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.
- 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.
- 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.
- 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.
- 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.
- 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.