• Journal of Intelligence and Information Systems
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• v.25 no.1
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• pp.139-161
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• 2019

The utilization of the e-commerce market has become a common life style in today. It has become important part to know where and how to make reasonable purchases of good quality products for customers. This change in purchase psychology tends to make it difficult for customers to make purchasing decisions in vast amounts of information. In this case, the recommendation system has the effect of reducing the cost of information retrieval and improving the satisfaction by analyzing the purchasing behavior of the customer. Amazon and Netflix are considered to be the well-known examples of sales marketing using the recommendation system. In the case of Amazon, 60% of the recommendation is made by purchasing goods, and 35% of the sales increase was achieved. Netflix, on the other hand, found that 75% of movie recommendations were made using services. This personalization technique is considered to be one of the key strategies for one-to-one marketing that can be useful in online markets where salespeople do not exist. Recommendation techniques that are mainly used in recommendation systems today include collaborative filtering and content-based filtering. Furthermore, hybrid techniques and association rules that use these techniques in combination are also being used in various fields. Of these, collaborative filtering recommendation techniques are the most popular today. Collaborative filtering is a method of recommending products preferred by neighbors who have similar preferences or purchasing behavior, based on the assumption that users who have exhibited similar tendencies in purchasing or evaluating products in the past will have a similar tendency to other products. However, most of the existed systems are recommended only within the same category of products such as books and movies. This is because the recommendation system estimates the purchase satisfaction about new item which have never been bought yet using customer's purchase rating points of a similar commodity based on the transaction data. In addition, there is a problem about the reliability of purchase ratings used in the recommendation system. Reliability of customer purchase ratings is causing serious problems. In particular, 'Compensatory Review' refers to the intentional manipulation of a customer purchase rating by a company intervention. In fact, Amazon has been hard-pressed for these "compassionate reviews" since 2016 and has worked hard to reduce false information and increase credibility. The survey showed that the average rating for products with 'Compensated Review' was higher than those without 'Compensation Review'. And it turns out that 'Compensatory Review' is about 12 times less likely to give the lowest rating, and about 4 times less likely to leave a critical opinion. As such, customer purchase ratings are full of various noises. This problem is directly related to the performance of recommendation systems aimed at maximizing profits by attracting highly satisfied customers in most e-commerce transactions. In this study, we propose the possibility of using new indicators that can objectively substitute existing customer 's purchase ratings by using RFM multi-dimensional analysis technique to solve a series of problems. RFM multi-dimensional analysis technique is the most widely used analytical method in customer relationship management marketing(CRM), and is a data analysis method for selecting customers who are likely to purchase goods. As a result of verifying the actual purchase history data using the relevant index, the accuracy was as high as about 55%. This is a result of recommending a total of 4,386 different types of products that have never been bought before, thus the verification result means relatively high accuracy and utilization value. And this study suggests the possibility of general recommendation system that can be applied to various offline product data. If additional data is acquired in the future, the accuracy of the proposed recommendation system can be improved.

• The Journal of Society for e-Business Studies
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• v.12 no.1
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• pp.99-122
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• 2007

The rule based system is inference engine which can correspond quickly to new business model change and improvement requirement by dealing with the business know-how and expert knowledge as well as business process of enterprise and has been trying to apply to the various industries. As a part of application cases for rule-based system, we develop and implement the rule-based insurance product recommend and design system for the efficient decision making of insurance product in insurance industry which is sensitively affected by needs of customers, various kinds of product, and environment changes. The process of fuzzy inference of the developed system helps to recommend and design the proper Insurance product using the information of the present customer and the previous members. This approach is expected that it will be the core technology for the recommendation and design of the tailored insurance product by deciding and corresponding needs of various kinds of customer quickly in future insurance industry.

