Store segmentation using SAS clustering

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Store segmentation using SAS clustering

• Baofu Ma
• Merchandising
• AUTOZONE
• ANALYST,MERCH RESEARCH

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Introduction

• Motivation
• Need to create similar business model for stores
  with either similar product sales or customer GBB
  brand preference.
• And explain these clusters in terms of
  demographic variables.
• Challenges
• Business rule requires that the store cluster
  size has to be greater than certain number.
  Enforce a minimum cluster size with proc cluster.
• Explore the relationship between the clusters and
  demographic variables.

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Overview of hierarchical clustering

• Each observation begins in a cluster by itself.
  The two closest clusters are merged to form a new
  cluster.
• Using Proc cluster to get the tree.
• Using Proc tree to get the desired cluster.

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Solution

• Get the history of the clustering process using
  ODS.
• ods output ClusterHistoryhistory
• proc cluster dataindatatemp METHODward
  outtreeTree
• Search clusters which satisfy the minimum size
  criteria from top to bottom.

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Example

• Classify autozone stores based on market share of
  2 oil brands, high mileage and blends.
• Business rule requires minimum cluster size is
  300.

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Example

• Even borders.
• Find centers of each cluster.
• Calculate distance between store and each cluster
  center.
• Reassign store to the closest cluster .

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Example
Relationship between clusters and demographic
variables. Blue-positive Orange- negative
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Thank you!