What are the most successful retail marketing segmentation campaigns?

Retail marketing segmentation is the process of dividing your customers into groups based on their characteristics, preferences, and behaviors. By doing so, you can tailor your marketing strategies to each segment and increase your sales, loyalty, and customer satisfaction. In this article, you will learn about some of the most successful retail marketing segmentation campaigns and how they used different criteria, channels, and messages to reach their target audiences.

1 Geographic Segmentation

Geographic segmentation is based on the location of your customers, such as their country, region, city, or neighborhood. This can help you adapt your marketing to the local culture, climate, and demand. For example, a clothing retailer might offer different products, prices, and promotions depending on the season and weather of each area. A coffee chain might customize its menu, design, and advertising according to the tastes and preferences of each market.

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Kimberley Upton

Head of Planning
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Geographic segmentation has its uses from a demographic indexing POV, yes. But for me, its real value is in hothousing smaller resources where they’ll work hardest, and more accurately proving attribution. There’s so much wastage in mass marketing: Raising awareness where your distribution is patchy? Waste of time. Targeting buyers who would’ve bought you anyway? Waste of money. Regional EPOS data can pinpoint where the category opportunity is strongest, and where your brand is undertrading vs. competitors - allowing you to saturate areas where you can make a real difference, and avoid those where you can’t.

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2 Demographic Segmentation

Demographic segmentation is based on the age, gender, income, education, occupation, family size, and life stage of your customers. This can help you understand their needs, wants, and expectations better and offer them relevant products and services. For example, a toy retailer might segment its customers by age and gender and create different catalogs, displays, and offers for each group. A cosmetics retailer might segment its customers by income and education and target them with different brands, quality, and price points.

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Olga Kuritsyna

Lead Product Manager @ Farfetch | ex Head of Product @ Flocktory; ex Yandex | Product Management in MarTech and ML
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Demographic segmentation primarily serves as a safeguard, ensuring appropriate targeting, like avoiding 18+ product ads for younger audiences. However, when aiming for enhanced performance and relevance, Behavioral Segmentation should be the priority. This is because factors like income or gender may not always dictate consumer choices. For instance, a wealthy individual might still be frugal when it comes to cosmetics, while someone with a modest income could be willing to splurge on these products. Thus, understanding and leveraging behavioral patterns is crucial for effective targeting and improved campaign results.

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3 Psychographic Segmentation

Psychographic segmentation is based on the personality, values, attitudes, interests, and lifestyles of your customers. This can help you appeal to their emotions, motivations, and aspirations and create a stronger connection with them. For example, a sports retailer might segment its customers by their fitness level, activity type, and goals and provide them with personalized advice, recommendations, and support. A travel retailer might segment its customers by their travel style, preferences, and budget and inspire them with tailored content, experiences, and deals.

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4 Behavioral Segmentation

Behavioral segmentation is based on the actions, behaviors, and responses of your customers, such as their purchase history, frequency, loyalty, usage, feedback, and engagement. This can help you optimize your marketing to their current situation, needs, and preferences and increase their retention, satisfaction, and advocacy. For example, a grocery retailer might segment its customers by their purchase frequency and loyalty and reward them with different coupons, discounts, and perks. A book retailer might segment its customers by their reading habits and preferences and send them personalized newsletters, recommendations, and reminders.

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Rachel Saul

Veteran DTC Powerhouse | 2x Founder | Award Winning Shopify & Subscription Expert | I ❤️ Strategy
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In my experience, behavioral segmentation is the most important area to go deep in. Why they buy, why they shop here instead of here, why they choose this product over its competitor - the choices don’t always play into aesthetics or the herd mentality. For example, a woman may choose to purchase a wireless hair curler not because it’s portable or easy to multi-task with. She buys it because she spends $400 on her hair every few months and can’t replicate how her stylist does her hair and this curler promises perfect curls for beginners. So the behavior to unlock here is tied to another past action and mindset she carries.

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5 Hybrid Segmentation

Hybrid segmentation is based on combining two or more criteria from the above categories to create more specific and refined segments. This can help you target your customers more precisely and effectively and deliver more value and differentiation. For example, a furniture retailer might segment its customers by their geographic location, income level, and lifestyle and offer them different products, styles, and services. A music retailer might segment its customers by their age, gender, and music genre and cater to their diverse tastes, needs, and expectations.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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What are the most successful retail marketing segmentation campaigns?

1

2

3

4

5

6

1 Geographic Segmentation

2 Demographic Segmentation

3 Psychographic Segmentation

4 Behavioral Segmentation

5 Hybrid Segmentation

6 Here’s what else to consider

Retail Marketing

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What are the most successful retail marketing segmentation campaigns?

1

2

3

4

5

6

1 Geographic Segmentation

2 Demographic Segmentation

3 Psychographic Segmentation

4 Behavioral Segmentation

5 Hybrid Segmentation

6 Here’s what else to consider

Retail Marketing

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