• Journal of Intelligence and Information Systems
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• v.28 no.3
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• pp.119-137
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• 2022

Recent recommendation system studies apply various deep learning models to represent user and item interactions better. One of the noteworthy studies is ONCF(Outer product-based Neural Collaborative Filtering) which builds a two-dimensional interaction map via outer product and employs CNN (Convolutional Neural Networks) to learn high-order correlations from the map. However, ONCF has limitations in recommendation performance due to the problems with CNN and the absence of side information. ONCF using CNN has an inductive bias problem that causes poor performances for data with a distribution that does not appear in the training data. This paper proposes to employ a Vision Transformer (ViT) instead of the vanilla CNN used in ONCF. The reason is that ViT showed better results than state-of-the-art CNN in many image classification cases. In addition, we propose a new architecture to reflect side information that ONCF did not consider. Unlike previous studies that reflect side information in a neural network using simple input combination methods, this study uses an independent auxiliary classifier to reflect side information more effectively in the recommender system. ONCF used a single latent vector for user and item, but in this study, a channel is constructed using multiple vectors to enable the model to learn more diverse expressions and to obtain an ensemble effect. The experiments showed our deep learning model improved performance in recommendation compared to ONCF.

• Journal of Intelligence and Information Systems
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• v.19 no.2
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• pp.39-54
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• 2013

Recent explosive increase of electronic commerce provides many advantageous purchase opportunities to customers. In this situation, customers who do not have enough knowledge about their purchases, may accept product recommendations. Product recommender systems automatically reflect user's preference and provide recommendation list to the users. Thus, product recommender system in online shopping store has been known as one of the most popular tools for one-to-one marketing. However, recommender systems which do not properly reflect user's preference cause user's disappointment and waste of time. In this study, we propose a novel recommender system which uses data mining and multi-model ensemble techniques to enhance the recommendation performance through reflecting the precise user's preference. The research data is collected from the real-world online shopping store, which deals products from famous art galleries and museums in Korea. The data initially contain 5759 transaction data, but finally remain 3167 transaction data after deletion of null data. In this study, we transform the categorical variables into dummy variables and exclude outlier data. The proposed model consists of two steps. The first step predicts customers who have high likelihood to purchase products in the online shopping store. In this step, we first use logistic regression, decision trees, and artificial neural networks to predict customers who have high likelihood to purchase products in each product group. We perform above data mining techniques using SAS E-Miner software. In this study, we partition datasets into two sets as modeling and validation sets for the logistic regression and decision trees. We also partition datasets into three sets as training, test, and validation sets for the artificial neural network model. The validation dataset is equal for the all experiments. Then we composite the results of each predictor using the multi-model ensemble techniques such as bagging and bumping. Bagging is the abbreviation of "Bootstrap Aggregation" and it composite outputs from several machine learning techniques for raising the performance and stability of prediction or classification. This technique is special form of the averaging method. Bumping is the abbreviation of "Bootstrap Umbrella of Model Parameter," and it only considers the model which has the lowest error value. The results show that bumping outperforms bagging and the other predictors except for "Poster" product group. For the "Poster" product group, artificial neural network model performs better than the other models. In the second step, we use the market basket analysis to extract association rules for co-purchased products. We can extract thirty one association rules according to values of Lift, Support, and Confidence measure. We set the minimum transaction frequency to support associations as 5%, maximum number of items in an association as 4, and minimum confidence for rule generation as 10%. This study also excludes the extracted association rules below 1 of lift value. We finally get fifteen association rules by excluding duplicate rules. Among the fifteen association rules, eleven rules contain association between products in "Office Supplies" product group, one rules include the association between "Office Supplies" and "Fashion" product groups, and other three rules contain association between "Office Supplies" and "Home Decoration" product groups. Finally, the proposed product recommender systems provides list of recommendations to the proper customers. We test the usability of the proposed system by using prototype and real-world transaction and profile data. For this end, we construct the prototype system by using the ASP, Java Script and Microsoft Access. In addition, we survey about user satisfaction for the recommended product list from the proposed system and the randomly selected product lists. The participants for the survey are 173 persons who use MSN Messenger, Daum Caf$\acute{e}$, and P2P services. We evaluate the user satisfaction using five-scale Likert measure. This study also performs "Paired Sample T-test" for the results of the survey. The results show that the proposed model outperforms the random selection model with 1% statistical significance level. It means that the users satisfied the recommended product list significantly. The results also show that the proposed system may be useful in real-world online shopping store.

