Before we dig deeper into customer segmentation, think of the people in your social circle who proudly claim themselves as Thronies, Whovians, or Narnians.
What’s the best gift you can buy for them? Definitely something that relates to their favorite characters.
For instance, if you have a friend who’s fond of Game of Thrones, you may consider gifting them dragon egg props. On the other hand, a Doctor Who fan might appreciate a Sonic Screwdriver.
In other words, you’re pinpointing what a person is interested in and offering them exactly that.
The good news?
This strategy isn’t limited to just buying gifts for friends. Instead, you can also apply it when messaging your customers or suggesting products to them via customer segmentation.
Let’s explore what exactly customer segmentation entails and examples of it you can use in your ecommerce business.
What is customer segmentation?
Customer segmentation refers to a marketing strategy in which you divide the customers of your business into smaller segments or groups based on their shared traits. In the above example of Whovians, Thronies, and Narnians, we’re grouping people with a distinct interest in a specific fantasy world.
Similarly, you can divide customers into different segments based on their age, occupation, gender, hobbies, device usage, location, and other attributes.
Customer segmentation methods
Since the segmentation process relies on common characteristics, you can create limitless groups depending on what you consider important for promoting a particular product.
That said, you can typically group customers via the following five types of customer segmentation models:
Demographics refers to general characteristics that define a population, such as age, gender, occupation, and education. So, in demographic segmentation, you divide people into different customer segments based on these characteristics.
For instance, a clothing store that promotes different products to teens and adults is using demographic segmentation to drive its business.
If you manage a global ecommerce store, you wouldn’t want to promote warm parkas to shoppers in India just because it’s snowing in Canada. With geographic segmentation, you can prevent that misstep by setting up location-based groups of customers.
Customers’ interests, hobbies, and viewpoints also matter. You can weave sports events, musical concerts, and movie releases into your marketing by configuring segmentation groups around them.
This way, you can market NBA T-shirts to basketball fans and NFL jerseys to people passionate about football.
You can also segment your customers based on how they interact with technology to get twofold benefits. First, you can track whether they spend time on mobile or desktop to decide how to message them.
Second, you can divide them into segments based on how they approach various technologies — video games, streaming, software, and mobile devices — and promote related products to them.
While the other methods are rather static, behavioral segmentation relies on dynamic changes in customer behavior when interacting with your brand.
In other words, you group buyers into different segments based on how they behave in relation to your brand. Examples include people clicking away after checking out your ad, shoppers abandoning a cart, visitors purchasing your product for the first time, and loyal customers coming back to repeat-purchase a product.
Customer segmentation examples
Now that we’ve looked into the basic grouping methods, let’s explore different customer segment examples that ecommerce store owners can benefit from.
Age-based customer segments help businesses of all sizes. After all, a 21-year-old would have vastly different needs than a person of 67.
So, depending on your business, consider grouping your customers into teenagers, young adults, adults, and seniors. Get insights into the product-segment fit — as in which product is particularly popular among certain age segments.
With all this data, you can create tailored marketing campaigns for your ecommerce store. For instance, if you sell footwear, you can consider promoting trendy sneakers to young adults and your comfort line to adults and seniors.
For example, check out this email from Fulton. It’s targeting older adults who need therapeutic footwear.
Like age, gender also serves as a great way to segment your customer base. After all, men likely won’t be shopping for mom-style jeans in your online clothing shop.
Similarly, gender-based marketing can be instrumental in promoting footwear, grooming products, and fitness products. In fact, you essentially need to segment buyers into separate groups to avoid promoting irrelevant products to your target audience.
For instance, the following email from Boldking won’t amount to much if it lands in a woman’s inbox.
Whether you operate globally or within a specific country, chances are you’ll have customers with variable pain points because of their location.
For instance, if one area experiences frequent rain, shoppers there might be looking for raincoats. In contrast, buyers in another location might like moisture-wicking clothes.
In such a case, you’ll need to segment your customers based on their location to send effective marketing messages. For instance, Salomon’s email promoting waterproof jackets and shoes would sound better if the recipients received it on a rainy day.
Occupation influences shopping behavior, too. First, if you sell expressive items like graphic tees, you can filter shirts like Redbubble to promote products focused on different occupations.
Besides that, you can use occupation-specific events to come up with relevant deals for targeting customers. One of the best examples of such a customer segment in action is back-to-school sales for teachers.
For instance, you can curate a list of products helpful to teachers and send it their way via a personalized text message, like:
“Hello, [Teacher’s Name]!
