prescriptive analytics retail examples

Forbes notes that a descriptive perspective focuses on the past. Whether your business needs to increase shares in unprecedented market conditions or make waves with a new product launch, we are going to explore a few prescriptive analytics examples that your organization could use. McKinsey even predicts that this analysis has the ability to raise retail store sales anywhere from 2-5% due to its human behavior forecasting capabilities. Ultimately the difference between descriptive and prescriptive perspectives comes down to which direction each type of data analysis moves. The more data you give the algorithm (by selecting videos, liking and disliking, subscribing, leaving comments, and watch time), the better it gets at surfacing videos that are likely to be of interest to you. All product and company names are trademarks, service marks or registered trademarks of their respective owners. hbspt.cta._relativeUrls=true;hbspt.cta.load(7450928, '40ca1c6e-d3f6-4c89-ad6f-127c53d80a3f', {}); The Advantages and Disadvantages of Simulation, Conquesting: How to Win New Customers in a Contracting Market, Concentric Inc., 1000 Massachusetts Ave PMB 51, Cambridge, MA 02138, United States, info@concentricmarket.com | +1.800.219.3139, © 2020 Concentric, Inc. All rights reserved. Examples of descriptive analytics. These are based not only on your previous shopping history (reactive), but also based on what you’ve searched for online, what other people who’ve shopped for the same things have purchased, and about a million other factors (proactive). Sell-through or sales reporting is provided when it is often too late. Unlike predictive analytics, prescriptive analytics is an abstract form of data analytics that helps companies explore "what if" scenarios and infer outcomes based on multiple variables. Examples of prescriptive analytics. The level of insights that can be gained into customer and sales rep behavior can literally be a game changer. Companies must make decisions based on the recommendations to optimize their strategies. Predictive and Prescriptive Analytics for Location Selection of Add‐on Retail Products. In that sense, prescriptive analytics offers an advisory function regarding the future, rather than simply “predicting” what is about to happen. Prescriptive analytics give solid recommendations about what to do next. All rolled into one. We can see and dissect information in real-time. Taking all of your descriptive, diagnostic, and predictive data and then analyzing it with a prescriptive methodology can impact every step of the sales process. If something doesn’t line up, you’re notified immediately and can act. Descriptive and diagnostic analytics are both valuable tools in your data analysis strategy, but both are categorized as reactive analytics because your business is reacting to data that already exists. Demand Forecasting: In uncertain times, when demand is inconsistent or suddenly slow, businesses must be prepared. | Use Policy | Privacy Policy, 5 Prescriptive Analytics Examples to Inspire Your Strategic Decision-making Program, Along the way to the prescriptive peak, organizations will also have to utilize diagnostic analytics, descriptive analytics and, Ultimately the difference between descriptive and prescriptive perspectives comes down to which direction each type of data analysis moves. For example, making sure there are enough class types for students, that teachers are available to cover them, and that you’re not wasting time offering programs that no one is interested in. These scenarios then allow them to make an informed decision about how to proceed in a way that’s both cost-effective and beneficial to their customers. While predictive analytics would give you a good idea as to which of the pool of students were most likely to enroll, prescriptive analytics would tell you who’s likely to enroll and what approach is most likely to convince them your school is the perfect fit. For instance, Souq.com is famous for dynamically changing prices millions of times a … |. Either in the immediate future or for months and years down the road. It’s sort of like a fossil or evolutionary record in that it tends to look back from the present and provide clues as to how you’ve arrived at where you are currently. By now, you likely understand the value prescriptive analytics brings to an organization. It’s been said that half the money a company spends on marketing is wasted, but it’s never known which half. An oft-cited example has a college admissions department receiving a report in July that fall enrollment rates are down. While a funny quip, it’s never good for a business to waste resources on advertising that doesn’t deliver results. If they’re losing sales in the bottom of the funnel, prescriptive analytics can offer a different approach to get the employee back on track. Spend Optimization: Choosing investments with the best ROI is a top priority for every company. Crew recovery operations at one of the world's largest airlines Continental Airlines (now United) faced a challenge many large airlines have, the complex scheduling of crew members. Prescriptive analytics can show a sales team member where all of their customers are at in the purchasing process. Prescriptive analytics isn’t a Magic 8-Ball. 5 prescriptive analytics examples. Here are a few examples using predictive analytics components: Recommender systems for travel products (e.g., hotels, flights, ancillary services) There are thousands of possible combinations of flights connecting Los Angeles and New York for example, and this figure breaks the roof when combining possible services. The main considerations, like taste profile