Unsupervised Machine Learning Using K-Means Clustering and Hierarachial Clustering

Day 4: Visualizing the Clusters

cell 8

Copy the information above from Python by clicking on the copy key.

Paste the information into cell 8.

Save your project.

Run all cells to see the clusters.

Analyzing the results of the predictions from the model

The cluster located ion the bottom left represents customers between the ages of 16-28 years olds. Our model predicts that they will spend between $20 and $50 on a purchase. They are not very big spenders on clothes, probably because they do not have the earning potential of the older groups. This group coincides with the Generation Z individuals.

Innovations in Technology Gen Z,just like Gen Y, is a digital generation. They are born into a time of rapid digitization.

Connected As Gen Z is a technologically advanced generation,they are also very connected. They have a good understanding of social media and can easily find their way through it.

If we understand the characteristics of a particular generation, we can tailor our marketing strategies to target them. Here are some characteristics about Gen Z I found in an article from Oxford Royale.

• They are digital natives: Things they have not seen.
  • No dial-up Internet
  • No brick-shaped mobile phones
  • No taping songs off the radio and burning CDs
  • No maps and written party invitations
• World has never felt safe
• Accepting Individuals
  • Gay rights
  • Gay marriage
• Health Conscious
• They value their privacy, but they know that
  • Stuff on the Internet never goes away
  • They do not view companies that collect data about favorite brands as an invasion of privacy, but just expected marketing techniques to provide a good customer experience.
• They are Entreneurial and worried about their future
  • They do not feel financially secure
  • They do not want to have a boss
  • There is no affordable housing and an education is terribly expensive.
• They're changing the distinction between childhood and adulthood
  • A large majority will go to college.
  • Many will not have children at an early age.
  • They are less likely to own a car or even drive.
  • They want to establish a personal brand online.

Even though this group does not spend a lot of money on our product according to our research, they could be easily and cheaply reached using social media. We would want to have a special section on our web page for them to order product online.

Nowadays, Gen Z men are wearing anything from the latest styles to retro fashion. The latest styles include: tapered pants, joggers and oversized hoodies. Retro brands like Champion, New Balance and even The Gap, have made a major comeback among generation Z.²

The cluster located in the top left represents the Millennials or Generation y

They spend between $175 to $225 on each sale.

This group represents our big spenders. We want to target them directly and spend most of our advertising dollars appealing to this group.

It would warrant further research to see what items they bought.

Secondary marketing research reveals the following:

• Big online buyers
• Value of convenience
• Spend 2/3 the amount that Gen X and Baby Boomers on entertainment.
• They like subscriptions for groceries and other products.
• They demand fast delivery.
• They check reviews before buying.
• They do research on items before purchasing them.
• They do also like brick and motar establishments for:
  • Large electronics
  • Phones
  • Vast majority like buying clothing at brick and mortar stores.
• They buy through social media.
  • Warby Paker - glasses
  • Away - luggage
• Clothing brands they prefer: Comfort and Casual Styles
  • Nike
  • Jordan
  • Adidas
  • Vans
  • Under Amour
  • The North Face
  • Supreme
  • Converse
  • Pink
  • Puma
  • Levi's
  • Forever 21
  • Patagonia

They like oversized clothing, crazy hair color, and pairing of high- and low-end aesthetics. Uniqueness, personal comfort, mold-breaking, and creativity are the hallmarks of her look—and part of young consumers’ current definition of what cool actually looks like today.

Generation X is represented by the cluster located in the middle and center.

The average age is 38 and they spend between $60 and $75 dollars per purchase based on our survey data.

There is no one box where Generation Xers' sense of fashion can be placed. Many individuals favor a relaxed look--deconstructed or skinny-legged jeans, slouchy tops (or fitted tops featuring a favorite band), and canvas "kicks"--known to the rest of the world as sneakers.³

Generation X's born betwen 1965 and 1975 are considered the middle child generation.

• Bargain shoppers online
• Forty eight percent feel comfortable using cash, checks and credit and debit cards.
• They would try a new brand if offered a discount.
• They are tech savy.
• They are digitally conversant not digitally natives.
• They reply on reviews about products.
• You need a multichannel targeting strategy to reach all of them.
• They embrace the Internet.
• They are shrewd online shoppers.
• They like to search.
• They like it when you ask them for feedback.
• Demand reliability and like follow-up.
• Seventy three percent use YouTube for:
  • Home Repair
  • Cooking
  • Technology
  • Repairs
  • Arts and crafts
  • Beauty
• Clothing Preferences
  • Some like the Preppy Look: polo shirts, khakais, neutral colors.
  • Some like the Vintage Look: Bowling shirts, corduroy pants and shirts.
  • Some decide their clothing choices based on Influencers: movie stars, singers, sports figures.

The baby boomers were born just after the end of World War II, 1945.

Their cluster is located in the bottom right.

Their average is 69 and they spend between $20 and $50 according to our survey. Average sale is $36.00.

• They have disposable income and are shifting to online purchasing.
• Retailers need to remake the in-store experience on an ecommerce site.
• Twenty percent use coupons and prewritten shopping lists.
• They buy online and use curbside pickup.
• Make curbside pickup easy and seamless.
• Like popular clothing stores:
  • Talbots
  • Land's End
  • J.Crew
    • They want quality, comfort, value.
    • Quality is important since they tend to keep their clothing longer.
    • Clothing is a significant social symbol.