Shelly / Guide
Shelly guide

Product segments (K-means)

Segmentation turns 50 SKUs into a handful of groups that each need a different strategy.

At a glance

How it works

  1. Features are standardised (z-scores) so no single unit dominates.
  2. K-means runs for k = 2…5 and the best silhouette is kept.
  3. PCA projects the 6 dimensions onto 2 for the chart only.
  4. The R validation script re-checks with the gap statistic and MANOVA.

Method & formulas

Silhouette
(b − a) ÷ max(a, b), where a = mean distance within a cluster and b = to the nearest other cluster
Jaccard
|A ∩ B| ÷ |A ∪ B| between original and resampled clusters

How to read it

Limits & safeguards

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