S01 / Retail and e-commerce
Customer value and promotion concentration
A retail marketing director must decide which customer segments deserve limited campaign capacity. Test whether forward-looking customer value identifies future high-value households better than recent spending alone, while detecting dependence on discounts.
Awaiting prerequisite
Proposed design & source
Hierarchical count/spend models; gradient boosting; customer value
Create household-month snapshots from transactions, baskets and available promotion records. Predict next-quarter purchasing and net sales using only prior history. Model transaction frequency and basket value separately; compare a hierarchical count/spend model with gradient boosting. Track discounted and full-price purchasing as separate outcomes.
Evaluation: Use rolling quarterly holdouts and household-clustered uncertainty. Compare against recency-frequency-monetary scoring and last-quarter sales. Report forecast error, calibration by value decile, top-budget value capture, and sensitivity to returns and discount accounting.
Boundary: The frequent-shopper panel is selective. Promotion exposure is observational: the project cannot establish incremental sales caused by a coupon or prove retention ROI.
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