Customer Segment Prediction on Retail Transactional Data Using K-Means and Markov Model

Retailing is a dynamic business domain where commodities and goods are sold in small quantities directly to the customers.It deals with the end user customers of a supply-chain network and therefore has to accommodate the needs and desires of a large group of customers over varied utilities.The volume and volatility of the business makes it one of the prospectivefields for analytical study and data modeling.This is also why customer segmentation drives a key role in multiple retail business decisions such as marketing budgeting,customer targeting,customized offers,value proposition etc.The segmentation could be on various aspects such as demographics,historic behavior or preferences based on the use cases.In this paper,historic retail transactional data is used to segment the custo-mers using K-Means clustering and the results are utilized to arrive at a transition matrix which is used to predict the cluster movements over the time period using Markov Model algorithm.This helps in calculating the futuristic value a segment or a customer brings to the business.Strategic marketing designs and budgeting can be implemented using these results.The study is specifically useful for large scale marketing in domains such as e-commerce,insurance or retailers to segment,profile and measure the customer lifecycle value over a short period of time.

Data Driven Customer Segmentation for Vietnamese SMEs in Big Data Era

Almost Vietnamese big businesses often use outsourcing services to do marketing researches such as analysing and evaluating consumer intention and behaviour,customers’satisfaction,customers’loyalty,market share,market segmentation and some similar marketing studies.One of the most favourite marketing research business in Vietnam is ACNielsen and Vietnam big businesses usually plan and adjust marketing activities based on ACNielsen’s report.Belong to the limitation of budget,Vietnamese small and medium enterprises(SMEs)often do marketing researches by themselves.Among the marketing researches activities in SMEs,customer segmentation is conducted by tools such as Excel,Facebook analytics or only by simple design thinking approach to help save costs.However,these tools are no longer suitable for the age of data information explosion today.This article uses case analysing of the United Kingdom online retailer through clustering algorithm on R package.The result proves clustering method’s superiority in customer segmentation compared to the traditional method(SPSS,Excel,Facebook analytics,design thinking)which Vietnamese SMEs are using.More important,this article helps Vietnamese SMEs understand and apply clustering algorithm on R in customer segmenting on their given data set efficiently.On that basis,Vietnamese SMEs can plan marketing programs and drive their actions as contextualizing and/or personalizing their message to their customers suitably.

A Big Data Based Dynamic Weight Approach for RFM Segmentation

Using the RFM(Recency,Frequency,Monetary value)model can provide valuable insights about customer clusterswhich is the core of customer relationship management.Due to accurate customer segment coming from dynamic weighted applications,in-depth targeted marketing may also use type of dynamic weight of R,F and M as factors.In this paper,we present our dynamic weighted RFM approach which is intended to improve the performance of customer segmentation by using the factors and variations to attain dynamic weights.Our dynamic weight approach is a kind of Custom method in essential which roots in the understanding of the data set.Firstly,Analytic Hierarchy Process is used to calculate the subjective weight,then the entropy method is applied to calculate the objective weight.Finally,we use comprehensive integration weighting method to combine the subjective and objective weight to obtain the final weight of the index to calculate the individual user value and quantify the user value difference.The experiment shows that the dynamic weight we used in RFM model is vital,affects the customer segmentation performance positively.Also,this study indicates that customer segments containing dynamic weighted RFM scores bring about stronger and more accurate association rules for the understanding of customer behavior.At last,we discuss the limitations of RFM analysis.

Research on Clustering Analysis and Its Application in Customer Data Mining of Enterprise

The paper study improved K-means algorithm and establish indicators to classify customers according to RFM model. Experimental results show that, the new algorithm has good convergence and stability, it has better than single use of FKP algorithms for clustering. Finally the paper study the application of clustering in customer segmentation of mobile communication enterprise. It discusses the basic theory, customer segmentation methods and steps, the customer segmentation model based on consumption behavior psychology, and the segmentation model is successfully applied to the process of marketing decision support.

Sales Prediction and Product Recommendation Model Through User Behavior Analytics

The COVID-19 has brought us unprecedented difficulties and thousands of companies have closed down.The general public has responded to call of the government to stay at home.Offline retail stores have been severely affected.Therefore,in order to transform a traditional offline sales model to the B2C model and to improve the shopping experience,this study aims to utilize historical sales data for exploring,building sales prediction and recommendation models.A novel data science life-cycle and process model with Recency,Frequency,and Monetary(RFM)analysis method with the combination of various analytics algorithms are utilized in this study for sales prediction and product recommendation through user behavior analytics.RFM analysis method is utilized for segmenting customer levels in the company to identify the importance of each level.For the purchase prediction model,XGBoost and Random Forest machine learning algorithms are used to build prediction models and 5-fold Cross-Validation method is utilized to evaluate their.For the product recommendation model,the association rules theory and Apriori algorithm are used to complete basket analysis and recommend products according to the outcomes.Moreover,some suggestions are proposed for the marketing department according to the outcomes.Overall,the XGBoost model achieved better performance and better accuracy with F1-score around 0.789.The proposed recommendation model provides good recommendation results and sales combinations for improving sales and market responsiveness.Furthermore,it recommend specific products to new customers.This study offered a very practical and useful business transformation case that assists companies in similar situations to transform their business models.

Load Profiling and Its Application to Demand Response: A Review

The smart grid has been revolutionizing electrical generation and consumption through a two-way flow of power and information. As an important information source from the demand side, Advanced Metering Infrastructure （AMI） has gained increasing popularity all over the world. By making full use of the data gathered by AMI, stakeholders of the electrical industry can have a better understanding of electrical consumption behavior. This is a significant strategy to improve operation efficiency and enhance power grid reliability. To implement this strategy, researchers have explored many data mining techniques for load profiling. This paper performs a state-of-the-art, comprehensive review of these data mining techniques from the perspectives of different technical approaches including direct clustering, indirect clustering, clustering evaluation criteria, and customer segmentation. On this basis, the prospects for implementing load profiling to demand response applications, price-based and incentivebased, are further summarized. Finally, challenges and opportunities of load profiling techniques in future power industry, especially in a demand response world, are discussed.