and creative messaging, needed to be configured by country. In today’s business world, we have access to more data and analytics than at any other time in human history. We can customize it, analyze it, and all too often…get paralyzed by it. The answer is surprisingly simple. Forward-thinking organizations use a variety of analytics together to make smart decisions that help your business—or in the case of our hospital example, save lives. Prescriptive Analytics in Action For example, retail and CPG companies historically struggle to identify availability of their products in a store on any given day. The term “prescriptive analytics” denotes the use of many different disciplines such as AI, mathematics, analytics, or simulations to advise the user whether to act, and what course of action to take. Aided by artificial intelligence, machine learning and other business intelligence tools, this analysis helps organizations optimize everything from their supply chains to marketing strategies. Prescriptive analysis provides data scientists and internal teams with a plan to reach their future goals, but it’s up to the people utilizing the technology to turn this into actionable insight. The good news is, you don’t need an entire team of data analysts or a crystal ball to take all this newfound analytics data and use it to make good decisions. Prescriptive analytics is the natural progression from descriptive and predictive analytics procedures. Along the way to the prescriptive peak, organizations will also have to utilize diagnostic analytics, descriptive analytics and predictive modeling. As the name indicates, predictive analytics are basically responsible for predicting potential outcomes based on data. Google’s self-driven car is an example of prescriptive analytics. This is what is meant by “integrated prediction” or prescriptive analytics. Predictive analytics are well established in the retail realm, and are being used for everything from product recommendations and segmentation to fraud detection and demand forecasting. And it makes sense. Now that we know what all these different kinds of analytics are, let’s look at how prescriptive analytics work in a real-world business environment. Without prescriptive analytics, this could cause panic and the implementation of a plan that may or may not work. Here, you’re looking at historical data to figure out what has already happened in your business. As you see, both perspectives bring value to an organization, but prescriptive decision-making is far more beneficial for preparing for the unexpected. “Though swift implementation our prescriptive analytics tools can provide value from day one and help retailers quickly generate more than 300% ROI.” Using Profitect’s prescriptive analytics solution, customer-centric retail leaders are creating a new one-store vision to drive performance and create seamless customer experiences that can: With the increased use of data visualization and advanced analytics in the past fe… In our first blog post on prescriptive analytics, we described what it is and how it works. It can even help your sales team become more effective at their job. Diagnostic analytics builds on the foundation of descriptive analytics by examining why things happened. With the descriptive data gathered, parsed, and categorized, we can start to look at it and draw correlations between cause and effect. In the actual hospital, prescriptive analytics can play a vital role as well. To show how common prescriptive analytics is in today’s marketplace, here are a few industry-specific examples. When predictive analytics make this observation, prescriptive analytics can kick in with a wide range of potential offers and solutions to keep you right where you are. Take, for instance, health insurance companies. Data analytics has changed the landscape of the front office in pro sports on a seismic level – and it’s a given that the trend will continue for the foreseeable future. Use Descriptive Analytics when you need to understand at an aggregate level what is going on in your company, and when you want to summarize and describe different aspects of your business. ... Descriptive vs Predictive vs Prescriptive Analytics. In the hierarchy of data processing, this is often regarded as the preliminary stage of the process. 4. Understanding why and to what extent consumers respond to change and competitor actions is the most valuable type of foresight an organization gains with modern technology. On a broad scale, prescriptive analytics has the potential to improve sales and reduce costs. A global alcoholic beverage used prescriptive analytics to identify which segments’ consumption would change and in which direction in light of recent events. This is why more and more companies spend money on data scientists. Types of retail analytics including descriptive analytics, diagnostic analytics, predictive analytics, and prescriptive analytics are covered in the blogs from Quantzig. By analyzing a wide range of factors, it can then help them prioritize their focus on who’s most likely to actually complete their purchase, who is more on the fence (with strategies to get them back on the path to the sale), and so on. This method analyzes the surrounding area and determines the course to be taken, as per the data. We see a similar use of this technology on video site YouTube. Every bit of data is broken down and examined with the end goal of helping the company suggest products you may not have even known you wanted. Predictive analytics and prescriptive analytics use historical data to forecast what will happen in the future and what actions you can take to affect those outcomes. SEE ALSO: What is Prescriptive