This post is the second part in the customer segmentation analysis. The first post focused on k-means clustering in R to segment customers into distinct groups based on purchasing habits. This post takes a different approach, using Pricipal Component Analysis (PCA) in R as a tool to view customer groups. Because PCA attacks the problem from a different angle than k-means, we can get different insights. We’ll compare both the k-means results with the PCA visualization. Let’s see what happens when we apply PCA.

In this machine learning with R tutorial, use k means clustering to segment customers into distinct groups based on purchasing habits.

In this post, we will be discussing orderSimulatoR, which enables fast and easy R order simulation for customer and product learning. The basic premise is to simulate data that you’d retrieve from a SQL query of an ERP system. The data can then be merged with products and customers tables to data mine. I’ll go through the basic steps to create an order data set that combines customers and products, and I’ll wrap up with some visualizations to show how you can use order data to expose trends. You can get the scripts and the Cannondale bikes data set at the orderSimulatoR GitHub repository. In case you are wondering what simulated orders look like, click here to scroll to the end result.

Just because you’re a business professional does not mean you can’t or you shouldn’t pursue furthering yourself in analytics. Businesses view strategic decision making as a competitive advantage. You should too! Learning the basics behind data science not only adds value to your organization, it increases your value and thus your demand too.

Getting up and running in data science is tough. It’s easy to get overwhelmed, and your biggest asset is time (don’t waste it). Here’s some resources to help speed you along. I’ll continually update these as I get time. Feel free to comment or email me if I’m missing something.