Research on Product Selection Model for Small E-Commerce Stores Based on Improved RFM Model
Keywords:Product selection; Product Value; RFM model; Standardization; Entropy Weight Method.
Traditionally, merchants determine whether to enter or exit the market based on the product life cycle. However in the era of e-commerce, the needs of customers are constantly changing, and the life cycle of products is very short. If a merchants accidentally enters the market during the recession period, it may lead to business failure. Therefore, stores must evaluate the value of their products in real time, grasp the trend of product value, and adjust their business direction in a timely manner to ensure the sustainability of their operations. The RFM model is a customer value evaluation model, which includes three important indicators: purchase proximity R, purchase frequency F, and purchase amount M. Products also have indicators such as proximity of purchase, frequency of purchase, and amount of purchase. Therefore, in this article, we propose a products value evaluation model based on the RFM model. In the model, we use the entropy weight method to assign weights to various indicators. Through empirical calculation, analysis, and testing of the business data of sample stores, we confirm that the model is effective in Product Selection for small e-commerce stores.
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