Exploring Customer Price Preference and Product Profit Role in Recommender Systems
Michal Kompan, Péter Gáspár, Jakub Mačina, Matus Cimerman, Mária Bieliková
Abstract
Most of the research in the recommender systems domain is focused on the optimization of metrics based on historical data such as mean average precision or recall. However, there is a gap between the research and industry since the leading key performance indicators for businesses are revenue and profit. In this article, we explore the impact of manipulating the profit awareness of a recommender system. An average e-commerce business does not usually use a complicated recommender algorithm. We propose an adjustment of a predicted ranking for score-based recommender systems and explore the effect of the profit and customers’ price preferences on two industry datasets from the fashion domain. In the experiments, we show the ability to improve both the precision and the generated recommendations’ profit. Such an outcome represents a win–win situation when e-commerce increases the profit and customers get more valuable recommendations.