Effective customer segmentation is one of the best ways retailers can stand out from the competition, maintain a strong level of engagement and grow their market share. By using business intelligence software, a business doesn’t just tap into the many dimensions of data it collects about operations and consumers. It does so in a way that provides useful returns and connects with their audience of shoppers on the small group and individual levels. To make offers and promotions relevant and avoid the substantial issues that come along with inaccurate segmentation, retailers have to take stock of their current strategy and consider strategies for improvement.
“Retailers have to make sure timeliness is a major element of segmentation efforts.”
Maintaining and increasing customer segmentation relevance
An article on the IBM Big Data Hub by IBM social business manager Valerie Moloney highlighted personal experiences with poor segmentation. She noticed instances where products were seemingly pitched to small demographic subgroups or to her specifically, but those advertisements failed to connect with her current tastes and personal preferences. This raises two important points about segmentation efforts and their effectiveness. The first is that an unsuccessful effort to target a customer can have a negative return and work against the main goal of the process. The second is that retailers have to make sure timeliness is a major element of segmentation efforts.
Marketing Land listed seven essential variables to target when trying to connect with consumers individually and in subgroups, and it’s important to recognize many of them are time dependent. For example, geography is a key element for segmentation for a variety of reasons, from the availability of products to a customer’s distance from the closest store. However, using outdated geographical information won’t do much beyond making marketing and engagement efforts seem outdated and lacking in value for customers.
Using the right software to manage critical marketing and engagement efforts helps retailers avoid the pitfalls of outdated information and other issues common in an increasingly data-driven marketplace. Aviana offers a variety of IBM Cognos solutions that help retailers conduct useful forecasting and analysis as well as make timely, effective and prudent decisions in a variety of different contexts. With a strong understanding of the current situations of customers, marketing and engagement becomes more accurate and provides better returns. Learn more by visiting our dedicated page for the retail industry, featuring a variety of information and insight specific to retailers’ needs.