Comparing Clusterings:A Store Segmentation Application

This study focuses on one of the clustering comparison measures, pair counting techniques such as Rand Index, Adjusted Rand Index and Fowlkes Mallows Index. The aim is discussing their properties and showing a marketing application of the techniques. For an application, a retail chain company’s supermarket stores are segmented with clustering analysis by two approach. The first clustering approach is segmenting stores based on socioeconomic factors and the second approach is based on purchasing behaviors of customers. Since consumer purchases are influenced strongly by socioeconomic factors, this study expects to find an agreement between two clusterings. The results show that while Rand Index value indicates an agreement, Fowlkes-Mallows Index value has found a weak agreement and Adjusted Rand Index value could not find any agreement between two clusterings