Customer segmentation with purchase behaviors

Segmenting customers based on new versus repeat customers is one of the basic and critical analyses to conduct. However, oftentimes, we would like to segment customers based on multiple factors, which can be demographic factors, such as age, geolocation, and occupation, or purchase history, such as how much they spent in the past year, how many items they have purchased, and how many returns they have requested. You can also segment based on customer web activities, such as number of logins in the past X number of days, how long they stay on your webpage, and what pages they look at.

There are still challenges to segmenting customers based on these factors, as there are an infinite number of ways and values you can segment the customers by. For example, if you are segmenting your customers by age, some of the questions that may arise are “how many buckets should I create?" or “what age cutoff thresholds should I...