PRODUCTION SCENARIO
A grocery chain has three years of basket data for 2 million loyalty members but has never defined customer segments. Marketing wants to find natural groupings of shoppers before designing campaigns.
Which approach fits this situation best?
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Show answer and explanation
Answer: Unsupervised learning, since clustering finds groupings in unlabeled data
Unsupervised learning works on unlabeled data and is the usual route to clustering tasks such as customer segmentation. Supervised learning needs labeled outcomes, and no segments have been defined yet for it to learn from.