Three Ways Shopper Data Can Support Segmentation Strategies

Examples of market segmentation can be seen throughout history, from ancient Greek philosophers who tailored their prose based on audience attitudes to GM building a “car for every purse and purpose.” We know that appealing to known characteristics of a group of people is incredibly persuasive, and with the ability to track digital behavior, modern marketers can know a lot more about consumers.
In the midst of digital advances, marketers’ core objectives have remained quite consistent: learn about your audience, identify a need or aspiration - a way to connect - and focus on that.
The goal may be the same, but the road can be rough, especially with the massive amount of unstructured data available today. Here are three best practices to create and use segmentation in today’s multichannel environment:

1. Opt In
Many retailers are defining market segments at opt-in phase - and they’re doing it by directly asking customers a simple question or two about their product preferences, gender, size, or any other attribute. Response rates are high because shoppers are engaged from the start and might be looking to receive a promotion in addition to signing up for ongoing email or SMS communication.

For example, a marketer might ask subscribers to select the product categories they most prefer from a list. These selections and individual customer IDs are synchronized with the retailer’s CRM, email and SMS databases, enabling retail marketers to start customizing content immediately.

2. Purchase History
Purchase history is one of the most common (and successful) ways for marketers to segment and retarget customers. However, this strategy should be used with caution. It is essential that marketers consider cross-channel activities and the types of products in question before remarketing to a customer based on a prior purchase. An online purchase returned in-store, or an item that is not likely to be purchased regularly (luggage, for example), are examples where using purchase history alone can fail as a segmentation tool.

3. Discounts 
Promotional content is a great way to capture new data about customers. Sending web offers that feature unique barcodes to consumers’ phones or email addresses can tell the retailer a LOT: are these 15% or 25% off customers? What is their average order value? What did they buy? Did they redeem in-store or online? Which store location? Did they prefer to receive the offer via SMS or email or did they purchase online? Adding a web pixel during opt in can also capture additional data on browsing behavior that can be used for powerful segmentation later on.

The concept of market segmentation is not new, but the sheer volume of data available today makes for an endless list of ways marketers can connect with their audience. Finding the best strategies will - as always - depend on who is at the receiving end.

-Kate Atty, Marketing Director, Persio

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