In order to solve a customer segmentation problem, a customer behavior analysis needs to be carried out. Customer behavior analysis is a detailed analysis of a company’s ideal customers. It helps a business to better understand its customers and makes it easier for them to modify products according to the specific needs, behaviors, and concerns of different types of customers. For example, instead of spending money to market a new product to every customer in the company’s database, a company can analyze which customer segment is most likely to buy the product and then market the product only to that particular segment.
A United Kingdom (UK)--based online retail shop wants to maximize sales, so it decides to study its customers' behavior and segment them appropriately to improve target marketing. More specifically the segmentation of their customers, on different business metrics: how much they spend (revenue), how often they spend (frequency), whether are they new or existing customers, which ones are their favorite products, etc... this would help direct marketing, sales, account management, and product teams to better support customers.
Online Retail Data Set http://archive.ics.uci.edu/ml/datasets/online+retail
This is a transactional data set that contains all the transactions occurring between 01/12/2010 and 09/12/2011 for a UK-based and registered online retail store. The company mainly sells unique all-occasion gifts. Many customers of the company are wholesalers.