SAS Project Report
- 1. RETAIL CUSTOMER ANALYSIS Prepared by : Lambert Tan Date: May 7, 2016 1
- 2. Agenda ◦ Background ◦ RFM Analysis ◦ Demographic Information ◦ Purchase Behavior Analysis ◦ Appendix-1 (Hypothesis and results) ◦ Appendix-2 (SAS Code) 2
- 3. Background ◦ Introduction ◦ The retail store has gathered customer purchase behavior information to make further marketing decisions ◦ The purpose ◦ Targeting valuable customers to craft marketing strategy and conclude features of valuable customers ◦ To profile the valuable customers base on purchasing behaviour ◦ Inclusion ◦ Recency, order frequency and dollar spent ◦ All purchase records, customers’ income, home value, age, sex, travel time and education level ◦ Exclusion ◦ Rents, Apartment Number, Kids, Car Number, Telemarket, Total Returns, Purchase, County Code, Marriage Status, Job Category, Race. Heating Type, Value per Mail ◦ Definition ◦ The Most Valuable customers: RFM Groups 1,2 ◦ The Medium Valuable customers: RFM Groups 3,4,5 ◦ The Least Valuable customers: RFM Groups 6,7,8 ◦ RFM: Recency, Order Frequency and Monetary Spent 3
- 4. Key Findings Demographic ◦ There are only 21% customers who are males. ◦ The age level has no significant difference between all RFM Levels, but the last three levels are intending to be older than others. ◦ The RFM Group 1 has the lowest average travel time. CUSTOMER PROFILE ◦ Customers in RFM Group1 have contributed 43.79% of the total purchase with 18.57% of the total population. ◦ RFM Group 6 and 8 made nearly 50% of the total purchase during the two promotions. ◦ RFM Group 7 showed huge individual purchase power during the two promotions ◦ When a promotion was launched, the RFM Group 6 and 8 will make purchase dramatically more than usual periods. 4
- 5. RFM Clustered Groups 5 Total 1 18.57% 2 7.99% 3 0.97% 4 1.83% 5 10.68% 6 25.69% 7 2.39% 8 31.89% 18.57% 7.99% 0.97% 1.83% 10.68% 25.69% 2.39% 31.89% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 1 2 3 4 5 6 7 8
- 6. Demographic Information 6 79% 21% Gender female male 30.74 30.15 33.84 29.36 30.37 31.60 31.87 31.19 27.00 28.00 29.00 30.00 31.00 32.00 33.00 34.00 35.00 1 2 3 4 5 6 7 8 Total 0.00 20000.00 40000.00 60000.00 80000.00 100000.00 120000.00 140000.00 1 2 3 4 5 6 7 8 Average ofINCOME AverageofHOMEVAL 1 2 3 4 5 6 7 8 1 2 3 4
- 7. 7 Geographic Information 19.28 20.42 23.53 20.46 19.33 19.32 20.15 19.47 0.00 5.00 10.00 15.00 20.00 25.00 1 2 3 4 5 6 7 8 Total
- 8. Promotion 8 Individual Average Purchase Power for Promotion 1-7 50.63 43.04 46.68 42.25 38.90 29.49 47.06 28.42 0.00 10.00 20.00 30.00 40.00 50.00 60.00 TOTAL 1 2 3 4 5 6 7 8
- 9. Promotion 9 Individual Average Purchase Power for Promotion 8-13 30.43 26.22 33.21 26.25 23.27 17.77 34.89 18.84 0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 40.00 TOTAL 1 2 3 4 5 6 7 8
- 10. 10 Promotion Comparison between Two Promotions: Total Purchase 26.13% 9.55% 1.25% 2.15% 11.55% 21.05% 3.13% 25.19% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% TOTAL 1 2 3 4 5 6 7 8
- 11. 11 Promotion Comparison between Two Promotions: Total Purchase 25.18% 9.33% 1.43% 2.14% 11.08% 20.34% 3.72% 26.78% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% TOTAL 1 2 3 4 5 6 7 8
