Business Tip 23
Reinventing the Segment Wheel

Shopper marketing, shopper insights, shopper trends and now shopper segmentation have been the buzzwords within category management. Turbulent economic times and the subsequent tightening
of the proverbial shopping wallet pushed manufacturers and retailers to focus their efforts at the most granular level: the shopper. Segmenting shoppers has always been a standard way to analyze and build promotional campaigns for specific subsets of the population. Instead of demographics though, analysts are now focused on psychographic attributes such as need states and attitudinal segments to build more customer-specific campaigns

Out with the Old and in with the New?

Not so fast. Demographics have been the bread and butter for marketing and promotional campaigns for years. Unlike attitudinal segments, demographics are fixed attributes based on population characteristics. Given the static nature of a shopper’s demographic makeup, category managers
are now seeking more dynamic segments to categorize shopper behaviors. To do this, shopper
insight studies are drawing on responses to value attribute statements which correlate to pre-defined segments developed by manufacturers and retailers.

Regardless of the relative inflexibility of demographics such as gender, age, income and ethnicity,
they still merit value in understanding shopper insights. Instead of simply throwing them out entirely, consider leveraging them against new shopper segmentations to maximize the capabilities of
pin-pointing shoppers and their individual needs.

Build Layered Segments for Deeper Analytics

Segmentations from shopper insights data are very rigid and hard to compare across different tried
and true demographics such as age, income and gender. As a manufacturer, securing data such as shopper segmentations are large investments, but what’s the point if you cannot fully delve into the research completely?

Creating custom segmentations that are both flexible and intuitive are difficult to develop without software programs that are designed to extract these insights. Imagine the value of taking a
need-state segment of shoppers that frequent the category and identify which demographics compile that group quickly and easily to provide retailers with an overall picture of who the
shoppers are.

Going Beyond Segmentation to Provide Value

Segmenting shoppers and developing shopper marketing based on specific categories of shoppers
is an excellent way to drive growth at the shelf. However, the real value of identifying who the shoppers are, why they shop for particular brands and what keeps them coming back for more includes a
unique collaboration between manufacturers and retailers. More often than not, finding common
ground on shopper segmentations include long conversations and compromises between retailers
and manufacturers. Through this process, manufacturers effectively demonstrate their ability to build partnerships which create profitable wins for both them and their retailers. Exhibiting a strong knowledge of shopper insights based on definitive and actionable shopper segmentations that are flexible, dynamic and reliable ensures retailers that their manufacturers have their shoppers in mind.