I’d like to explore the various components of Local Marketing by beginning with Segmentation. If leveraged correctly, Segmentation can open a windfall of Local Marketing opportunities for retailers.
Before I go any further though, I’d like to define Segmentation as the set of attributes that separates one consumer (or group of consumers) from another. This whole subject can become very confusing if we don’t separate the two major forms of Segmentation that are applicable in the retail world:
- Location (or Store) Segmentation refers to the collection of information about the population of consumers that might visit a particular retail location and leveraging this data to drive sales at that store.
- Consumer Segmentation refers to the collection of information about a specific individual and using that data to target messages to that person.
In this post, I’d like to focus on Location Segmentation, which is an emerging trend within the retail industry. In practice, many QSRs, fast casual restaurants and retailers still address their customers at the store level as a single, unified group of consumers with identical tastes and interests. However, they do so knowing that the consumers who visit each location are different from one site to another. They have plenty of data that supports this fact, so the question I am always asking myself is, why?
I believe these marketers perceive obstacles to executing Local Marketing programs, such as:
- How do you segment your customers?
- How do you collect data about these customers?
- How do you categorize, store and manage data on a location basis (profiling)?
- How do you leverage this data to deliver relevant messaging?
- How do you execute a Local Marketing campaign store by store?
Together these questions seem overwhelming and lead these marketers to oversimplify their marketing approach. This generally translates into a “one-size-fits-all” approach or store categorization approach (i.e. soccer-mom store, young geek store, etc.), both of which are very limiting. The key point is that Location Segmentation does not have to be one-dimensional; multiple and independent customer attributes can be collected and leveraged differently for each location.
Once marketers embrace the idea that an endless range of consumer attributes can be associated with a location, including age groups, ethnicity, product preferences, general interests, lifestyle, price points and any combination of these attributes, they can be leveraged for marketing on a store-by-store basis. As a result, some very interesting marketing possibilities will emerge.
All of the technology and processes needed to deliver store-specific messaging exist and are proven. They include:
- Online store profiling database tools (we call Intelligent Profiling),
- Dynamic page composition tools that can build store-specific POP
- Digital printing technology that makes it cost effective to print one sign
- Fulfillment processes that efficiently and quickly assemble store-specific kits of POP elements.
The only thing missing is the commitment to shift to a new way of thinking about marketing to customers. If marketers can make the leap of faith that the obstacles aren’t as big as they appear, the rest is very straightforward.
In my next blog, I will discuss how store profiling data can be used in practical Local Marketing efforts.
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