- 12. Total Purchase Distribution 12 Excluding the promotions: Individual Average 41.72 20.63 23.21 13.25 18.82 10.10 23.70 7.70 0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 40.00 45.00 TOTAL 1 2 3 4 5 6 7 8
- 13. 13 Total Purchase Distribution 44.29% 9.42% 1.28% 1.39% 11.50% 14.84% 3.24% 14.04% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00% TOTAL 1 2 3 4 5 6 7 8 Excluding the promotions: Group Total
- 14. Purchase Break Down 14 Apparel 3.25 1.44 1.37 0.56 0.96 0.52 0.49 0.17 4.83 1.51 1.11 1.50 2.58 1.08 3.89 0.82 1.29 0.42 0.79 0.17 0.60 0.27 0.91 0.16 0.00 1.00 2.00 3.00 4.00 5.00 6.00 1 2 3 4 5 6 7 8 Male Apparel Ladies Apparel Unisex Apparel
- 15. Purchase Break Down 15 Luxury and Jewelry 0.48 0.32 0.37 0.47 0.09 0.08 0.06 0.03 2.70 1.50 1.05 0.72 1.23 0.62 1.55 0.44 1 2 3 4 5 6 7 8 Average of LUXURY Average of JEWELRY
- 16. 16 Purchase Break Down Total dining 2.67 1.66 2.53 1.00 1.20 0.95 1.96 0.76 TOTAL 1 2 3 4 5 6 7 8
- 17. 17 Purchase Break Down Home Products: Lamp and Home Accesory 0.99 0.39 0.37 0.33 0.52 0.31 0.89 0.25 4.20 2.03 1.95 1.11 2.19 1.00 2.74 0.93 1 2 3 4 5 6 7 8 Average of LAMPS Average of HOMEACC
- 18. 18 Outdoor Products Purchase Break Down 2.89 1.55 1.84 1.33 1.43 0.72 2.30 0.55 1 2 3 4 5 6 7 8 Total Total
- 19. 19 Purchase Break Down Leisure Products 2.51 1.49 1.58 0.78 0.69 0.50 0.34 0.15 Total Total
- 20. Conclusion and Recommendations 20 Group 1 Group 2 Group 3 Group 4 Group 5 Group 6 Group 7 Group 8 Men Apparel 3.25 1.44 1.37 0.56 0.96 0.52 0.49 0.17 Ladies Apparel 4.83 1.51 1.11 1.5 2.58 1.08 3.89 0.82 General Apparel 1.29 0.42 0.79 0.17 0.6 0.27 0.91 0.16 Luxury 0.37 0.47 0.48 0.32 0.07 0.03 0.09 0.08 Jewelry 1.05 0.74 2.7 1.49 1.59 0.43 1.22 0.62 Total Dining 2.53 1.06 2.67 1.64 1.98 0.76 1.2 0.95 Lamps 0.37 0.35 0.99 0.38 0.91 0.25 0.52 0.31 Furniture 1.95 1.18 4.2 2.01 2.78 0.93 2.18 1 Outdoor 1.84 1.15 2.89 1.58 2.35 0.55 1.42 0.72 Leisure 1.58 0.79 2.51 1.48 0.35 0.14 0.69 0.5 Preference Ladies Apparel Ladies Apparel Furniture Furniture Furniture Ladies Apparel Ladies Apparel Furniture Second Preference Men Apparel Men Apparel Outdoor Dining Ladies Apparel Furniture Furniture Dining Third Preference Dining Furniture Jewelry Outdoor Outdoor Dining Outdoor Ladies Apparel Preference Table
- 21. 21 ◦ Conclusion: RFM Analysis showed that the group 1,2,3,4 are regularly active customers, but the group 7 and 8 showed huge potential during the promotion periods. ◦ Recommendations: Focus on female customers Focus on apparel products Conduct promotion for home furniture and outdoor products to boost the sales Conclusion and Recommendations
- 22. Appendix-1 22 ◦ According to the RFM Analysis, the customers could be divided into four segments: Highly Active Apparel Purchaser (Including Group 1, 2) Affluent-Medium Active Furniture and Outdoor Products Purchaser (Including Group 3, 4) Lady Apparel, Home furniture and Outdoor Light Purchaser(Including Group 5,7) Promotion-driving Inactive purchaser(Including Group 6,8)
- 23. 23 Appendix-2
- 24. 24