The data scientists at BigMart have collected 2013 sales data for 1559 products across 10 stores in different cities. The data also includes certain attributes of each product and store.
The objective is to build a predictive model and find out the sales of each product at a particular store. Big Mart will use this model to understand the properties of products and stores which play a key role in increasing sales.
The model performance will be evaluated on the basis of its prediction of the sales for the test data. Big Mart will use Root Mean Square Error (RMSE) value to judge your response.
This is a crucial step in the ML process. It involves understanding the problem and making some hypothesis about what factors could potentially affect the outcome of the problem statement. This step should be done BEFORE looking at the data.
City type – Store located in Tier 1 cities should have higher sales due to higher average income level
Population density – Stores that are located in high popuplation density area should experience higher demand, therefore, higher sales
Store capacity – Big stores act like a one-stop-shops and people prefer to get everything in one place, therefore big stors tend to have higher sales
Competitors – Stores located in areas with similar establishments nearby should have less sales due to competition
Marketing – Stores that has a good marketing team should have higher sales and it can attracts customers with the right offers and advertising
Customer behaviour – Stores keeping highly demanded products by local customers should experience higher sales
Ambiance – Stores that are well-maintained and has great customer service are expected to have higher sales
Product level hypotheses:
Brand – Popular brand products should have higher sales due to loyal and higher trust from customers
Packaging – Good packaging can attract customers and sell more
Utility – Daily use products should have a higher tendency to sell
Display Area – Products with bigger shelves space are likely to catch customers attention and sell more
Visibility in Store – The location of product in a store will impact sales (e.g. right at entrance or near the tills)
Advertising – Better advertising of products should lead to higher sales
Promotional Offers – Offers that are attractive to customers will sell more