A retailer has 10 million customer transactions and wants to uncover natural groupings of shoppers so it can design separate marketing campaigns for each group. No labels that describe the desired segments exist in the data. Which general machine-learning task is the best fit for this goal?
Regression to estimate each customer's lifetime value
Binary classification to predict whether a customer will respond to an offer
Clustering on the unlabeled dataset
Running an extract-transform-load (ETL) job to restructure the data
Because no predefined labels describe the desired customer segments, the company needs an unsupervised learning approach. Clustering is the unsupervised task that automatically groups similar records based on patterns in the data, allowing the business to market differently to each discovered segment. Classification and regression are supervised techniques that require labeled examples, and ETL is a data-engineering, not a machine-learning, activity.
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Why are classification and regression not suitable for this task?
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