Building Mini-Categories in Product Networks

TL;DR

This paper constructs a product network from retail sales data, identifies structural elements, and organizes products into mini-categories that extend traditional hierarchies, aiding consumer behavior analysis.

Contribution

It introduces a novel method for creating mini-categories based on network structures, enhancing traditional retail product classifications.

Findings

Network dominated by small components, dense communities, and sparse chains.

Mini-categories capture complementary and substitute products.

Potential to improve consumer behavior modeling.

Abstract

We constructed a product network based on the sales data collected and provided by a Fortune 500 speciality retailer. The structure of the network is dominated by small isolated components, dense clique-based communities, and sparse stars and linear chains and pendants. We used the identified structural elements (tiles) to organize products into mini-categories -- compact collections of potentially complementary and substitute items. The mini-categories extend the traditional hierarchy of retail products (group - class - subcategory) and may serve as building blocks towards exploration of consumer projects and long-term customer behavior.