Data Mining for the Category Management in the Retail Market
Worldwide the retail market is under a severe competitive pressure. The retail trade in Germany in particular is internationally recognized as the most competitive market. To survive in this market most retailers use undirected mass marketing extensively. All prospective customers receive the same huge catalogues, countless advertising pamphlets, intrusive speaker announcements and flashy banner ads. In the end the customers are not only annoyed but the response rates of advertising campaigns are dropping for years. To avoid this, an individualization of mass marketing is recommended where customers receive individual offers specific to their needs. The objective is to offer the right customer at the right time for the right price the right product or content. This turns out to be primarily a mathematical problem concerning the areas of statistics, optimization, analysis and numerics. The arising problems of regression, clustering, and optimal control are typically of high dimensions and have huge amounts of data and therefore need new mathematical concepts and algorithms.
KeywordsCustomer Relationship Management Price Optimization Sparse Grid Retail Market Category Management
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