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Six Benefits of Segmentation for Retail

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Consumers today have more choices than ever before. Retailers have to give their customers a reason to choose shopping with them over their other options. To help achieve this, some retailers have begun segmenting customers based on factors like shopping habits and spending levels. This segmentation of customers allows retailers the advantage of finding and better understanding their highest-value customers. Retailers then tailor their business and offerings toward these customers to be more attractive shopping destinations.

Segmenting customers allows retailers to be more accurate. Instead of making assumptions about who will buy what products, retailers can go in-depth to see what customer segments are buying what. This allows them to better plan and allocate their merchandise and resources where it is needed most. Along those same lines, segmentation allows marketing and advertising to be more measured more accurately by segment as well. Retailers can also reach different segments using different channels like Facebook, Twitter, LinkedIn, Instagram, Snapchat, and others.

Retailers can also benefit from segmentation from the ways it cultivates the high-value customers. Instead of just using promotions on the general public, reward your high-value customers and specifically target them to increase their spending and loyalty. Loyalty programs are a great source of data into what exactly your customers are doing and want. Retailers shouldn’t make the mistake of trying to drive mass adoption for their loyalty program, but instead better serve their core, high-value customers.

Another way retailers can use segmentation is to better tailor themselves to their high-value customers. Retailers can change their design, signage, website, physical layout and ways that customers interact in order to better attract customers and give them a better customer experience (CX). When retailers are redesigning around their high-value customers, they should take into account the different channels the customers use. Retailers need to make sure they give the same messaging and consistent experience across every platform a customer might use during a sale.

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With all the different options available to customers now, retailers are fighting to attract customers and retain them. Segmenting customers into high-value segments gives retailers advantages in improving their overall CX. Some of these advantages include more accurate assortment, more accurate advertising and marketing, more effective promotions and loyalty programs, better shopping experiences, and use of multi-channel touchpoints. Taking the steps to learn more about your customers can help retailers not only survive but thrive. Reach out to learn more about how TechStak can help you find and hire the right tech pros to evolve your business.

Check out TechStak’s free CX Workbook to analyze and optimize your CX efforts! Also, don’t forget to check out the 7 Tragic Fails of the Customer Experience. For more on CRM solutions and Marketing Automation, make sure to read our October interview with Marketing Expert Chad Ghastin.

About the Author, Sean Walsh

Sean is a Digital Marketing and Brand Communication Intern at TechStak. He has over four years of experience running and growing corporate social media platforms. Sean is a lifelong lover of the latest technology and gadgets. He attends the University of Michigan-Dearborn and will soon graduate with a Bachelor of Business Administration focused in Marketing.

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