Segmenting the Digital Shopper | Thoughts and Observations

Is there a fundamental difference between shoppers online and offline? Marketers have constantly been grappling with this question. It is no so much the matter of need or infrastructure but more on the lines of ability and willingness. Using segmentation to understand them will help us answer this perennial question.

Let us try to take a look at consumers and their behavior on online channels. This only includes those consumers who have made use of some digital channel at some point in their purchase journey. Whether it is Research-Online-Purchase-Offline or otherwise. A while ago, a leading media agency (associated with a big network) came up with six distinct segments for these consumers. 

The segments include:

• Basic Digital Consumers
• Retail Scouts
• Brand Scouts
• Digitally Driven Consumers
• Calculated Shoppers and
• External Shoppers

The details pertaining to each of these segments are as follows:

Basic Digital Consumers: these are not savvy digital users. While they may have a basic level of comfort with online research and shopping, the are not as prominent on mobile or social channels. However, in terms of overall likelihood of buying offline, they are the second highest segment.

Retail Scouts: These consumers exhibit a market preference for a particular retailer over brands. This is not to say that they are brand averse, rather that they look at their preferred retail outlet to inform their shopping. They have a decent presence on mobile and are likely to use it more at home than elsewhere. They are comfortable buying online but don't show a marked preference for that or offline.

Brand Scouts: These consumers are very similar to the Retail Scouts except for the fact that they have a favorite brand as opposed to a retail outlet. The majority of them begin their shopping research with a particular brand in mind. They may however be motivated to buy other brands.

Digitally Driven Segment: These consumers use every digital channel to inform and conduct their online shopping. They use social and mobile more than any other segment, value convenience above all else and they do everything in their power to avoid physically going to a store. While they have a healthy user base at present, they are only likely to grow in numbers and importance as a segment.

Calculated Shoppers: These are the "wait and watch" consumers. They know that they want to make a purchase but are trying to narrow down the consideration set to pick one clear brand. There is no urgency in their shopping pattern. They prefer to take their time to get the best deal.

External Shoppers: These are the window shoppers of the online world. These are non-mobile shoppers. They typically make use of fixed web channels to conduct their research and try to find compelling reasons to buy and to buy a specific brand at the same time. They too take their time to make a purchase.

So, various clearly-defined segments do exist in the online shopping sphere after all! The important thing to understand is that the purchase journey or paths taken to purchase differ for all these consumers. While price may be a core concern, it is the nature and length of the journey undertaken that becomes the dominant factor. Price and promotions are relegated to secondary positions.

The other thing to remember is that like all journeys, these paths to purchase will also change over time. The increasing shift to mobile devices will fundamentally change the way consumers look at and experience online shopping. Demographics alone will be of little aid in helping us track these journeys. Marketers therefore need to keep a keen eye on intent - the triggers that influence each of these segments - in order to devise a strategy to cater to these segments. That and continuous refinement over time to co-relate to changing behaviors.