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Strategy for Store Management Using SOM Based on RFM
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Yoon Jeong Jeong (School of Management & Management Research Institute, Kyunghee University)
Il Young Choi (School of Dance & Culture Item Factory Center, Kyunghee University)
Jae Kyeong Kim (School of Management & Management Research Institute, Kyunghee University)
Ju Choel Choi (Business Incubation Center, Kyunghee University)
Vol. 21, No. 2, Page: 93 ~ 112
10.13088/jiis.2015.21.2.93
Keywords
Product Segmentation, RFM, SOM, Clustering.
Abstract
Depending on the change in consumer’s consumption pattern, existing retail shop has evolved in hypermarket or convenience store offering grocery and daily products mostly. Therefore, it is important to maintain the inventory levels and proper product configuration for effectively utilize the limited space in the retail store and increasing sales. Accordingly, this study proposed proper product configuration and inventory level strategy based on RFM(Recency, Frequency, Monetary) model and SOM(self-organizing map) for manage the retail shop effectively. RFM model is analytic model to analyze customer behaviors based on the past customer’s buying activities. And it can differentiates important customers from large data by three variables. R represents recency, which refers to the last purchase of commodities. The latest consuming customer has bigger R. F represents frequency, which refers to the number of transactions in a particular period and M represents monetary, which refers to consumption money amount in a particular period. Thus, RFM method has been known to be a very effective model for customer segmentation. In this study, using a normalized value of the RFM variables, SOM cluster analysis was performed. SOM is regarded as one of the most distinguished artificial neural network models in the unsupervised learning tool space. It is a popular tool for clustering and visualization of high dimensional data in such a way that similar items are grouped spatially close to one another. In particular, it has been successfully applied in various technical fields for finding patterns. In our research, the procedure tries to find sales patterns by analyzing product sales records with Recency, Frequency and Monetary values. And to suggest a business strategy, we conduct the decision tree based on SOM results. To validate the proposed procedure in this study, we adopted the M-mart data collected between 2014.01.01~2014.12.31. Each product get the value of R, F, M, and they are clustered by 9 using SOM. And we also performed three tests using the weekday data, weekend data, whole data in order to analyze the sales pattern change. In order to propose the strategy of each cluster, we examine the criteria of product clustering. The clusters through the SOM can be explained by the characteristics of these clusters of decision trees. As a result, we can suggest the inventory management strategy of each 9 clusters through the suggested procedures of the study. The highest of all three value(R, F, M) cluster’s products need to have high level of the inventory as well as to be disposed in a place where it can be increasing customer’s path. In contrast, the lowest of all three value(R, F, M) cluster’s products need to have low level of inventory as well as to be disposed in a place where visibility is low. The highest R value cluster’s products is usually new releases products, and need to be placed on the front of the store. And, manager should decrease inventory levels gradually in the highest F value cluster’s products purchased in the past. Because, we assume that cluster has lower R value and the M value than the average value of good. And it can be deduced that product are sold poorly in recent days and total sales also will be lower than the frequency. The procedure presented in this study is expected to contribute to raising the profitability of the retail store. The paper is organized as follows. The second chapter briefly reviews the literature related to this study. The third chapter suggests procedures for research proposals, and the fourth chapter applied suggested procedure using the actual product sales data. Finally, the fifth chapter described the conclusion of the study and further research.
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RFM 기반 SOM을 이용한 매장관리 전략 도출
정윤정 (경희대학교 경영대학 & 경영연구원)
최일영 (경희대학교 무용학부 & 문화아이템팩토리센터)
김재경 (경희대학교 경영대학 & 경영연구원)
최주철 (경희대학교 창업보육센터)
Keywords
상품 세분화, RFM, 자기조직화지도, 군집화
Abstract
소비자의 소비성향이 필요 품목을 중심으로 근거리에서 구매하는 근린형으로 변화함에 기존의 소매점은 식료품, 생활용품을 위주로 제공하는 슈퍼마켓, 하이퍼마켓 또는 편의점으로 진화하고 있다. 따라서 소매점이 한정된 공간에서 효율적으로 공간을 활용하고 매출을 증대하기 위해서는 소비자의 구매욕을 충족시킬 수 있는 상품배치와 적정한 재고수준을 유지하는 것이 매우 중요하다.
