EDA & Customer Segmentation for E-Commerce Data

Set up environment

$ pip install -r requirements.txt

Analysis Process

Define the business questions & the objective

• Do the RFM analysis to understand our customers
• Do customer segmentation based on RFM analysis

RFM Analysis

RFM analysis is a marketing technique used to quantitatively rank and group customers based on their recency, frequency, and monetary to identify the best customers and perform targeted marketing campaigns.

• Recency: How recently has the customer made a transaction?
• Frequency: How often do customers order?
• Monetary: How much money have customers spent on products on this website/app?

RFM Analysis	Avg Value
Recency (in days)	288.108797
Frequency	1.081075
Monetary	166.592492

Customer Segmentation Base on RFM Analysis

Based on RFM analysis, we have 5 cluster of our customers, such as:

• Cluster 0: New Customers and low spenders
• Cluster 1: The Churn Customers (it's been more than a year (on avg) since the previous purchase)
• Cluster 2: The Big Spender
• Cluster 3: The Loyal Customers
• Cluster 4: The Loyal Customers & Slightly Higher Spenders