Part 3/11:

Challenges in Retail Customer Segmentation

Nikita discussed key challenges faced in retail segmentation:

• Customer Diversity: Customers buy different products based on their life stages, making it difficult to classify them solely through transaction data.

• Limited Data Collection: Traditional methods like surveys are often inefficient or unengaging, especially when trying to gather demographic information directly from customers.

• Data Complexity: The volume and variety of transactional data, combined with product metadata, require sophisticated processing to extract meaningful segments.

• Manual Categorization Limitations: Assigning products and customers manually is time-consuming and prone to errors, emphasizing the need for automation.