“Gear up for a successful school year with our exclusive back-to-school sale! Enjoy 20% off on classroom essentials, teaching aids, and more. Shop now at [link].”
5. Marital status
You can also configure customer segments around marital status to offer personalized recommendations to your buyers. For example, Valentine’s Day is a great time to encourage customers to buy gifts for their significant others, like in this Oura email:
In fact, you can even use appropriate messaging to drive them to buy gifts for their partners from you. For instance, here’s an SMS template that might come in handy:
“Show your affection, [First Name], even before you say ‘I love you.’ Enjoy a 25% discount on all orders above $50. Act fast — this offer won’t last long. Click [link].”
Customer segments based on hobbies and interests let you target smaller, passionate audiences to promote your new products. For example, if your audience follows USA Network’s Suits, you could market your three-piece suits the Harvey way by sending the following message:
“Don’t just dress for the job; dress for the corner office.
“Discover the timeless elegance of our exquisite three-piece suits inspired by Harvey Specter’s iconic style. Get your suit today with a special discount! Use code HARVEY1 at checkout to get 5% OFF.
“Shop now at [link].”
Likewise, you can find opportunities to promote products to hockey fans, hiking enthusiasts, and Swifties.
If you own an apparel store, you can also create groups based on lifestyle to ease the purchasing journey of different customers.
Perhaps you could create a separate category for minimalist shoppers looking for essential clothes in basic colors. If you also offer fashion-forward items, you must have a trending category to aid customers searching for the in-style look.
For example, Crescent, a brand focused on minimalist shoppers, has a separate collection named “The Essentials” to help its main customer segment.
Besides the general age-based groupings, you might also benefit from segmenting customers based on generations — like Gen Z, millennials, and Generation X.
That’s not to say you need to create separate categories for these generations in your ecommerce store. Still, you can use the generation-based segments to decide on the phrasing of your marketing messages to them.
In particular, while you may use emojis in your texts to Gen Z, you’re better off avoiding them when communicating with baby boomers.
9. Cart abandonment
According to 2023 Baymard Institute data, customers leave the buying journey midway in over 70% of ecommerce shopping sessions.
As an online store owner, you can increase your revenue by re-engaging cart abandoners. And using customer segmentation, it’s easier to do so.
For example, you can send personalized messaging to remind them about their abandoned cart. Plus, you can highlight specific offerings, like free shipping, to further incentivize them to buy.
For instance, check out this abandoned cart email from Alex Mill. If the customer left their selected items behind because of high costs, they might feel more inclined to complete their purchase with 15% off.
10. New customer engagement
New customers typically don’t engage with your brand via your online shop. Instead, they may click on your social media ads, comment on your posts, or message your brand profile.
They have different needs than your loyal customers, and you may need to highlight your unique offerings to sell your brand to them via welcome emails. That’s why new customers often belong to a separate segment.
And if you have a marketing tool that can group such users, you may have a better chance of getting them to complete their purchases by directing them to bestsellers, giving them discounts, or suggesting landing pages they can check for more information.
11. Coupons and deals
Chances are you’ll have customers who love using coupons and deals — whether it’s buy 3, get 1 free, or spend $20 to get free shipping.
Such bargain-loving shoppers are a great customer segment for increasing your revenue whenever you need a boost.
In particular, you can turn to them before the season’s end with clearance sales so you can clear out your stock before the next batch of items arrives in your warehouse.
According to the U.S. Bureau of Labor Statistics, employees at about 27% of American businesses were working remotely in some capacity during August and September 2022. And it’s not just the U.S. The nature of the work environment has changed globally since the pandemic.
That’s why the type of workspace can also be an excellent way to group your customers and connect with them on a personal level.
For example, if you sell office supplies, besides targeting companies, you can add a home office category to help individuals who work remotely.
Jabra, a global audio equipment brand, excels at this by offering specific tools based on how customers work.
If your online store sells other companies’ products, you might encounter shoppers who buy products from a specific brand.
To benefit from such data, you can set up customer segments based on brands and use them in your messaging, like:
“Flash Sale Alert!
“Enjoy 20% OFF on products of [Your Favorite Brand]. Whether you’re into [brand-specific points], we’ve got you covered.
“Shop now at [link].”
14. Customer interactions
If someone regularly opens your marketing emails and clicks on the relevant link only to leave their buying journey midway, they have different pain points than subscribers who never even open your emails.
For instance, such a customer might like your products but hasn’t made a purchase because of high prices, expensive shipping, or out-of-stock items.
