Customer Segmentation

Tactical Customer Segmentation

Simple & Actionable

A tactical segmentation is a segmentation that integrates only 1 shopping behavior (basket value, number of items, shopping frequency,…) that comes to supplement the category and channel scope. It is often used for tactical purposes.

we have identified that butchery leads to one of the highest margins in the store. To boost sales, I want to engage the top spenders in Butchery. To identify these top spenders, I will use a basket value-based cohort analysis and isolate my top spenders.

we realized that our diaper sales were growing slower than our baby shampoos. A simple cross-merchandising analysis demonstrated that only 15% of our shoppers who bought Baby shampoo were buying diapers. To generate more Baby Diapers engagement, we used a never-buy segmentation analysis to isolate Shoppers and rank them by basket value, who bought baby Shampoo and never bought Baby Diaper

Example of tactical cohort analysis on basket value

Tactical segmentation is often used to address a specific challenge or opportunity at a specific time.

Strategic Customer Segmentation

Deeper insights, long-term strategy

A strategic customer segmentation, on the other hand, is used to plan long term Customer Engagement Strategies – some of them being ideally automated to save time. A strategic customer segmentation will traditionally integrate several shopper behaviors dimensions and used Machine Learning to group them homogeneous groups. That grouping is done with a K-mean algorithm at its core. At Hypertrade, we also integrate the Top 10 Categories’ penetration as a component of our strategic segmentation to ensure that products and assortment’s suggestions match the customer segment’s preferences.

Each segmentation exercise generates a set of segments, and each is then analyzed to measure their weight in various performance KPI.

The validated segments’ performances can be monitored throughout time to assess the evolution of their performance and importance.

example of a strategic segmentation analysis

Benefits of Segmentation

  • Identify customer segments relevant to your strategy
  • Optimize product assortment based on segment needs
  • Personalize product recommendations for increased sales
  • Personalize marketing messages for higher engagement

Find out how Ulys can help your retail business

Simplify · Automated · Optimize
Your Retail Solutions Partner

© 2024 Hypertrade