Product Based Store Clustering and Range Recommendation

Author(s): Seema Mudgil


Abstract- Today’s retail market is consumer driven and has become quite competitive. Shoppers have a wide range of options to choose from in terms of products as well as in terms of stores. This has made retailers re-look at their merchandising strategies more precisely to understand demand at a more granular level. Most retailers group stores into clusters and take strategic decisions on pricing, promotion, assortment & marketing specific to cluster behaviour. This paper provides a clustering solution by comparing two approaches, i.e. product-based vs shopping mission-based. Our objective in identifying a group of stores is to provide a customer-centric assortment, which in turn improves the customer shopping experience and cuts down the stock cost by removing non-performing lines, which eventually drives retailer growth.