Segmentation is a basic first step a retail organization can undertake to understand the behavioral characteristics exhibited by the shoppers and to build a comprehensive behavioral portrait of the customers shopping at the store. Segmentation is basically the process of dividing shoppers into meaningfully distinct groups.
Once shoppers are grouped into distinctive segments each group can be offered a different marketing mix plan depending on behavioral characteristics they exhibit.
Segmentation is both an art and a science where behavioral niches are identified and pin pointed marketing actions are initiated as opposed to “carpet bombing” the entire customer base. It is a very selective demand stimulation strategy which the retailer can adopt.
Before getting into the actual process of segmenting shoppers in your store it makes sense to get an understanding of the flavor of business questions which can be answered using a loyalty based segmentation framework based on raw POS, Store and Loyalty card data.
What are some interesting business questions which are available in the raw data but remains unanswered in most organizations
1) Do you know the behavioral portraits of your customer? Are they price sensitive? Brand conscious? Convenience shoppers? “Once a fortnight” weekend grocery shopper?
2)Which customer segments drive repeat purchase behavior?
3)Which customer segments exhibit propensities to you strategic categories and brands?
4)Do you know what the drivers of behavior are for each of your customer segments?
5)Do you know what behavior discriminates one customer segment from another?
6)How are segment memberships changing over time ? What does it tell us about our product mix, price and any competitive activity in the market where the store is located?
7)How can customer behavior portraits be used to drive customer treatment strategies and targeted outbound campaigns?
8)How can customer behavior portraits be used to drive in store experience and merchandise mix?
9)How can you use customer behavior portraits to increase the intimacy level with the customer?
Once shoppers are grouped into distinctive segments each group can be offered a different marketing mix plan depending on behavioral characteristics they exhibit.
Segmentation is both an art and a science where behavioral niches are identified and pin pointed marketing actions are initiated as opposed to “carpet bombing” the entire customer base. It is a very selective demand stimulation strategy which the retailer can adopt.
Before getting into the actual process of segmenting shoppers in your store it makes sense to get an understanding of the flavor of business questions which can be answered using a loyalty based segmentation framework based on raw POS, Store and Loyalty card data.
What are some interesting business questions which are available in the raw data but remains unanswered in most organizations
1) Do you know the behavioral portraits of your customer? Are they price sensitive? Brand conscious? Convenience shoppers? “Once a fortnight” weekend grocery shopper?
2)Which customer segments drive repeat purchase behavior?
3)Which customer segments exhibit propensities to you strategic categories and brands?
4)Do you know what the drivers of behavior are for each of your customer segments?
5)Do you know what behavior discriminates one customer segment from another?
6)How are segment memberships changing over time ? What does it tell us about our product mix, price and any competitive activity in the market where the store is located?
7)How can customer behavior portraits be used to drive customer treatment strategies and targeted outbound campaigns?
8)How can customer behavior portraits be used to drive in store experience and merchandise mix?
9)How can you use customer behavior portraits to increase the intimacy level with the customer?
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