Omni-Channel Customer Segmentation Tool

Omni-channel customer segmentation

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Price: $200.00

The omni-channel customer segmentation tool is a method of developing 3 to 8 customer segments which represent the main customer base for an omni-channel retailer.

Product: CST01

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Omni-Channel Customer Segmentation Tool

The omni-channel customer segmentation tool is a method of developing 3 to 8 customer segments which represent the main customer base for an omni-channel retailer. The output of the tool is a number of segments each with a lifestyle portrait of a typical target consumer, in sufficient detail to make decisions about which products they would buy, what types of product should be included in their assortment, at what price points are they most likely to spend, what services they are likely to value and so on.

 

Who Is It Suitable For?

The tool is suitable for retailers of any size in any segment and will especially benefit those who do not already have a customer segmentation, irrespective of whether they have a customer database. Consultants advising retailers will also find the tool of value.

 

More Details of the Tool

The process is focused around a workshop with 20 to 30 members of the company mainly selected from the store operations manager pool and the buying and merchandising department. Marketing management can also add value as can e-commerce and members of the executive committee.

Individuals are given notice of their participation at least a week in advance. They are instructed to come to the workshop with 5 to 10 pictures cut from magazines, papers or any other useful sources, selected to represent people typical of the company’s shoppers.

At the star of the workshop participants are divided into teams of 4 or 5 and each team should have a mixture of responsibilities and roles.

The workshop them proceeds through a series of rounds or stages. More details of each stage are given in the tool documentation. What follows is a summary.

 

Round   Activity
1   In teams, analyze the photos to create logical clusters.
2   Select one image to represent the typical person in a cluster and give that person a name.
3   Each team takes on a cluster and develops a lifestyle portrait of their typical person on flip charts.
4   Each team presents its portrait to the rest of the workshop and colleagues critique it and add points of detail.
5   When all clusters have been reviewed, the workshop estimates the percent of sales each cluster represents. At this stage , this is a judgment call.
6   After the workshop a small group is nominated to tidy up the segmentations and document the detail in a more distributable form.

 

These workshops can be repeated for multiple groups, if appropriate and results merged to get a result based on a wider participation.

Following the workshop and initial distribution of the results, processes can be established to collect harder, more quantified data on each segment so that better estimates can be made of the relative importance of each segment.

This is a serious analysis and a very valuable process. It is also great fun for participants and can be run at headquarters as part of a normal planned program, or it can be run at events like a senior management annual conference or a store operations conference as an after lunch or first thing in the morning event.

Individual participation is 100%.

The toolkit includes a detailed set of instructions for running the workshop, notes and guidance for the facilitator and examples of how to use the results after the workshop.

 

Benefits of Using This Tool

The benefit of using the tool is that the retailer arrives at a set of customer segments produced in such a way that future management decisions can be made much more accurately.

For example, a home improvement retailer did such an exercise with their senior management team and arrived at the result shown here.

omni-channel customer segmentation example

Professional Pete when buying power tools needs tools he can use on sites without mains electricity so he needs enough battery power for a full working day. Ona and Jonas are senior citizens and he doesn’t want to lift heavy tools so a power cord is fine as he will only use it in his apartment. Equally, they live on meagre pensions so they don’t want expensive tools with lots of features. Daiva is a divorced mother with children and lives in the marital home, so she needs expert advice from the store personnel on how to do jobs she now has to do herself. The percentages reflect the estimated share of sales for each segment. Most segments are big enough to pay attention to specific product assortments for the unique needs of each segment, except for Robertas. At 2% to 5% sales he will have to accept the assortment that results from the other segments. It won’t be worth the overhead costs to do something special for his segment.

This analysis can be used to drive many decisions such as:

  • Which products to put in the assortment?
  • What the good/better/best price points should be?
  • What added value services will some or all segments appreciate, e.g. Christmas layaways, purchase finance, knowledgeable store staff, click and collect, etc.?
  • What level of shop fit would be most appropriate?
  • Do our bathrooms require baby changing stations?
  • Should we provide chairs for older shoppers?
  • Should we have a CRM system and how should it operate?
  • Should we have an in-store coffee shop or restaurant?

 

Time to Run a Workshop

To do a good job, workshops typically take 2 to 2.5 hours to run. There is prep time in advance and a small team of 2 to 3 people can spend several days getting the results in a form ready for widespread publication.

 

Price

The price for the toolkit is US $200, or UK £133 or EU €164

 

Pre-Requisites Necessary

There are no pre-requisites necessary before using the tool but participants will need several years of retail experience in their chosen discipline.