Grouping Users with Customer Segmentation
To better understand consumer needs, we need to understand that our customers have distinct consumer patterns. Each mass of consumers of a given product or service can be divided into segments, described in terms of age, marital status, purchasing power, and so on. In this chapter, we will be performing an exploratory analysis of consumer data from a grocery store and then applying clustering techniques to separate them into segments with homogenous consumer patterns. This knowledge will enable us to better understand their needs, create unique offers, and target them more effectively. In this chapter, we will learn about the following topics:
- Understanding customer segmentation
- Exploring data about a customer’s database
- Applying feature engineering to standardize variables
- Creating users’ segments with K-means clustering
- Describing the common characteristics of these clusters
Let us see the requirements...
