FactorPrism®
Use Case

The Product Category Surprise

Traditional analysis shows categories and regions as separate dimensions. FactorPrism® finds the right level—sometimes it's the intersection that matters.

The Challenge

Understanding 18% Growth

Q2 sales came in 18% above Q1. The leadership team needed to understand why before planning Q3 inventory and marketing. Was it a specific product category? Certain regions? Or something more specific?

This is a hierarchy problem across multiple dimensions. The answer might be at the category level, the region level, or—crucially—at the intersection of both.

The Problem

Traditional Analysis Shows the Wrong Levels

The team pulled their standard BI reports, which showed each dimension separately:

By Category (Category Level)

  • Jewelry: +22%
  • Electronics: +15%
  • Apparel: +8%
  • Home Goods: +12%

By Region (Region Level)

  • South: +24%
  • West: +19%
  • Northeast: +11%
  • Midwest: +14%

The Hierarchy Problem

These reports show impact at the category level and the region level separately. But what if the real driver is at the intersection level—a specific category in a specific region?

Looking at these reports, a reasonable conclusion would be "Jewelry is hot—invest in Jewelry company-wide" or "The South is strong—expand in the South across all categories." Both conclusions allocate to a single dimension, potentially missing the real story.

The Reality

FactorPrism® Finds the Right Level

FactorPrism® analyzed all hierarchy levels simultaneously and found the simplest explanation:

+
South + Jewelry (Intersection): +9.0% Half the total growth from one specific combination
+
West Region (All Categories): +5.0% Broad-based regional strength—correctly attributed at region level
~
Segment-Wide Baseline: +5.0% General lift across everything (company-wide level)
−
Northeast + Apparel (Intersection): -1.0% A specific problem at the intersection level

The Right Hierarchy

The biggest driver wasn't "Jewelry" (category level) or "South" (region level)—it was "South + Jewelry" specifically (intersection level). This single combination drove 9% of the 18% total growth.

Meanwhile, West's growth was truly broad-based (correctly attributed at region level), and there was a segment-wide baseline lift (correctly attributed at company-wide level). Each effect is attributed to its correct level in the hierarchy.

The Difference

Why the Right Level Matters

Traditional (Wrong Levels)

  • Shows category level: "Jewelry +22%"
  • Shows region level: "South +24%"
  • Conclusion: "Invest in Jewelry company-wide"
  • Action: Increase Jewelry inventory everywhere
  • Misses that it's specifically South-Jewelry

FactorPrism® (Right Levels)

  • Finds intersection: "South-Jewelry +9%"
  • Finds region-wide: "West all-categories +5%"
  • Conclusion: "South-Jewelry is the specific driver"
  • Action: Double down on South-Jewelry specifically
  • Finds the right level for each effect
The Outcome

Taking Action at the Right Level

With the true hierarchy revealed, the team made targeted decisions:

Inventory
Doubled Jewelry allocation to Southern distribution centers—not company-wide
Marketing
Targeted Jewelry campaigns specifically in Southern markets; broad campaigns in West
Investigation
Found Northeast Apparel had pricing issue vs. regional competitor—fixed it
Targeted Investment, Better Results Q3 inventory costs dropped 15% (no longer over-investing in Jewelry everywhere) while Southern Jewelry sales continued to outperform.

Key Insight

Traditional BI shows dimensions separately—category growth and regional growth as independent reports. FactorPrism® considers all hierarchy levels simultaneously: company-wide, category-specific, region-specific, and intersection-specific. It finds the simplest explanation, attributing each effect to its correct level. When the real driver is an intersection, only multi-dimensional hierarchy analysis reveals it.

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