Segmentation Criteria

The following segmentation criteria are supported by default:

Customer Demographics

This descriptive segmentation technique leverages customer loyalty programs and demographic information (such as residence, profession, age, gender, ethnicity, marital status, and education) about customers to generate demographics based on customer segments.

RFM and Customer Behavior

Segmentation based on purchase behavior aims at discovering groups of customers who exhibit similar purchasing behavior. However, the definition of behavior in this context includes many factors. For example, retailers may want to distinguish between light and heavy users, regular stock-up shoppers versus emergency top-up shoppers, lunchtime shoppers versus evening shoppers, home and daytime shoppers versus work and weekend shoppers, or fast-checkout customers versus regular checkout customers. The two important behavioral dimensions for understanding customer motivations are visit behavior (identified by the time of day and the day of week that the visits take place) and shopping behavior (identified by the customer's spend dispersion across categories purchased during the trip).

Category Purchase Behavior

Another type of behavior segmentation aims at segmenting the customers who seek similar benefits when evaluating and choosing or purchasing products. These benefits can be measures such as economical price, bulk products, durability, or free shipping. Here, the segment process considers factors that capture customer sensitivity to price and promotions for each category. This can help retailers to segment customers by distinguishing predicted customer responses to the targeted or general promotion of products.