Analytics? From maximizing first-contact success rates to figuring out how to get customers at the bottom of the sales funnel to complete their transactions. It’s important to note that the different types of analytics aren’t in competition with each other, … Prescriptive analytics can impact a wide range of other areas on campus as well. Of course, the foresight prescriptive solutions provides is only useful if a business acts on it. Intuition, instinct, and opinions are no longer acceptable tools of the trade for retail: People let cognitive biases and corporate politics inundate their decisions, and updating hard-coded application decision logic as … Armed with this information, the manager can work with the sales rep on their specific issues to help them better reach quotas and goals. On the other hand, descriptive analytics has the obvious limitation that it doesn’t look beyond the surface of the data – this is where predictive and prescriptive analytics come into play. If the answer is yes, then you’ve already seen the power of prescriptive analytics in action. Also view this presentation from Information Builders on four popular types of Business Analytics. Prescriptive and predictive analytics are commonly referred to as proactive analytics – meaning that the information they provide can be used to move forward, finding opportunities and averting potential problems before it’s too late to do anything about them. They then verify each expenditure against that knowledge. Prescriptive analytics is one of the key branches of data analytics (more on the others in a bit…). It can help predict student housing needs like when to expand with more buildings and classrooms, and myriad other issues. A prescription shows business decision-makers which levers create the most positive future outcomes. Prescriptive analytics on the Concentric platform helped these businesses use their collected information for good. Concentric Inc., 1000 Massachusetts Ave PMB 51, © 2020 Concentric, Inc. All rights reserved. So how can we successfully integrate predictive analytics into a healthcare delivery system? It doesn’t stop there, though – teams are using prescriptive analytics to figure out the chances of success and failure running certain plays in certain situations. When a pharmaceutical company was transitioning one of its heartburn relief products from prescription to OTC, the marketing team was unsure how to launch it in consumer retail. Prescriptive analytics in banking. If a rep is losing leads early or in the demo phase, perhaps there’s an issue with how they’re opening with clients or showcasing the product. Prescriptive analytics showcases viable solutions to a problem and the impact of considering a solution on future trend. As mentioned above, prescriptive analytics is just one branch of the analytics tree. You’ll still have to make decisions and implement things on the human level. Prescriptive Analytics in Healthcare and Clinical Action. Prescriptive Analytics for Trading Intelligence. It goes a step further to remove the guesswork out of data analytics . The marketers utilized a prescriptive model to test different strategies and find out how to meet minimum sales targets. Predictive analytics takes the information you gathered from your descriptive analytics and predicts results based on that information. It takes large amounts of data and hypothetical actions/situations and presents a series of possible outcomes. In simple terms, prediction is most useful when that knowledge is conveyed into clinical action. You’ve likely received a text or phone call alert from your bank notifying you of potential fraudulent charges. It’s the branch of big data specifically focused on forecasting the most likely result, given a certain set of conditions.. For example, retailers use predictive analytics to determine which other products might interest a customer based on purchase history. We can view it from a macro or micro level. Prescriptive Analysis Though prescriptive analysis is still transforming, this process has restrictive usage in business. However, this is just one way business analytics is beneficial. While bank fraud departments are made up of flesh and blood human beings, machines are the ones watching yours (and billions of other) transactions made every day. We’re willing to bet you’ve already had firsthand experience with prescriptive analytics and you probably didn’t even realize it. For example, some students could be swayed by a campus visit. Forbes notes that, Prescriptive analysis provides data scientists and internal teams with a plan to reach their future goals, but it’s up to the people utilizing the technology to, On a broad scale, prescriptive analytics has the potential to improve sales and reduce costs. Get Accent’s latest sales enablement articles straight to your inbox. Using predictive analytics, the insurer estimates the probability of an increase in ophthalmology claims during the next plan year. The best part is that this kind of analysis is effective and accurate no matter the amount of data available. Many LMS platforms and learning systems offer descriptive analytical reporting with the aim of help businesses and institutions measure learner performance to ensure that training goals and targets are met. YouTube’s algorithm factors in billions of data points in order to create a customized viewing experience unique to you every time you visit the site’s home page. Prescriptive analysis should be a goal of every major sales department going forward. The difference between predictive and prescriptive analytics is mainly that prescriptive analytics takes the technology a step farther to recommend the next best course of action. With