There are many reasons why Ecommerce store owners fail to target the desired customers, and one of the causes is there is no adequate segmentation of existing customers in their business. Most of the merchants live with the presumption that mass marketing will bring them more sales and customers. But this is a costly, time consuming and unproductive approach to deal with a large customer base at a time. Instead, use the concepts of customer segmentation and target the relevant customer in the digital sphere.

Now you would wonder what customer segmentation is? And how we can use it in our Ecommerce business? And what are the benefits of having customer segmentation? and many such questions would hit your mind. You will get all your answers from this blog.


Let’s start with what is Customer Segmentation?

Customer segmentation refers to the process of dividing your large audience into different groups based on various categories like demographics, lifestyle, and most importantly their physiographic behaviour. Digital marketers can make the best use of this concept to implement it while targeting the audience.

Customers have become more committed to making quick purchases than earlier. And to give the customer what they want is the biggest challenge of marketers. You need to think and behave as a customer before marketing so that you can take them in the process of buying products. Using data mining techniques, you can do the bifurcation of your store customers.


What are the most basic segmentation factors?

Let’s take some of the concepts which will help you to categorize your store data into different segments.

Generally, customer segmentation takes place under the following categories:

  • Demographic – It means dividing the customers on demographic variables like age, gender, marital status, family size, income, religion, race, occupation, nationality, etc. For example, an accessories store owner would market their branded handbags according to the gender means females and can also consider age group from 18 and above.
  • Geographic – You can divide your customers by their geographical locations, such as by city, state, country, international region or the west coast regions. You can also separate from rural, urban, suburban and even by climate or the total population of each area. For example, a fashion store is aiming to target their customers geographically. In south India, winters are normal as compared to north India so marketer will focus on selling casual clothes in southern India and winter clothes in North India.
  • Behavioral – This refers to the grouping of cumulative buyers in a store into similar groups based on their mutual buying behavior patterns. For example, people tend to buy chocolates and sweets on occasions. Another example I would like to quote here is, people get inspired by other customers in purchasing products.
  • Psychographic – segmenting your market based on consumer personality traits, values, attitudes, interests, and lifestyles. For example, your customer’s buying and spending habits, hobbies, priorities, and beliefs.


How does Customer Segmentation work?

To be effective, use systematic and scientific data collection and analysis processes to execute the best customer segmentation.

  • Divide the store data into meaningful and measurable segments according to customers’ needs, their past behaviors or their demographic profiles.
  • Learn the profit potential of each division by examining the revenue and expense impacts of serving each segment.
  • Aim at targeting segments according to their profit potential and the company’s potential to serve them exclusively.
  • Invest resources in tailoring product, service, marketing and distribution programs to match the needs of each target segment.
  • Rate the performance of each segment and improve the segmentation strategy over time as market requirements change decision making throughout the business.


Key benefits of using customer segmentation:

If you know the correct way of implementing and executing your strategies then only you can see the impact of benefits on your business. Being unaware or having half knowledge can be dangerous will not lead you to accomplish your goals. If you have clarity about your strategies and knowing how to use it correctly, you can experience the positive outcomes of it.

Let’s have a positive outlook on customer segmentation.

  • More customer retention – This can bring you a large number of returning customers.
  • Improves your rank in the competitive market – It makes your business stand above your competitors.
  • Builds brand identity – Your brand gets well recognized.
  • Better customer relationships – You develop a strong relationship with your customers by giving them what they desire.
  • Heads to price optimization – You use your resources to the fullest by targeting the right segment.
  • Economies of scale – You can sell your products at the lowest potential cost and maintain your business scalability.
  • Develops channel of distribution – Proper segmentation of your market will direct you to effective targeting.


Whether you are a large firm or a small-scale industry, understanding your market is an integral part of running a successful Ecommerce business. Customer segmentation will help you learn more about particular groupings within your customer base and how can you better reach them.

So, segment your customers very carefully as your whole business plan depends upon your target audience only.

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