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Applied Big Data Analysis to Build Customer Product Recommendation Model

Author

Listed:
  • Rong-Ho. Lin

    (Department of Industrial Engineering and Management, National Taipei University of Technology, Taipei 106, Taiwan)

  • Wei-Wei Chuang

    (Department of Industrial Engineering and Management, National Taipei University of Technology, Taipei 106, Taiwan)

  • Chun-Ling Chuang

    (Department of Information Management, Kainan University, Taoyuan 338, Taiwan)

  • Wan-Sin Chang

    (Department of Industrial Engineering and Management, National Taipei University of Technology, Taipei 106, Taiwan)

Abstract

With the development of the Internet environment, the trend of the retail industry in the future. It cannot be separated from the community, data and experience. Consumers’ lifestyles and purchasing behaviors are constantly changing and retailers must adopt policies to understand consumers. This research analyzes supermarkets most commonly touched by consumers in daily life. In order to find hidden information behind customer transaction data, it helps supermarkets to learn about the habits of customers to help them Formulate marketing strategies and improve the profitability of supermarkets and maintain long-term relationships with customers. Thus, the RFM model is used to convert customer transaction data into R, F, and M values and then clustering using the Ward’s method to combine with K-means, fuzzy C-means, and self-organizing maps. Using discriminant analysis find out the grouping method with the highest accuracy rate to calculate the customer lifetime value score. In terms of product recommendation, customers can be recommended to buy products in the top five categories or to use rules found in association rule to make recommendations. In terms of customers, we maintain long-term relationships with customers by recommending other related products, products for bundling sale, giving gifts or discount coupons, and regularly organizing promotional activities.

Suggested Citation

  • Rong-Ho. Lin & Wei-Wei Chuang & Chun-Ling Chuang & Wan-Sin Chang, 2021. "Applied Big Data Analysis to Build Customer Product Recommendation Model," Sustainability, MDPI, vol. 13(9), pages 1-45, April.
  • Handle: RePEc:gam:jsusta:v:13:y:2021:i:9:p:4985-:d:545963
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    References listed on IDEAS

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    1. Reinartz, Werner & Dellaert, Benedict & Krafft, Manfred & Kumar, V. & Varadarajan, Rajan, 2011. "Retailing Innovations in a Globalizing Retail Market Environment," Journal of Retailing, Elsevier, vol. 87(S1), pages 53-66.
    2. Peter S. Fader & Bruce G. S. Hardie & Ka Lok Lee, 2005. "“Counting Your Customers” the Easy Way: An Alternative to the Pareto/NBD Model," Marketing Science, INFORMS, vol. 24(2), pages 275-284, August.
    3. Haenlein, Michael & Kaplan, Andreas M. & Beeser, Anemone J., 2007. "A Model to Determine Customer Lifetime Value in a Retail Banking Context," European Management Journal, Elsevier, vol. 25(3), pages 221-234, June.
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    Cited by:

    1. Yufei Fang & Zhiguang Shan, 2022. "How to Promote a Smart City Effectively? An Evaluation Model and Efficiency Analysis of Smart Cities in China," Sustainability, MDPI, vol. 14(11), pages 1-23, May.

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