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Mall Customer Segmentation

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29 views

Mall Customer Segmentation

Uploaded by

sonalrig
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Mall Customer Segmentation

By Anuj Vyas
1. Introduction
1.1 Problem Statement

Customer Segmentation is a popular application of unsupervised learning. Using clustering, identify


segments of customers to target the potential user base. They divide customers into groups
according to common characteristics like gender, age, interests, and spending habits so they can
market to each group effectively.

Use K-means clustering and also visualize the gender and age distributions. Then analyze their annual
incomes and spending scores.
1.2 Introduction to Problem Statement

To make predictions and find the clusters of potential customers of the mall and thus find appropriate
measures to increase the revenue of the mall is one of the prevailing applications of unsupervised
learning.

For example, a group of customers have high income but their spending score (amount spent in the
mall) is low so from the analysis we can convert such type of customers into potential customers
(whose spending score is high) by using strategies like better advertising, accepting feedback and
improving the quality of products.

To identify such customers, this project analyses and forms clusters based on different criteria which
are discussed in the further sections.
2. Dataset
Overview of Dataset
The dataset name is Mall_Customers.csv
consists of 5 columns which are
CustomerID, Gender, Age, Annual Income
(k$), Spending Score (1-100) where
Gender is a categorical value and rest all
features are numeric.

The size of the dataset is (200, 5) which


is 200 rows and 5 columns.
3. Proposed Method & Architecture
3.1 Architecture Overview

3.1 Data Science Project Architecture


3.2 Project Architecture

Data: The size of the dataset is (200, 5) which is 200 rows and 5 columns. Also on dataset does not contain
any NULL or NaN values.

Algorithms: K-means algorithm is used in this project to analyze and form clusters of customers based on
their income and spending score features.

Model: K-means model is used and is hyper tuned parameters like n_clusters=5 using elbow method to find
the optimal number of clusters also init=’k-means++’ to avoid random initialization trap.

Programming Language: Python 3.6

Environment (Libraries and Technologies): Numpy, Pandas, Matplotlib, Seaborn, Jupyter Notebook, Google
Colab.
4. Methodology
Methodology

● Creating an approach to solve the given problem statement


● Exploring the dataset and obtaining useful insight from the same
● Cleaning the dataset by handling nan values, remove duplicate records, etc.
● Data Visualization used to obtain important information from the data
● Data Preprocessing is performed to make the data ready to fit the model this includes feature
scaling, splitting the dataset into features and labels, etc.
● Model Building
5. Implementation and Analysis
5.1 Gender Plot
Gender Plot Analysis:

From the Count plot, it is observed that


the number of Female customers is more
than the total number of Male customers.
5.2 Age Plot
Age Plot Analysis:

From the Histogram it is evident that


there are 3 age groups that are more
frequently shop at the mall, they are:
15-22 years, 30-40 years, and 45-50 years.
5.3 Age Vs Spending
Score
Age Vs Spending Score Analysis

1. From the Age Vs Spending Score plot


we observe that customers whose
spending score is more than 65 have their
Age in the range of 15-42 years. Also
from the Scatter plot it is observed that
customers whose spending score is more
than 65 consists of more Females than
Males.

2. The customers having average


spending score ie: in the range of 40-60
consists of the age group of the range
15-75 years and the count of males and
females in this age group is also
approximately the same.
5.4 Annual Income
Vs Spending Score
Annual Income Vs Spending Score Analysis

We observe that there are 5 clusters and


can be categorized as:

a. High Income, High Spending Score (Top


Right Cluster)
b. High Income, Low Spending Score
(Bottom Right Cluster)
c. Average Income, Average Spending Score
(Center Cluster)
d. Low Income, High Spending Score (Top
Left Cluster)
e. Low Income, Low Spending Score
(Bottom Left Cluster)
6. Conclusion
Clustering Analysis
a. High Income, High Spending Score (Cluster 5) - Target these
customers by sending new product alerts which would lead to an
increase in the revenue collected by the mall as they are loyal
customers.

b. High Income, Low Spending Score (Cluster 2) - Target these


customers by asking the feedback and advertising the product in
a better way to convert them into Cluster 5 customers.

c. Average Income, Average Spending Score (Cluster 1) - May or


may not target these groups of customers based on the policy of
the mall.

d. Low Income, High Spending Score (Cluster 4) - Can target


these set of customers by providing them with Low-cost EMI's,
etc.

e. Low Income, Low Spending Score (Cluster 3) - Don't target


these customers since they have less income and need to save
money.
Thankyou!
Contact Me:
Email: [email protected]

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