Regional Topics in British Grocery Retail Transactions

TL;DR

This paper applies segmented topic modeling and spatial regression to analyze regional shopping behaviors in UK grocery transactions, revealing geographic variations and store similarities.

Contribution

It introduces a novel application of Segmented Topic Model combined with spatial regression to identify and analyze regional shopping patterns in transactional data.

Findings

Shopping behaviors vary regionally across Britain.

Nearby stores tend to have similar regional demand patterns.

The method effectively captures store-specific and regional topics.

Abstract

Understanding the customer behaviours behind transactional data has high commercial value in the grocery retail industry. Customers generate millions of transactions every day, choosing and buying products to satisfy specific shopping needs. Product availability may vary geographically due to local demand and local supply, thus driving the importance of analysing transactions within their corresponding store and regional context. Topic models provide a powerful tool in the analysis of transactional data, identifying topics that display frequently-bought-together products and summarising transactions as mixtures of topics. We use the Segmented Topic Model (STM) to capture customer behaviours that are nested within stores. STM not only provides topics and transaction summaries but also topical summaries at the store level that can be used to identify regional topics. We summarised the posterior distribution of STM by post-processing multiple posterior samples and selecting semantic modes represented as recurrent topics. We use linear Gaussian process regression to model topic prevalence across British territory while accounting for spatial autocorrelation. We implement our methods on a dataset of transactional data from a major UK grocery retailer and demonstrate that shopping behaviours may vary regionally and nearby stores tend to exhibit similar regional demand.