Predicting online shopping behaviour from clickstream data using deep learning

•We examine deep learning based conversion modeling in digital marketing.•We use LSTM and GRU for clickstream classification to predict e-coupon redemption.•We find high forecast diversity between RNNs and conventional classifiers.•An ensemble of GRU and GBM predicts coupon redemption with high accuracy. Clickstream data is an important source to enhance user experience and pursue business objectives in e-commerce. The paper uses clickstream data to predict online shopping behavior and target marketing interventions in real-time. Such AI-driven targeting has proven to save huge amounts of marketing costs and raise shop revenue. Previous user behavior prediction models rely on supervised machine learning (SML). Conceptually, SML is less suitable because it cannot account for the sequential structure of clickstream data. The paper proposes a methodology capable of unlocking the full potential of clickstream data using the framework of recurrent neural networks (RNNs). An empirical evaluation based on real-world e-commerce data systematically assesses multiple RNN classifiers and compares them to SML benchmarks. To this end, the paper proposes an approach to measure the revenue impact of a targeting model. Estimates of revenue impact together with results of standard classifier performance metrics evidence the viability of RNN-based clickstream modeling and guide employing deep recurrent learners for campaign targeting. Given that the empirical analysis shows RNN-based and conventional classifiers to capture different patterns in clickstream data, a specific recommendation is to combine sequence and conventional classifiers in an ensemble. The paper shows such an ensemble to consistently outperform the alternative models considered in the study.