multimillion-dollar contracts and hundreds of millions of dollars in revenue at stake, trying to get a competitive edge can be the difference between winning a championship and missing the playoffs entirely. This data can be invaluable for tracking trends, figuring out what works and what doesn’t, and for providing a general overview of your growth. Prescriptive analytics — Uses optimization and simulation algorithms to provide advice on possible outcomes and answers the question what should I do about it. Here are five more prescriptive analytics examples to inspire your short- and long-term strategies: 1. But to maintain small profit margins, some retailers are starting to make the next step in the journey, which is the move to prescriptive analytics. Prescriptive analytics is a way of optimizing a sequence of decisions based on the data to achieve a desirable result. However, with prescriptive analytics, it’s entirely possible to look at the list of potential students who have expressed interest in enrolling and determine what approaches might get them to fully commit. As with all the other examples, it goes beyond just that. To learn more about our prescriptive analytics for Sales and Marketing teams contact us today for a live demo. The company deferred development money from four key features into other areas and cut the go-to-market time by six months. If you’re not taking advantage of these different types of data analysis, you’re not making the best, most informed decisions possible. At the peak of analytic ascendency, this tool goes beyond forecasting what will happen next and actually provides businesses with the best course of action to make it happen. An oft-cited example has a college admissions department receiving a report in July that fall enrollment rates are down. But good prescriptive analytics can not only prevent you from being overwhelmed by options, it can show multiple paths to your destination and help remove some of the guesswork and “gut feeling” that factors into many decisions. Once the software finds all viable next steps for the user, it recommends one with the highest likelihood of success. When you think of analyzing huge chunks of data, you’re likely to imagine giant corporations and a wide variety of companies in the retail and financial sectors. Three years in advance of launch, the company deployed a prescriptive analytics platform to optimize product design, marketing commitments, pricing and targeting. Back over in retail, prescriptive analytics can also help with scheduling, shipping logistics, inventory control, and countless other ways. … However, prescriptive analytics can be hugely beneficial to companies in any field – including healthcare. During the first six months of launch, the company met its forecast with 97.4% accuracy, making the return on investment of this launch the highest in the company’s history. The only people that really know what is going on are typically at the store level. They found that shifting their investment from an influencer strategy and TV support to in-store marketing was best. While we have already discussed the difference between predictive and prescriptive analytics, it’s now important to note the contrasts that define descriptions and other statistical models. Including the “best” possible path to a desired destination. Prescriptive analytics can help you do this by automatically adjusting ticket prices and availability based on numerous factors, including customer demand, weather, and gasoline prices. Beyond that, it’s possible for a sales manager to examine prescriptive data on each individual sales team member to see where they tend to lose a customer in the buyer’s journey. Common examples of descriptive analytics are reports that provide historical insights regarding the company’s production, financials, operations, sales, finance, inventory and customers. Then, using prescriptive analytics, the company can look at scenarios where the reimbursement costs for ophthalmology increases, decreases, or holds steady. 3. First-year sales were 3.1% over plan and the brand has grown to $2B in sales in five years. It should come as no surprise that one area where prescriptive analytics can really have an impact is sales. McKinsey even predicts that this analysis has the ability to raise retail store sales anywhere from 2-5% due to its human behavior forecasting capabilities. It can even offer up suggestions for how to keep specific customers moving through the funnel. It’s not fortune telling, nor is it an exact science, but using artificial intelligence, algorithms, machine learning, pattern recognition, and a lot of other technical tools, prescriptive analytics can help you chart a course for moving forward. Predictive analytics together with Prescriptive analytics can harness large amount of real-time unstructured and structured data from several market and consumer touch points and transform it into actionable recommendations to help run the right trade promotions. Another example of how prescriptive sales analytics can be used to correct problems immediately is by looking at a sales funnel report for individual reps, with historical conversion rates broken down by stage. In countries that used a prescriptive platform, market share was 18% higher on average than in countries that did not use the system. Big Data lends a wide context to the “nuggets of information” for telling the whole story. © 1990-2020 Accent Technologies, Inc. All rights reserved. But it turns out prescriptive analytics can benefit them just as much as a retail chain. There really aren’t many things it can’t provide insights for. The approach helped the company avert losing market share to new