• Journal of Intelligence and Information Systems
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• v.8 no.2
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• pp.139-157
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• 2002

The rapid growth of e-commerce has made both companies and customers face a new situation. Whereas companies have become to be harder to survive due to more and more competitions, the opportunity for customers to choose among more and more products has increased. So, the recommender systems that recommend suitable products to the customer have an important position in E-commerce. This research introduces collaborative filtering based recommender system which helps customers find the products they would like to purchase by producing a list of top-N recommended products. The suggested methodology is based on decision tree, product taxonomy, and association rule mining. Decision tree is used to select target customers, who have high possibility of purchasing recommended products. We applied the recommender system to a Korean department store. The methodology is evaluated with the analysis of a real department store case and is compared with other methodologies.

• Journal of Intelligence and Information Systems
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• v.13 no.4
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• pp.45-63
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• 2007

Recently as ubiquitous environment comes to the fore, information density is raised and enterprise is being able to capture and utilize customer-related information at the same time when the customer purchases a product. In this environment, a need for the recommender systems which can deliver proper information to the customer at the right time and right situation is highly increased. Therefore, the research on recommender systems continued actively in a variety of fields. Until now, most of recommender systems deal with item recommendation. However, in the market in ubiquitous environment where the same item can be purchased at several stores, it is highly desirable to recommend store to the customer based on his/her contextual situation and preference such as store location, store atmosphere, product quality and price, etc. In this line of research, we proposed the store recommender system using customer's contextual situation and preference in the market in ubiquitous environment. This system is based on collaborative filtering and Apriori algorithms. It will be able to provide customer-centric service to the customer, enhance shopping experiences and contribute in revitalizing market in the long term.

• Journal of Intelligence and Information Systems
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• v.26 no.2
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• pp.27-42
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• 2020

Traditional companies with offline stores were unable to secure large display space due to the problems of cost. This limitation inevitably allowed limited kinds of products to be displayed on the shelves, which resulted in consumers being deprived of the opportunity to experience various items. Taking advantage of the virtual space called the Internet, online shopping goes beyond the limits of limitations in physical space of offline shopping and is now able to display numerous products on web pages that can satisfy consumers with a variety of needs. Paradoxically, however, this can also cause consumers to experience the difficulty of comparing and evaluating too many alternatives in their purchase decision-making process. As an effort to address this side effect, various kinds of consumer's purchase decision support systems have been studied, such as keyword-based item search service and recommender systems. These systems can reduce search time for items, prevent consumer from leaving while browsing, and contribute to the seller's increased sales. Among those systems, recommender systems based on association rule mining techniques can effectively detect interrelated products from transaction data such as orders. The association between products obtained by statistical analysis provides clues to predicting how interested consumers will be in another product. However, since its algorithm is based on the number of transactions, products not sold enough so far in the early days of launch may not be included in the list of recommendations even though they are highly likely to be sold. Such missing items may not have sufficient opportunities to be exposed to consumers to record sufficient sales, and then fall into a vicious cycle of a vicious cycle of declining sales and omission in the recommendation list. This situation is an inevitable outcome in situations in which recommendations are made based on past transaction histories, rather than on determining potential future sales possibilities. This study started with the idea that reflecting the means by which this potential possibility can be identified indirectly would help to select highly recommended products. In the light of the fact that the attributes of a product affect the consumer's purchasing decisions, this study was conducted to reflect them in the recommender systems. In other words, consumers who visit a product page have shown interest in the attributes of the product and would be also interested in other products with the same attributes. On such assumption, based on these attributes, the recommender system can select recommended products that can show a higher acceptance rate. Given that a category is one of the main attributes of a product, it can be a good indicator of not only direct associations between two items but also potential associations that have yet to be revealed. Based on this idea, the study devised a recommender system that reflects not only associations between products but also categories. Through regression analysis, two kinds of associations were combined to form a model that could predict the hit rate of recommendation. To evaluate the performance of the proposed model, another regression model was also developed based only on associations between products. Comparative experiments were designed to be similar to the environment in which products are actually recommended in online shopping malls. First, the association rules for all possible combinations of antecedent and consequent items were generated from the order data. Then, hit rates for each of the associated rules were predicted from the support and confidence that are calculated by each of the models. The comparative experiments using order data collected from an online shopping mall show that the recommendation accuracy can be improved by further reflecting not only the association between products but also categories in the recommendation of related products. The proposed model showed a 2 to 3 percent improvement in hit rates compared to the existing model. From a practical point of view, it is expected to have a positive effect on improving consumers' purchasing satisfaction and increasing sellers' sales.

