Customer segmentation
Retailer case
Alberto Abreu
Salvador Rocher
Data Analytics / 08-19
Data Consultancy firm
CONTEXT - Database outline
DEMOGRAPHICS
TRANSACTIONS
PRODUCTS
CAMPAIGN POOLS
CAMPAIGN DESCRIPTIONS
Household_key
Campaign_id
Product_id
Product_id
Household_key
CONTEXT - DATA
DEMOGRAPHICS
TRANSACTIONS
PRODUCTS
3M TRANSACTIONS
2 YEAR PERIOD
DESCRIPTION OF PURCHASES
2500K CUSTOMERS
INCOME LEVEL
AGE
HOUSEHOLD SIZE
GENDER
>1K PRODUCTS
20 DEPARTMENTS
60 SUB_DEPARTMENTS
SEGMENTATION RATIONALE
Avg. expenditure during mk campaigns
Avg. expenditure outside mk campaigns
SEGMENTATION RATIONALE
17%
30%
NON-CUSTOMIZED
MK CAMPAIGNS REVENUE INCREASE
ESTIMATED CUSTOMIZED
MK CAMPAIGNS
2 step SEGMENTATION
MACRO SEGMENTATION
MICRO SEGMENTATION
Macro-segmentation
Most sensitive to marketing campaigns
Micro-segmentation
micro cluster 2 ---> home loving
micro cluster 1 ---> smokers
micro cluster 0 ---> newly weds busy
micro cluster 3 ---> newly weds fashionable
Conclusions:
We have evidence to suggest that most customers are sensitive to mk campaigns.
We have identify strategic customer segments based on their purchase behavior.
We can propose a model to drive revenues up by improving customer response to relevant mk campaigns via targeting and microsegmentation.
THANK YOU!