Dynamic Bayesian Network–Based Product Recommendation Considering Consumers’ Multistage Shopping Journeys: A Marketing Funnel Perspective

Abstract

Recommender systems are widely used by platforms/merchants to find the products that are likely to interest consumers. However, existing dynamic methods still face challenges with regard to diverse behaviors, variability in interest shifts, and the identification of psychological dynamics. Premised on the marketing funnel perspective to analyze consumer shopping journeys, this study proposes a novel and effective machine learning approach for product recommendation, namely, multi-stage dynamic Bayesian network (MS-DBN), which models the generative processes of consumers’ interactive behaviors with products in light of their stage transitions and interest shifts. In this way, consumers’ stage-interest-behavior dynamics can be learnt, especially the variability in interest shifts. This provides managerial implications for practice. MS-DBN demonstrates significant performance advantage with general applicability by extracting the generalizable regularity during shopping journeys, which compensates the diversity and sparsity frequently observed in consumer behaviors. In addition, aided by the identification strategies integrated into the learning process, the latent variables in the model can be detected such that consumers’ invisible psychological stages and interests in products can be identified from their observed behaviors, shedding light on the targeted marketing of platforms/merchants and thus enriching the practical value of the approach.