Modelling Delayed Redemption with Importance Sampling and Pre-Redemption Engagement

Rewards-based programs are popular within e-commerce online stores, with the goal of providing serendipitous incentives to delight customers. These rewards (or incentives) could be in the form of cashback, free-shipping or discount coupons on purchases within specific categories. The success of such programs relies on their ability to identify relevant rewards for customers, from a wide variety of incentives available on the online store. Estimating the likelihood of a customer redeeming an incentive is challenging due to 1) data sparsity: relatively rare occurrence of coupon redemptions as compared to issuances, and 2) delayed feedback: customers taking time to redeem, resulting in inaccurate model refresh, compounded by data drift due to new customers and coupons.