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ShopCo Sales: Consumer Analytics

Project Overview

The "ShopCo Sales Connect" project analyzes different categories of customers and draws relationships between age and sales. The mall operator initiated this project to understand the role of real-time mobile messages on a consumer's intention to keep shopping. Using data from 9051 customers, the analysis explores customer demographics, purchasing behavior, and the impact of promotional marketing.

Objectives

  • To understand the role of real-time mobile messages on a customer’s purchase behavior.
  • To determine if real-time mobile messages lead to the consumer making a second purchase.
  • To analyze if age has an effect on shopping trends.

Experiment Design

  • The mall operator ran a field experiment on consumers who visited the mall during the week of Oct 1, 2024.
  • Consumers were divided into two groups.
  • The first group received a real-time mobile text message right after their first purchase.
  • The message promised 1000 loyalty points if the customer bought one more time from the mall on that day, regardless of the purchase amount.
  • The second group continued their shopping without receiving any promotional message.

Analysis Techniques

  • Descriptive Analytics: Used to summarize key variables, customer demographics, and purchasing behavior.
  • Predictive Analytics (Regression): Used to determine the specific impact of age and real-time messages on sales.
  • Clustering Analysis: Used K-means clustering to segment consumers into distinct purchasing groups based on age and spending.

Key Findings

  • Demographics: The customer base is predominantly female (76.4%) with an average age of 30.6 years, while males average 32.5 years.
  • Impact of Age: Age is a major factor that influences spending, and since older people have more buying power, they are the highest spenders. Age explains 28.03% of the variability in spending from the second store onwards.
  • Impact of Messaging: Real-time messaging has a measurable but small influence on consumer purchasing behavior. Receiving a message only explains 1.18% of the variability in subsequent spending. However, customers who received the text tended to spend $2.11 more on additional purchases compared to those who did not.
  • Customer Segments: Consumers were categorized into three distinct groups: Young Medium-Spenders, Older High-Spenders, and Young Low-Spenders.

Recommendations

  • Targeted Marketing by Age: Launch age-based pricing strategies and tailor marketing to different age groups. Focus on retention, upscale product lines, and loyalty incentives for older, high-spending customers.
  • Incentivize Younger Shoppers: Launch gamified promotions that reward additional purchases and offer bundle deals to increase spending among younger customers.
  • Optimize Messaging: Since real-time messages had a minor impact, ShopCo should tailor messages based on historical purchasing behavior and test different rewards, such as discount coupons versus loyalty points.

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