arXiv AI

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.

arXiv Machine Learning
Oct 3

RPTune: Learned Context Curation for LLM Catalog Search

RPTune is an end‑to‑end framework that improves in‑context catalog search for small merchant businesses by learning to curate product catalogs and fine‑tuning large language models (LLMs) with catalog‑grounded supervision. It uses an encoder‑reorganizer curator to order and prune products based on LLM feedback, and then applies context‑relative rewards during LLM post‑training. Across seven real merchants and 100 complex conversational queries per merchant, RPTune boosts search accuracy by up to 31.4 percentage points from curation alone and an additional 10.3 points on average from post‑training.

By Chuxuan Hu, Hejie Cui, Norman Huang, Shubham Kumar Bharti, Wang-Chiew Tan, Sercan \"O. Ar{\i}k
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 AI
Oct 12

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.

By Omar El Housni, Marouane Ibn Brahim
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
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
Jul 9

Large Behavior Model: A Promptable Digital Twin of the Retail Customer

arXiv:2607. 06993v1 Announce Type: new Abstract: Customer behavior modeling underpins recommendation, marketing, and decision support, yet existing approaches either optimize predictive accuracy without explaining decisions or simulate users without grounding them in real behavioral data.

By Wachiravit Modecrua, Krittin Pachtrachai, Touchapon Kraisingkorn
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