Customer segmentation in an online store - why and how?

Segmentation is dividing customer groups into parts in order to target marketing measures. In practice, it is a means for companies of all sizes to understand and respond to the needs of consumers and different target groups.

Segmentation is necessary for any kind of business success and increasing conversions (sales) of e-commerce.

In order to effectively target the company's marketing to the right people and to serve customers in the best possible way, online retailers should and should also use customer segmentation.

Why is customer segmentation done?

Listed here are a few benefits that segmentation brings to e-commerce.

• Marketing Targeting . After segmentation, marketing resources can be directed to the right place and to the right people. An ever-smaller share of resources is spent on the wrong people, who do not belong to any of the online store's target groups and are not going to buy. You will be able to build more effective marketing automations that make selling easier.

• Growing customer lifetime value . With the help of segmentation, more and more customers are made to make a repeat purchase, which means that the income per customer increases (the customer's lifetime value increases). As you know, increasing the income from an existing customer is significantly more affordable than acquiring a new customer.

• Improving customer loyalty . With the help of segmentation, it is possible to personalize the shopping experiences of different customer groups and, through research, to increase satisfaction with the service of the online store and the customer's commitment to the company.

• Deepening customer understanding . Utilizing segmentation and purchasing behavior data provides information on customers' purchasing habits and trends. This helps to react in time to changes in customer preferences and behavior and to improve the e-commerce experience, products and the entire company's strategy, thus also being able to stay one step ahead of competitors.

• A more efficient online store . As already mentioned, segmentation helps to develop the e-commerce implementation, product selection and service according to customer needs and to ensure that these areas respond to them.

• Increasing awareness . With the help of segmentation, online store customers are reached on a more personal level, which increases the company's memorability, builds brand identity and increases recognition.
  
  

In addition, the information obtained from segmentation can be used effectively in other digital marketing channels, such as advertising campaigns and e-mail marketing.

This is how you implement customer segmentation in the online store

Segmentation is most commonly done based on demographic (age, gender, etc.) , geographic (location) , psychographic (hobbies, values, etc.) data.

Although this information plays an important role in mapping customers' needs and preferences, segmentation in an online store should definitely be based on real-time data from purchasing behavior .

The most useful strategy for e-commerce is to define segments based on the customer's purchasing behavior and use this information to improve and personalize the shopping experience. In this way, the online store can generate conversions as efficiently as possible and meet the needs of several different target groups at the same time.

The end result is an individualized online shopping experience, where the customer comes across exactly those products and offers that are more likely to appeal to his segment.

Customer segments can be created in the online store on the following basis, for example:

• Purchase history

• Reviewed products

• Browsing habits

• Time spent in the online store

• Using Offers

• Customer loyalty

• Objects of interest and needs

• Personal preferences (e.g. for brands and models)

• Age

• Sexual

• Geographical location

These and other information related to purchasing behavior can be monitored using, for example, the Google Analytics tool.

Growly as a help in customer segmentation and digital marketing of online stores

Customer segmentation is necessary in every online store, as it is a critical part of every company's strategy and the success of the online store.

However, the journey from segmentation to improving the online shopping experience and growing your business can be long and rocky if you don't know what to do.

If you need help in this matter, our digital office can help. Growly has extensive experience and proven results in segmenting companies and online stores in many different industries. We help you find a strategy that suits your needs.