A framework for personalized dynamic cross-selling in e-commerce retailing

Cross-selling and product bundling are prevalent strategies in the retail sector. Instead of static bundling offers, i.e. giving the same offer to everyone, personalized dynamic cross-selling generates targeted bundle offers and can help maximize revenues and profits. In resolving the two basic problems of dynamic cross-selling, which involves selecting the right complementary products and optimizing the discount, the issue of computational complexity becomes central as the customer base and length of the product list grows. Traditional recommender systems are built upon simple collaborative filtering techniques, which exploit the informational cues gained from users in the form of product ratings and rating differences across users. The retail setting differs in that there are only records of transactions (in period X, customer Y purchased product Z). Instead of a range of explicit rating scores, transactions form binary datasets; 1-purchased and 0-not-purchased. This makes it a one-class collaborative filtering (OCCF) problem. Notwithstanding the existence of wider application domains of such an OCCF problem, very little work has been done in the retail setting. This research addresses this gap by developing an effective framework for dynamic cross-selling for online retailing. In the first part of the research, we propose an effective yet intuitive approach to integrate temporal information regarding a product\u27s lifecycle (i.e., the non-stationary nature of the sales history) in the form of a weight component into latent-factor-based OCCF models, improving the quality of personalized product recommendations. To improve the scalability of large product catalogs with transaction sparsity typical in online retailing, the approach relies on product catalog hierarchy and segments (rather than individual SKUs) for collaborative filtering. In the second part of the work, we propose effective bundle discount policies, which estimate a specific customer\u27s interest in potential cross-selling products (identified using the proposed OCCF methods) and calibrate the discount to strike an effective balance between the probability of the offer acceptance and the size of the discount. We also developed a highly effective simulation platform for generation of e-retailer transactions under various settings and test and validate the proposed methods. To the best of our knowledge, this is the first study to address the topic of real-time personalized dynamic cross-selling with discounting. The proposed techniques are applicable to cross-selling, up-selling, and personalized and targeted selling within the e-retail business domain. Through extensive analysis of various market scenario setups, we also provide a number of managerial insights on the performance of cross-selling strategies

A Case Study on Agro-based E-Commerce Portal

This paper has investigated the practice of E-Commerce portal named Metrotarkari for marketing vegetables and fruit items in Kathmandu valley. A case study approach underpinned the study so as to identify current issues and practice of E-Commerce portal for vegetable and fruit items thereby adopt appropriate strategies for its sustainability in this sector. The study used explanatory form of analysis on the issues of business model, payment system, distribution system, overall challenges and marketing strategies based on the face to face interview with chief operating officer of Metrotarkari. The result shows that their B2B feature is serving more customers than B2C feature does in daily basis. The cash on delivery has been the preferable option of payment system although they have facility of Paypal, E-Sewa and Sctmoco. The main reason behind the problem in maintaining and delivering quality items is the lack of their own inventory and their dependency on others vendors. Establishing their own cold store or inventory and appending the C2C feature in their existing portal are major suggestions made to provide benefit to farmers and customers thereby sustain in this sector