본 연구에서는 소매점의 판매 상품에 대하여 RFM 기반 SOM 군집화를 하여 효율적으로 매장을 관리할 수 있는 상품 배치전략 및 재고전략을 제안하였다. 실제 M마트의 판매데이터를 이용하여 RFM모델을 상품에 적용한 후, 기존 문헌 연구뿐만 아니라 해석 가능성, 응용 가능성 등을 고려하여 3X3 총 9개의 군집으로 분류하여 분석한 결과, 주요 군집으로 R값, F값, M값이 모두 높은 군집, R값, F값, M값 모두 낮은 군집, R값만 높은 군집, F값만 높은 군집이 도출되었다. 본 논문에서는 다른 군집과는 R값, F값, M값이 차이를 보이는 주요 4개의 군집의 상품 배치 및 재고 전략을 제시하였다. R값, F값, M값이 모두 높은 군집의 상품은 소비자 동선을 늘림으로써 상품 노출을 확대시킬 수 있는 장소에 배치하여야 할 뿐만 아니라 높은 수준의 재고를 보유할 필요가 있다. 반면에 R값, F값, M값이 모두 낮은 군집의 상품은 가시성이 낮은 곳에 배치하고 최소한의 안전재고만 보유할 필요가 있다. 또한 R이 높은 군집은 신상품으로 매장 입구에 배치하여 상품의 판매를 유도할 필요가 있다. 그리고 F값만 높은 군집의 경우, R값과 M값이 평균 값 보다 작은 상품들의 군집이므로 최근에는 판매가 저조하며 빈도 수에 비해 총 판매액이 낮다는 것을 유추할 수 있다. 따라서 현재보다 과거에 많이 판매된 저가의 상품군집으로 재고 수준을 점차 감소시킬 필요가 있다. 본 연구에서 제시한 방법은 POS 시스템의 보유한 소매점에서 상품배치 및 재고관리 방법으로 활용되어 매장의 수익성 증대에 기여할 수 있을 것으로 기대된다.
Cite this article
JIIS Style
Jeong, Y. J., I. Y. Choi, J. K. Kim, and J. C. Choi, "Strategy for Store Management Using SOM Based on RFM", Journal of Intelligence and Information Systems, Vol. 21, No. 2 (2015), 93~112.

IEEE Style
Yoon Jeong Jeong, Il Young Choi, Jae Kyeong Kim, and Ju Choel Choi, "Strategy for Store Management Using SOM Based on RFM", Journal of Intelligence and Information Systems, vol. 21, no. 2, pp. 93~112, 2015.

ACM Style
Jeong, Y. J., Choi, I. Y., Kim, J. K., and Choi, J. C., 2015. Strategy for Store Management Using SOM Based on RFM. Journal of Intelligence and Information Systems. 21, 2, 93--112.
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@article{Jeong:JIIS:2015:614,
author = {Jeong, Yoon Jeong and Choi, Il Young and Kim, Jae Kyeong and Choi, Ju Choel},
title = {Strategy for Store Management Using SOM Based on RFM},
journal = {Journal of Intelligence and Information Systems},
issue_date = {June 2015},
volume = {21},
number = {2},
month = Jun,
year = {2015},
issn = {2288-4866},
pages = {93--112},
url = {http://dx.doi.org/10.13088/jiis.2015.21.2.93 },
doi = {10.13088/jiis.2015.21.2.93},
publisher = {Korea Intelligent Information System Society},
address = {Seoul, Republic of Korea},
keywords = { Product Segmentation, RFM, SOM and Clustering. },
}
%0 Journal Article
%1 614
%A Yoon Jeong Jeong
%A Il Young Choi
%A Jae Kyeong Kim
%A Ju Choel Choi
%T Strategy for Store Management Using SOM Based on RFM
%J Journal of Intelligence and Information Systems
%@ 2288-4866
%V 21
%N 2
%P 93-112
%D 2015
%R 10.13088/jiis.2015.21.2.93
%I Korea Intelligent Information System Society