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CHURN PREDICTION TO IMPROVE CUSTOMER RETENTION IN GROCERY E-RETAILING

Project Overview

This project develops a machine-learning–driven churn prediction solution for grocery e-retailers. It analyses customer behaviour, experience indicators, complaints, payment preferences, and tenure patterns to identify early signals of churn and generate data-backed recommendations for improving customer retention.

The goal is to help e-retail organisations understand why customers leave, which customers are at highest risk, and what interventions can increase loyalty and lifetime value.

Data

The project uses the E-commerce Customer Churn Analysis and Prediction dataset published by Ankit Verma (2021), Product at Ufaber Edutech Pvt Ltd, available on Kaggle: https://www.kaggle.com/datasets/ankitverma2010/ecommerce-customer-churn-analysis-and-prediction

The dataset contains key behavioural and demographic attributes including satisfaction scores, complaint history, payment methods, and customer tenure — all core predictors of churn in digital retail.

Findings

Analysis of the dataset revealed the following behavioural and experience-driven insights:

Satisfaction Levels: Approximately 30% of customers rated satisfaction at 3/5, indicating moderate to low satisfaction — a strong churn warning signal.

Payment Preference: 2,314 customers (41% of the dataset) preferred debit card payments, highlighting a dominant transactional behaviour that retailers can target for personalised incentives.

Customer Tenure: New customers were far more likely to churn than long-standing customers. Longer tenure correlated strongly with lower churn probability.

Complaint Behaviour: Customers who filed complaints demonstrated significantly higher churn rates, reinforcing the importance of quick and effective customer service resolution.

These findings show that churn risk can be anticipated by monitoring satisfaction decline, complaint frequency, and early-tenure behaviour.

Methods

The analytical workflow combines:

Python — for data preprocessing, feature engineering, model development, and evaluation

SQL — for structured querying and behavioural trend analysis

Power BI — for visual analytics, churn drivers, and segment-level insights

This reflects a standard multi-tool pipeline used in industry data science teams.

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Results

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Model compariason chart

The best performing Churn prediction model is the Random Forest (200 Trees). This is illustrated comparing other models in the figure above

Proposed Framework

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Personalisation and Retention Strategies

Personalised voice-assisted shopping

Customised social-commerce experiences

Emotion-aware product recommendations

Personalised gifting suggestions

Immersive AR/VR shopping experiences

Loyalty and reward-driven retention programmes

These strategies align with modern retail personalisation standards and help retailers convert churn insights into meaningful action.

Recommendations

This work demonstrates how churn prediction can be integrated into customer-centric operations to significantly improve retention outcomes in grocery e-retailing.

Key recommendations include:

Retailers should replace generic retention strategies with data-driven, personalised interventions tailored to customer needs and behavioural patterns.

Organisations should monitor and react to churn indicators such as declining satisfaction, complaints, and reduced engagement.

The proposed retention framework provides a practical, scalable way for e-retailers to embed churn prediction into CRM systems, customer engagement platforms, and loyalty initiatives.

By operationalising this model, grocery e-retailers can proactively address churn drivers, improve customer lifetime value, and strengthen competitive advantage in the digital marketplace.

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