Understanding the Product Cluster Graphs in Chartsy
In Charsty, product cluster graphs can help you understand and your products and their performance!
By focusing on three key variables: Recency (R), Frequency (F), and Monetary value (M), we can effectively segment your products and offer you insights on them accordingly.
Our Process
Recency, Frequency and Monetary values
The analysis is done based on the following variables:
Recency: Time since the product was last purchased.
Frequency: Total number of times the product was purchased.
Monetary: Total amount spent on the product.
Cluster Identification
Products are grouped into clusters based on their RFM values using clustering algorithms.
Product Clusters
Depending on your data and your products' performance (their RFM score), they are categorized into different Groups:
Group 1
Group 2
Group 3
Group 4
Ghost Products (products that are listed in the store's inventory but are not visible or available for purchase by customers).
Essentially what you want, is products where customers:
Spend a lot of money on - Have a high Monetary value
Purchase frequently - High Frequency
Purchased recently - High Recency
Based on the performance of the product for each variable (R, F, M), you can strategize and think about what you want to do with it.
You can see the breakdown of each group and which product is part of them in the "Your Product Cluster Overview":
Keep in mind that our Product Cluster process starts at the beginning of each month. Any new Products or behavior changes will be analyzed by the algorithm and reflected in the table in the next month.
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