Consumer Analytics
Multivariate Prediction Modeling
Consumer behavior from sparse purchase histories
Predicting consumer behavior from sparse multi-dimensional purchase histories, using the same intrinsic density and distribution machinery Morphological Physics applies to physical and statistical problems.
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Why the framework fits
Retail consumer data lives naturally as sparse consumer-product matrices — thousands of consumers, tens of thousands of products, most cells empty. Morphological Physics treats these matrices as observed samples from an underlying multidimensional density. Once the density is represented intrinsically, downstream questions — expected lifetime value, propensity to purchase a category, similarity between consumers or between products — become analytical operations on the density rather than fitted estimates. The construction also produces correlation coefficients between variables directly as a byproduct of the density fit, without a separate estimation step. The interaction terms that couple variables in these consumer models are the same mathematical object as the coupling matrices Morphological Physics uses in molecular electronic structure — the framework carries a single formalism across domains that appear unrelated on the surface. The density models are also Bayesian by default; the underlying density is a probability model, not a fitted estimator, so all outputs carry their probabilistic interpretation naturally, and the framework fits cleanly onto graphical-model representations of consumer behavior. Current work uses directed graph structures; whether the framework's underlying formalism requires direction, or whether undirected representations serve equally well, is itself an open question.
What makes it difficult
The applied problem is straightforward to state, but consumer data is where the framework meets several practical obstacles at once. Sparsity is extreme — a typical consumer purchases fewer than one percent of the products available, so the density model must handle regions where data is thin without overfitting where it is thick. Purchase histories are non-stationary — consumer behavior drifts with season, life stage, and market conditions, so a density fit at one point in time may not describe behavior six months later. Available datasets are also limited in size compared to what modern consumer analytics operations run on internally; whether more data would resolve the current characterization limits or expose deeper structural questions remains open.
Demonstrated on the Dunnhumby retail consumer dataset; performance characterization and interpretability layer under development.