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Journals ACM SIGEVOlution Volume 3 Issue 1

Currently, most of the grocery stores provide special discounts to their customers under different loyalty card programs. However, since each individual's shopping behavior is not taken into consideration, these discounts do not help optimize the store performance. We believe that a more determined approach such as individual pricing could enable retailers to optimize their store performance by giving special discounts to each customer. Our approach requires each customer is modeled as an agent and his/her shopping behavior is obtained from transaction data. Then, the overall shopping behavior is simulated and the store performance is optimized using Monte-Carlo simulations and evolutionary computation. The results showed that individual pricing outperforms the traditional product-centered approach significantly.

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Optimization of store performance using personalized pricing

Baydar, Cem
ACM SIGEVOlution , Volume 3 (1)
Association for Computing Machinery – Apr 1, 2008

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