatory predictor with month (periodicity),
square support vector Southern Oscillation Index, Pacific Decadal Oscillation Index and
machine and M5Tree model Indian Ocean Dipole, ENSO Modoki and Nino 3.0, 3.4 and 4.0 data
added gradually.
Market Basket Analysis: July 2016 Market Basket Analysis(MBA) also known as association rule learning
Identify the changing trends or affinity analysis, is a data mining technique that can be used in
of market data using various fields, such as marketing, bioinformatics, education field,
association rule mining nuclear science etc. The main aim of MBA in marketing is to provide
the information to the retailer to understand the purchase behavior of
the buyer, which can help the retailer in correct decision making.
 ❑ PROPOSED APPROACH
➢ The proposed approach begins with collecting and preprocessing historical sales data from
various sources, including point-of-sale systems and external factors like economic
indicators.

➢ Then performing exploratory data analysis (EDA) to uncover trends and correlations.

➢ Next, selecting and training suitable machine learning models, such as Linear Regression,
and Random Forests by optimizing them through hyperparameter tuning.

➢ The best-performing model will be deployed in a production environment with continuous

monitoring and updates to ensure accuracy by avoiding over-forecasting and under-
forecasting.

➢ Finally, predictive model is ready for stack holders.

❑ USE CASE DIAGRAM
 ❑ TOOLS AND TECHNOLOGY

TOOLS TECHNOLOGY
-Anaconda Programming Languages:
-Jupiter Notebook -Python
-Vs code -r
Libraries: Pandas, NumPy, SciPy
Kaggle Datasets: Retail Sales
Forecasting
 ❑ CONCLUSION
➢ The project predictive model for retail sales using machine learning
underscores the transformative potential of advanced analytics in the retail
sector.
➢ This project, aims to harness machine learning algorithms like linear regression
and random forecast model to forecast sales, personalize marketing efforts, and
enhance overall business strategy.
➢ Unless an accurate forecasting model is built, different problems are inevitable.
Therefore, building this kind of prediction models for sales forecasting has a
high priority of this project.
➢ This experiments show that the regression techniques provide higher
performance and accuracy compared to the time series analysis techniques to
predict sales data.
 ❑ REFERENCES
CATAL, C., KAAN, E., ARSLAN, B. & AKBULUT, A. 2019. Benchmarking of
regression algorithms and time series analysis techniques for sales forecasting.
Balkan Journal of Electrical and Computer Engineering, 7, 20-26.

HOLT, C. C. 2004. Forecasting seasonals and trends by exponentially weighted

moving averages. International journal of forecasting, 20, 5-10.

KAUR, M. & KANG, S. 2016. Market Basket Analysis: Identify the changing
trends of market data using association rule mining. Procedia computer science, 85,
78-85.

Zhao, J., Tang, W., Fang, X., Wang, J., Liu, J., Ouyang, H., ... & Qiang, J. (2015,
September). A Novel Electricity Sales Forecasting Method Based on Clustering,
Regression and Time Series Analysis. In Proceedings of the 2015 International
Conference on Artificial Intelligence and Software Engineering.
Thank you!