arXiv AI

AI-Mediation in Retail Markets: Revenue Effects and Assortment Optimization

The paper investigates how AI shopping assistants influence retail assortment planning by mediating product visibility. It models two mediation types—deterministic ranking and stochastic Plackett‑Luce ranking—and shows that ignoring AI mediation can lead to significant revenue losses (2.52%–11.37%). A simpler deterministic plug‑in approach reduces losses to at most 0.53%, and the authors prove that deterministic mediation allows a fully polynomial‑time approximation scheme for assortment optimization when customer segments are fixed.

arXiv Machine Learning
3d ago

Borrowing Strength Across Stores: Transfer Learning for Choice-Based Revenue Management

The paper proposes a shrinkage estimator that blends store‑specific demand estimates with pooled information from other stores under a multinomial logit model, addressing the trade‑off between local data scarcity and cross‑store heterogeneity. By leveraging self‑concordant‑like properties of the MNL likelihood, the authors derive finite‑sample performance guarantees and regret bounds for assortment and pricing decisions. Numerical experiments and an empirical study on European apparel retailer data show that this transfer‑learning approach improves out‑of‑sample product prioritization and revenue capture compared to both local estimation and full pooling.

By Recep Yusuf Bekci, Stefanus Jasin, Joline Uichanco
arXiv Machine Learning
Aug 13

Diffusion-Based Data-Driven Assortment Optimization

arXiv:2608. 11419v1 Announce Type: new Abstract: Assortment optimization is a fundamental problem in revenue management, typically addressed using parametric choice models such as the multinomial logit (MNL) and its variants.

By Junyi Liao, Xiaohui Jiang, Zhengwei Tong, Ethan X. Fang, Vahid Tarokh
arXiv AI
Jun 30

Assortment Planning with Sponsored Products

arXiv:2402. 06158v2 Announce Type: replace-cross Abstract: In the rapidly evolving landscape of retail, assortment planning plays a crucial role in determining the success of a business.

By Shaojie Tang, Shuzhang Cai, Jing Yuan, Kai Han
arXiv AI
Jun 2

Generative AI and Sales Productivity: Field Experiments in Online Retail

arXiv:2510. 12049v4 Announce Type: replace-cross Abstract: We quantify the short-term impact of Generative Artificial Intelligence (GenAI) on sales performance through a series of large-scale randomized field experiments involving millions of users and products at a leading cross-border online retail platform.

By Lu Fang, Zhe Yuan, Kaifu Zhang, Dante Donati, Miklos Sarvary
arXiv AI
Oct 15

Better Capturing Interactions Between Products in~Retail: Revisited Negative Sampling for~Basket Choice Modeling

The paper presents a basket‑choice model that learns embeddings to capture interactions among products, prices, and stores, using random negative sampling to handle large item sets. Experiments on synthetic data demonstrate that sampling based on the actual assortment improves performance over existing methods. The model is validated on millions of transactions from Fortenova Group, showing potential to aid category managers in retail decision‑making.

By Jules D\'esir, Vincent Auriau, Martin Mo\v{z}ina, Emmanuel Malherbe
arXiv Machine Learning
Aug 27

DCEO: Direct Causal Effect Optimization for Long-Term User Value Modeling in E-commerce Search

The paper introduces DCEO, a data‑driven framework that learns item‑level proxy scores directly aligned with long‑term user objectives in e‑commerce search. It aggregates these scores into a user‑level metric, measures alignment via relative causal effect, and uses an actor‑critic model to generate context‑dependent fusion weights for multiple objectives. Offline experiments and a 41‑day online A/B test show DCEO improves GMV by 0.36% over traditional proxies.

By Junzhao Zhang, Tao Zhang, Liren Yu, Feiyi Dong, Zhixuan Zhang, Dan Ou, Haihong Tang
arXiv Machine Learning
Aug 31

Robust Assortment Optimization from Observational Data

The paper introduces a robust framework for assortment optimization that addresses distributional shifts in customer choice behavior. It demonstrates computational tractability when the nominal choice model is known and develops statistically optimal algorithms for the data‑driven setting, providing matching upper and lower bounds on sample complexity. The authors identify "robust item‑wise coverage" as the minimal data requirement for efficient robust learning, bridging robustness and statistical efficiency in assortment planning.

By Miao Lu, Yuxuan Han, Han Zhong, Zhengyuan Zhou, Jose Blanchet