Consumer Choice-Modeling Software
IDSS PI: Devavrat Shah
Co-PI: Vivek Farias (MIT)
Collaborator: Srikanth Jagabathula (MIT)
Researchers used novel analytics to refine the process of choosing which products will sell best—revealing insights into how retailers can optimize their shelf space. MIT spinout Celect, co-founded by MIT professors Vivek Farias and Devavrat Shah, develops software that uses a store’s sales and inventory and online buying data to determine which products local customers want to buy.
Building off algorithms for improving Netflix’s recommendation engine and predicting trending Twitter topics, the software compares items located near each other in an individual store, using sales data to determine which will sell best. The data are analyzed at scale—over thousands or millions of product comparisons—revealing customers’ buying preferences.
References and Related Content:
“A Non-parametric Approach to Modeling Choice with Limited Data” – Management Science, June 2011.
“What buyers want: MIT professors’ choice-modeling software predicts customer preferences for retailers” – MIT News, July 2015.