But if you can use your marketing automation platform to segment these users by their respective interactions, you may be able to encourage them to complete their purchase by offering a discount, free shipping, or an alternative product.
15. Historical purchases
While personal data, such as age, gender, and occupation, helps shape your marketing efforts, you also need customer segments that reflect what people are actually buying to fine-tune your strategy.
For instance, consider first-time parents. It would be difficult to segment them unless you run an ecommerce website that specializes in products for newborns. But if you track customer purchasing behavior, you can tag those who buy baby gear, nursery items, and feeding supplies as first-time parents.
Similarly, you can rely on purchase history to identify other unique groups and suggest relevant bestsellers to get them to convert. For example, here’s Amazon recommending popular products in the beauty and PC categories based on past purchases.
16. Average order value
How much money a customer spends on an average order is a fantastic measure of how valuable they are to your business. You can use this information to segment your buyers and do on-point marketing.
For example, you can identify customers with the highest AOV and make an effort to retain them with exclusive offers and deals to increase their lifetime value. Besides that, you can encourage the low-AOV segment to increase their spending by offering free shipping over a certain order amount.
17. Device type
Whether your customers interact with your shop on mobile or desktop matters since mobile phones have limited space to play with. That said, if the majority of your customers are mobile users, you must make your on-screen ads responsive and concise.
That also extends to other forms of marketing. If most shoppers open emails on mobile, you must put extra effort into optimizing your emails for mobile or consider investing in an SMS marketing strategy.
Plus, you can segment users who’ve made a purchase on mobile devices and send them personalized messages to download your ecommerce application to get a discount on their next order.
For example, check out this amazing email from Postmates encouraging customers to download its app:
18. Browsing behavior
Similar to purchasing behavior, browsing behavior is an important customer segmentation strategy since it helps you recommend relevant products to customers in real-time.
For instance, say a customer frequently views chinos in basic colors. In that case, you can promote chinos via display ads with appropriate messaging to drive them to purchase.
Or if a specific customer frequently visits an out-of-stock product page, you can segment them to send an update message when the item gets restocked or recommend alternatives picked by other customers.
Once again, Amazon does a stellar job by serving customers with a row of items inspired by their browsing history on its homepage.
You can also collect the birthdates of your customers and make a dynamic customer segment to send birthday wishes with special gifts, exclusive discounts, or remarkable deals.
In fact, it’s a great way to bolster brand loyalty among your target customers.
For example, check out this birthday message from e.l.f. Cosmetics, which makes excellent use of customer data to include the recipient’s first name:
With so much competition in the ecommerce ecosystem, you lose customers to your competitors every day. In some cases, it may be because they forgot your store’s name — which is likely given the immense amount of background information modern shoppers consume every day.
But, if you segment your inactive shoppers, you can try to retarget these customers by sending them engaging emails.
For instance, check out this cheeky message from Urban Outfitters. Not only is this email interesting, but it also roleplays best friends breaking up, which might encourage customers to come back.
Christmas, Black Friday, USA’s Independence Day, Holi, and Eid can be great opportunities to increase revenue, as well. That said, not every customer would be eager to receive a sale focused on Eid-related products.
So, consider grouping your customers based on their cultural preferences to recommend relevant products and send them personalized messages surrounding their special events.
For instance, if some of your potential customers celebrate Holi, you can send the following SMS to only those buyers:
“Happy Holi, [Customer’s Name]!
“May your life be as colorful and vibrant as this beautiful festival of Holi!
“Celebrate in style with our latest Holi collection! Enjoy 30% off with code HOLIJOY at checkout. Shop now at [link].”
Finally, you can use segmentation to improve your relationship with your most loyal customers.
For instance, besides looking at their historical purchases and browsing behavior, you can track their overall customer journey to highlight and celebrate their milestones.
Examples of celebrating milestones include:
- Finishing 10 purchases: Send a personalized email to shoppers to thank them and offer a 15% discount on their next order.
- 1-year anniversary: Celebrate the anniversary of a customer’s first purchase with you and give them free shipping for a limited time.
- Referring 5 friends: Thank buyers who direct their friends to your ecommerce website and include a gift card they can use with your store.
Leveraging segmentation to personalize the customer experience
By incorporating in-depth customer segments into your marketing, you can transform your campaigns to connect with shoppers at an individual level — by offering them the experiences they’re looking for.
That said, while segmentation provides a platform for your marketing strategies, you’ll need a robust marketing tool that can make use of these extra-specific groups and help you connect with each customer.