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Customer Journey

How market segmentation has changed – and how you can keep up

Written by Tony Loxton
Jan 24

As with all aspects of modern life, market segmentation has evolved in line with technology. Today, consumers can purchase items in a matter of seconds, without leaving their couch or desk. They’re sent targeted, highly personalised offers via text, and browse Pinterest and Instagram before handing over their cash.

This major shift in consumer behaviour has – and continues to – precipitate a massive shift in market segmentation as brands attempt to retain customers who’re spoilt for choice, constantly connected and in-the-know. In terms of Australian consumers in particular, this evolution is so marked that Melanie Ingrey, writing for Nielsen, says: “... when we look at how consumers obtained information and engaged with brands 10 years ago, it’s as if we’re looking at an entirely different industry playing field today.”

The very first iteration of market segmentation was based on a mere handful of qualities.

In particular, age, sex and once in a while, lifestyle or vocation. For example, twenty years ago, a diaper company would target stay-at-home moms in their mid-thirties. And that’s where their market segmentation ended. While these sweeping generalisations were enough for brands to gain the attention and the patronage of yesteryear’s consumer, they’re far from sufficient today.  Thanks to the proliferation of data available regarding today’s consumers, brands can bolster traditional market segmentation markers and supplement them with all manner of data. These include: location; an individual’s last interaction with a brand; their device of choice; relevant buying history; credit score; social media activity; the need or challenge that the brand in question can remedy, and more.

As the trend of customising an offering to a highly specific audience continues to gain traction, additional means of market segmentation will come to the fore.

For example, in a previous article, we discussed addressable TV advertising, where “technologies [that] enable advertisers to selectively segment TV audiences and serve different ads or ad pods (groups of ads) within a common program or navigation screen.”  Because it’s now possible for marketers to segment consumers according to both digital device usage and their TV consumption behaviour, it’s far easier to understand these market segments, as well as the ways in which they respond to a brand’s marketing. When it comes to mobile devices in particular, less than a third of Australians have made a purchase via a smartphone, says this Smartinsights article. The two major barriers to mobile shopping in Australia are security concerns and a preference for online shopping via a desktop.

Basing your market segmentation on device usage and behaviour enables you to continuously experiment with different marketing methods, finesse your approach and reduce costs by scrapping poorly-performing, expensive campaigns.

The key to consistently strengthening your market segmentation lies in constantly learning about your consumers.

That said, gathering data about your target market isn’t a once-off exercise. By making use of tools such as marketing attribution software, you can continuously measure how your advertising and marketing drives consumer interest.

Find out about Blix Traffic's Marketing report and how it can help your market segmentation efforts.

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