Setting Up Shop: How Segmentation Speaks to the Functional and Emotional Needs, and Buying Tendencies of Varied Shoppers

Contributed by Vince Guzzi of Watt International. 

While the crusade to win the hearts, wallets and loyalty of customers is sometimes waged based on price, store location, or superior product offerings, often, winning the battle comes down to more emotional factors – a matter of demonstrated care and consideration for a customer’s unique shopping needs. Simply put: a truly exceptional customer experience that both surprises and delights.

And although an increasing number of consumers are already empowered with information they have gathered from online sources before setting foot inside a retail location, their expectation is to be greeted with a stellar in-store experience. Shoppers now crave the same ease and timely service in a physical store location that they would experience while shopping online. Plus, they also want to feel as if the brand that they choose to reward with their business with speaks directly to them – making them feel special and understood.

So how do we get there? Leveraging segmentation to create a welcoming physical store environment that speaks to multiple customer segments may be the most critical tool in a retailer’s arsenal. And here’s why: knowing merely who a customer is, or what they often shop for, is no longer enough to gain their trust and loyalty, let alone ensure they’ve walked away from a store feeling elated. 

Let’s get personal: favoring mass personalization over mass marketing

Thanks to new technology, it’s much easier to collect meaningful data that moves retailers away from looking in the rear view mirror on what customers transacted, and towards a more powerful understanding of the influencers along the path-to-purchase that answers why they bought. Retailers have the ability to really do know who their customers are now. Today’s customers are smart and savvy shoppers who are more aware than ever of their unique demands and needs – and more aware than ever that those needs can be fulfilled by the retailers they choose to purchase from. In fact, 73% of consumers prefer to do business with brands that use personal information to make their shopping experiences more relevant to them (Digital Trends). We’re now in an age where standardization has proved to be more of a handicap than it is advantageous, and as such, retailers are experiencing a great shift towards mass personalization and away from mass marketing.

So how can they achieve that in store? Retailers now need to look at shoppers through multiple lenses: their needs, attitudes, behaviors, requirements by day, by trip type, by influences, and even by category shopped, which all play into how a customer will react inside a store. These pieces of the puzzle add up to a multidimensional form of segmentation.

When a customer sets foot inside a retail store, every little detail must play a part in their experience. From the signage, to the lighting, to the product placement to technology integration, each retail environment has to be carefully choreographed with the right balance and presentation of elements designed to deliver a sensory experience that entices customers to shop. Furthermore, one must be cognizant of the trade-offs that different segments are willing to make. This is important when assessing the ROI of different initiatives. The devil really is in the details here.

Tailoring design to the needs and habits of multiple shoppers

The goal of segmentation is to move away from stereotyping and more towards understanding the core of a person (what they like, what they do at a given point in time). Responsive design then creates the right variety of offerings and experience touchpoints in store that allow individual shoppers to connect and experience it in their own personalized and meaningful way.

Take the Haagen-Dazs global shop concept, which was first brought to life at Hackescher Market in Berlin, Germany. To create a truly great in store experience Watt leveraged the principles of segmentation and personalization to create a new concept that delivers a boutique-like environment and puts the Haagen-Dazs brand on display in an entirely new way. A concierge desk to welcome shoppers, varied seating options to address different usage occasions, understanding the right balance of brand elements, and bringing forth certain aspects of the operations into the customer-facing experience, are a few enhancements that were informed by understanding the target customer more intimately.

Another example of segmentation in action is our recently redesigned Market32 stores, which boast a chef’s kitchen table,  a patisserie, a growler bar, and enhanced experiences in meat and seafood. And although they are all very different areas serving very different purposes, each contributes to deliver a holistic and meaningful brand proposition that better connects with varying needs of their existing shoppers. But more importantly, they are getting the attention of a new type of shopper that previously did not cross the store’s threshold.

Going beyond satisfaction to achieve customer delight

Ultimately, if retailers can convince customers that they are able to deliver against their specific needs across different usage occasions, they unleash the opportunity to capture a greater share of mind, greater share of heart, greater share of wallet and a customer that is more likely to return again and again. And providing customers with proof that you are paying attention to their needs through a responsive store design not only helps to maximize investment dollars, but also helps to discover exactly where those dollars should be spent to enhance in-store sales.

We know that not every customer is created equally. But proper segmentation will help retailers create a compelling store experience and distinct propositions that speak to the functional and emotional needs, and buying tendencies of their varied shoppers. That’s how retailers will get customers to move beyond simple satisfaction and towards a new measure of loyalty – customer delight!

Written by Vince Guzzi, Managing Partner, Watt International. Vince is the Managing Partner of Watt International, a globally recognized integrated retail agency delivering strategic and creative services that help retailers position themselves for growth and success. As a seasoned and multi-disciplined strategist who applies a holistic view to assessing brand and business challenges, Vince has a proven track record in delivering solutions that get in-market results and build lasting brand equities for clients. Having spent a number of years working in market research, consumer insight, strategic planning, and business consulting, Vince brings a solid background encompassing both agency and client side experience. He has worked with leading national and global brands in the consumer packaged goods and service industries, and with leading retailers on a global scale.

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