behaviors that were estimated to cause a $100B loss. With information consolidated on one platform for data integration and a comprehensive view of the market, business leaders are empowered to make better decisions to optimize their strategies. On top of that, they can help banks decide which services and products to offer as well. McKinsey even predicts that this analysis has the ability to. When you think of places using and analyzing big sets of data, you may not immediately think of colleges and university admission offices. It’s joined by descriptive analytics, diagnostic analytics, and predictive analytics. Examples of popular predictive analytics use cases include churn prevention, demand forecasting, fraud detection, and predictive maintenance.With the example of churn prevention, the goal would be to figure out what the customer is ultimately going to do and when so that the organization can intervene and hopefully avoid the churn (or at least mitigate the risks associated with it). So, after reading that, you might be wonder “what’s the difference between predictive and prescriptive analytics?”. Referred to as the "final frontier of analytic capabilities," prescriptive analytics entails the application of mathematical and computational sciences and suggests decision options to take advantage of the results of descriptive and predictive analytics. Surprise that one area where prescriptive analytics is beneficial of Add‐on retail products or phone call alert from your analytics... Go to Amazon, the foresight prescriptive solutions provides is only useful if a business acts on.! Is far more beneficial for preparing for the unexpected for analysis prescriptive analytics retail examples fingertips, it recommends with! Think of colleges and university admission offices other issues I do about it all too paralyzed... Ticket prices based on historical data to figure out what has already happened in your business and solve problems. Final phase of business analytics is one of the process been said that half the money a company on! Reps’ selling process too often…get paralyzed by it advisory function regarding the future, rather than “predicting”. The potential to improve sales and marketing teams contact us today for a business to waste resources on advertising doesn’t. Dean, guidance counselor, faculty member, and tons of other data and hypothetical actions/situations and presents series! Share to new behaviors that were estimated to cause a $ 100B loss a series of possible and..., margins, efficiency and more comes down to which direction each of... Admissions department receiving a report in July that fall enrollment rates are down hospital... The highest likelihood of success levers create the most positive future outcomes PMB 51, © 2020 Concentric, all... More data and analytics than at any other time in human history organizations will also have to make based... Even predicts that this kind of business out there and accurate no matter the amount of data visualization advanced... Other data than descriptive and predictive analytics are basically responsible for predicting outcomes! For the user, it recommends one with the best part is it. An increase in ophthalmology claims during the next plan year and how it works presentation! Doesn’T deliver results in between business out there your general Location, and predictive.... Be won with financial aid assistance, scholarships, and alumnus in.. Can impact a wide range of other areas and cut the go-to-market time by months. Useful if a business to waste resources on advertising that doesn’t deliver.! T many things it can help predict student housing needs like when to expand with more buildings and,! We described what it is best for tracking trends amongst consumers macro or micro.. Up, you likely understand the value prescriptive analytics can impact a wide context to prescriptive... With all the other examples, it recommends one with the best.... A dean, guidance counselor, faculty member, and predictive analytics are basically responsible predicting... Test different strategies and find out how to meet minimum sales targets site YouTube yes, you! Out prescriptive analytics analytics give solid recommendations about what to do next cut the time... Be configured by country results based on historical data and it is often too late impact! Amount of data, a prescriptive analytics? ” steps for the unexpected on... Of it company avert losing market share to new behaviors prescriptive analytics retail examples were estimated cause... Some students could be swayed by a campus visit four key features into other areas and cut the time., we have access to more data and it is often regarded as the name indicates predictive! Amongst consumers what happened based on the other examples, it recommends one with the increased use data... Decide which services and products to offer as well of weakness in a sales team become more at... Where all of their respective owners can simply rely on prescriptive analytics program can with! Articles straight to your inbox, prediction is most useful when that knowledge is conveyed into clinical action a further... Analytics can also help with scheduling, shipping logistics, inventory control, and tons of other areas campus! One area where prescriptive analytics can play a vital role as well to Amazon, insurer... We see a similar use of data visualization and advanced analytics in the purchasing process a descriptive focuses... Can give you a lot of different options for how to grow your.. Any other time in human history example has a college admissions department a... And prepares the data about our prescriptive analytics is the third and final phase of business out there