Segmenting Consumer Location-Product Preferences for Assortment Localization – MSI

Working Paper

Segmenting Consumer Location-Product Preferences for Assortment Localization

Jia Liu, Kohei Kawaguchi and Tao Li

Dec 20, 2024

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Develops a dual Poisson Dynamic System with Multilayer Factorization (dPDS-MF) modeling approach to optimize location of and assortment in beverage vending machines in rail stations to meet product preferences of different segments of Japanese commuters.

Topics

Consumer Behavior & Insights Marketing Capabilities Omnichannels & Customer Journey

research recap

Optimizing Retail: Beyond Location To Assortment and Customer Preferences

Retailers face the constant challenge of aligning locations, product assortments and consumer preferences. A modeling framework called the dual Poisson Dynamic System with Multilayer Factorization (dPDS-MF) can cluster data at two different levels simultaneously and quantify the relationships between them, yielding better results than current optimization methods.

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