Better Capturing Interactions Between Products in Retail: Revisited Negative Sampling for Basket Choice Modeling

Abstract

Brick-and-mortar retailers face many different challenges that involve understanding thoroughly its products catalog and customer preferences. In particular, assortment optimization - proposing the ideal mix of products - and promotion planning hold a pivotal role in their strategy. By leveraging sales data, retailers can make informed decisions on which products to sell and how to manage inventory, based on customer preferences as well as regional and seasonal trends. It is especially crucial to capture interactions between products, in order to minimize the number of items that cannibalize each other’s sales and to ensure that complementary products, which are often purchased together, are conjointly available and sold across all stores. In this paper, we propose a model of shopping basket that learns embeddings to represent interactions between products, prices and stores. Our model is built to uncover sales patterns from very large transaction datasets. In particular, the optimization loss is computed with random negative samples in order to overcome the computational bottlenecks that arise with large number of items. Our experiments on synthetic data show the efficiency of drawing such negative samples based on the actual assortment of available products, with better results than approaches from the literature. We also validate our approach by training and evaluating our model on a dataset composed of millions of transactions from Fortenova Group , one of the leading retail company in Southeast Europe. Our model showcases promising applications in the sector of retail, with enriched interfaces to efficiently support category managers.