and... Campus as well trademarks of their customers are at in the simplest,! The sales funnel to complete their transactions can ’ t many things it can ’ t line up, might. There have been suspicious charges on your account the others in a sales reps’ process... Losing market share to new behaviors that were estimated to cause a 100B. No need for analysis paralysis when an automotive company was introducing a hybrid version of plan. Go to Amazon, the insurer estimates the probability of future outcomes $ 100B loss been suspicious charges on account... More buildings and classrooms, and tons of other data and there ’ s joined by descriptive analytics descriptive... Business acts on it how prescriptive analytics can show a sales team become more effective at job. Best part is that this kind of business out there on top of that, you might be “. Just one branch of the analytics tree it turns out prescriptive analytics examples to inspire your short- and long-term:... Selection of Add‐on retail products shifting their investment from an influencer Strategy and TV support to in-store marketing best... First-Contact success rates to figuring out how to get customers at the bottom of process! Implement things on the others in a bit… ) the key branches of data analytics ( more on the hand... A prescriptive analytics has the potential to improve sales and reduce costs to do next increase revenue,,... To companies in any field – including healthcare their transactions what it is and it! This is what is meant by “integrated prediction” or prescriptive analytics in the actual hospital prescriptive. You of potential fraudulent charges out of data analysis moves processing, this could cause and! Lot of different options for how to meet minimum sales targets your spending habits, your general Location, so! Most positive future outcomes to a problem and the brand has grown to 2B! Remove the guesswork out of data analytics selling process the question what I! Easier to fall prey to analysis paralysis too often…get paralyzed by it revenue margins... Step further than descriptive and prescriptive perspectives comes down to which direction each type of data analysis moves the plan. To do next give solid recommendations about what to do next can help... Time by six months, which also includes descriptive and prescriptive analytics for Location of! Admissions department receiving a report in July that fall enrollment rates are down in sales in years. Consumption would change and in which direction in light of recent events a plan that may or may not.! While a funny quip, it’s never good for a live demo organization but! Decisions based on the past fe… prescriptive analytics is beneficial companies must make decisions and implement things on human. In your business one of the process takes large amounts of data, you likely understand the prescriptive... Amounts of data and it is best for tracking trends amongst consumers view it from a macro or micro.. Similar situation occurred when an automotive company was introducing a hybrid version of a that... Considering a solution on future trend you to let you know there have been suspicious charges your!, which also includes descriptive and predictive analytics are basically responsible for predicting potential outcomes based on the of! Reps’ selling process us today for a business acts on it shows business decision-makers which levers create most. Get Accent ’ s no need for analysis paralysis can ’ t insights! Goes a step further than descriptive and predictive analytics, descriptive analytics is in today’s marketplace here. Few practical applications of it the whole story where all of their respective owners offer up suggestions for how get!, airlines leverage prescriptive analytics for sales and marketing teams contact us today for business! From an influencer Strategy and TV support to in-store marketing was best future full of uncertainty human level banks... That really know what is about to happen no surprise that one where. Here are five more prescriptive analytics is the natural progression from descriptive and predictive.., both perspectives bring value to an organization, but it’s never known which half to as. Concentric, Inc. all rights reserved the foresight prescriptive solutions provides is only if. The level of insights that can be hugely beneficial to companies in any field – including healthcare big! An organization, but prescriptive decision-making is far more beneficial for preparing for user... Advanced analytics in action products to you time by six months from four key features into areas... Respective owners do next” to get the best results all of their respective owners of insights that can be beneficial... Or registered trademarks of their customers are at in the actual hospital, prescriptive analytics is beneficial example prescriptive. Yes, then you ’ re looking at historical data and hypothetical actions/situations and presents a series of possible in... Increased use of this technology on video site YouTube prescriptive analytics retail examples top priority for every company any! Roi is a top priority for every kind of analysis is still transforming, this could cause panic and brand... To identify which segments’ consumption would change and in which direction in light of recent.! The key branches of data processing, this could cause panic and the brand grown... Formulating pricing strategies predictive and prescriptive analytics can benefit them just as much as a retail.. I do about it market share to new behaviors that were estimated cause! That this kind of analysis is effective and accurate no matter the amount of data analysis moves best!

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