Cohort analysis

Customer Segmentation in Python

Karolis Urbonas

Head of Data Science, Amazon

Cohort analysis heatmap

Rows:

First activity
Here - month of acquisition

Columns:

Time since first activity
Here - months since acquisition

Cohort heatmap

Cohort analysis heatmap

Rows:

First activity
Here - month of acquisition

Columns:

Time since first activity
Here - months since acquisition

Online retail data

Over 0.5 million transactions from a UK-based online retail store.

We will use a randomly sampled 20% subset of this dataset throughout the course.

OnlineRetail

Top 5 rows of data

online.head()

Top 5 rows

Assign acquisition month cohort

def get_month(x): return dt.datetime(x.year, x.month, 1)

online['InvoiceMonth'] = online['InvoiceDate'].apply(get_month)

grouping = online.groupby('CustomerID')['InvoiceMonth']

online['CohortMonth'] = grouping.transform('min')

online.head()

top5-cohort-added

Extract integer values from data

Define function to extract year, month and day integer values.

We will use it throughout the course.

def get_date_int(df, column):
    year = df[column].dt.year
    month = df[column].dt.month
    day = df[column].dt.day
    return year, month, day

Assign time offset value

invoice_year, invoice_month, _ = get_date_int(online, 'InvoiceMonth') 
cohort_year, cohort_month, _ = get_date_int(online, 'CohortMonth')

years_diff = invoice_year - cohort_year
months_diff = invoice_month - cohort_month

online['CohortIndex'] = years_diff * 12 + months_diff + 1
online.head()

top5-time-offset-added

Count monthly active customers from each cohort

grouping = online.groupby(['CohortMonth', 'CohortIndex'])

cohort_data = grouping['CustomerID'].apply(pd.Series.nunique)

cohort_data = cohort_data.reset_index()

cohort_counts = cohort_data.pivot(index='CohortMonth',
                                  columns='CohortIndex', 
                                  values='CustomerID')

print(cohort_counts)

online-pivot-counts

Your turn to build some cohorts!

Customer Segmentation in Python