• Proceedings of the Korea Inteligent Information System Society Conference
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• 2004.11a
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• pp.331-339
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• 2004

The preferences of customers change over time. However, existing collaborative filtering (CF) systems are static, since they only incorporate information regarding whether a customer buys a product during a certain period and do not make use of the purchase sequences of customers. Therefore, the quality of the recommendations of the typical CF could be improved through the use of information on such sequences. In this paper, we propose a new methodology for enhancing the quality of CF recommendation that uses customer purchase sequences. The proposed methodology is applied to a large department store in Korea and compared to existing CF techniques. Various experiments using real-world data demonstrate that the proposed methodology provides higher quality recommendations than do typical CF techniques, with better performance, especially with regard to heavy users.

• The Journal of the Institute of Internet, Broadcasting and Communication
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• v.21 no.1
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• pp.87-92
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• 2021

Bias, variance, error and learning are important factors for performance in modeling a big data based recommendation system. The recommendation model in this system must reduce complexity while maintaining the explanatory diagram. In addition, the sparsity of the dataset and the prediction of the system are more likely to be inversely proportional to each other. Therefore, a product recommendation model has been proposed through learning the similarity between products by using a factorization method of the sparsity of the dataset. In this paper, the generalization ability of the model is improved by applying the max-norm regularization as an optimization method for the loss function of this model. The solution is to apply a stochastic projection gradient descent method that projects a gradient. The sparser data became, it was confirmed that the propsed regularization method was relatively effective compared to the existing method through lots of experiment.

• Asia Marketing Journal
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• v.17 no.4
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• pp.43-61
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• 2016

This paper has identified some theoretical reasons and empirical evidence for negative scores that occur in Japan and Korea or unstable NPS scores that can be experienced. A psychological analysis of NPS results sheds light on the validity of the negative NPS scores that are often found in Japan and Korea. Usually customer experience surveys utilize a "single stimulus" such as the "company" or the "company's products / services." However, in the case of the "recommendation to friend" question of the NPS system there are two stimuli namely the "company product/service" and the influence of "friends." Hence, the survey outcomes from this question can be very different when compared with other single stimulus questions such as "overall satisfaction" or "repurchase." Japanese and Korean people may have a positive attitude towards the company but they will provide low NPS scores because they are reflecting that they would not run the risk of ruining their relationships with their friends by making a recommendation. As a result, in the NPS system these people will be labeled as "detractors" when in fact they are "ambivalent customers." Using several Japanese and Korean based marketing research industry examples and case studies, different strategies are proposed to address the issue of negative scores in the NPS system in Japan and Korea. The Customers Psyche appears to be the key determinant factors for both types of behavioural items (items with a single stimulus as well as items with two stimuli).