Segmentation

for E-commerce
7 ways to segment your visitors
Introduction
While segmentation is an established marketing practice – most
marketers will no doubt be segmenting their email lists and
creating demographic driven personas in their marketing
activities – behavioural segmentation for website visitors is an
evolution that has happened in-line with changing technology.
Marketers can now understand much more about visitors to their
e-commerce sites, opening exciting new avenues to better reach
customers at the right point in the customer journey.

One of those evolutions is the ability to segment your web traffic

by behaviour – meaning you don’t have to acquire their details in
order to effectively market to them, but rather, you can automate
this process while visitors are browsing your website. This guide
will help you get a handle on segmentation and how it can be
used effectively in your onsite marketing strategy.

We’ll explain the difference between segmentation and

personalization, provide examples of what kinds of visitor or
customer segments you might market to, and show how
segmentation has been used as a tool to personalize the
customer journey in real-life examples.
Why behavioural
segmentation?
Behavioural segmentation is an easy win for marketers: by
recognising patterns within your web traffic, you can cater to large
groups among your users before drilling down to create a detailed
personalization strategy within those visitor segments. This means
you can cater to these large groups easily with small tweaks to your
onsite marketing strategy. Combining behavioural segmentation
with demographic, geographic and psychographic segmentation is
a powerful way to understand more about your audience, and from
this deliver personalized experiences.

Segmentation vs Personalization:
what’s the difference?
Though both are driven by data, segmentation is about breaking
customers into broadly identifiable groups; personalization is about
individual behaviour. Return visitors who haven’t yet purchased are
a customer segment, and after identifying them, marketers can set
up messaging that will address them appropriately. Personalization
tactics can then reach those at the right point in their individual
customer journey – for example, if they add an item to their basket
and then show intent to exit.

There are of course challenges with both: segmentation is by

definition broad and can be generic; meanwhile, personalization
requires a large amount of data in order for marketers to make the
right play. However, both are highly effective tools that can
increase conversion rates and average order value. Segmentation
can be a stepping stone to delivering personalization, especially
when combined with real-time behavioural segmentation.

7 ways to segment your visitors

When practicing website optimization, leveraging visitor
segmentation helps provide a framework for your customer
journey strategy. Experimenting with the data you gather from
specific visitor segments interacting with your site will help you
to provide a more personalized experience. But with hundreds of
data points available, creating segments worth focusing on can
be a challenge.

Given that we regularly analyze over 30 billion data points to

benchmark customer journeys across e-commerce, we can shed
some light on the visitor segments you might want to consider
focusing on. Depending on your product, market and marketing
strategy, however, there could be dozens of other ways that work
for you to form the foundation of a segmentation and
personalization strategy.
New visitor segmentation
New visitors are an important segment to personalize for, but at
this point in the customer journey, you don’t know too much about
them – so understanding their behaviour is key.

According to Yieldify data, new visitors make up a hefty majority of

website traffic for both retail and travel, at around 55%. They also
drive the most revenue: 40% and 44% for retail and travel sites
respectively, so they need to be carefully nurtured, and led either
to the checkout or to a micro-conversion, like signing up for an
email newsletter.

It’s also likely you’re acquiring new visitors from paid sources such
as PPC, so consider adding traffic source here, as visitors arriving
from different channels might demonstrate different (but more on
that later!).

Generally, for new visitors you want to:

Ensure they know what you’re all about, as soon as possible

Keep them on the site as long as possible (so they can do the
above)
Learn more about them through their on-site behaviour

Get an email address or other useful data before they go (if they’re
really not ready to convert)
A simple welcome offer, such as the one below from Skyn
ICELAND, served at the perfect moment can make the customer
feel cared for and creates a strong reason to either make a
purchase then and there. This could be given to them then and
there, or in exchange for a valuable email address! The important
thing is to test what works best.
For example, A/B testing whether you need to actually offer a
discount is a smart way to understand more about this segment
(and preserve your margins!) In this case Skyn ICELAND found
that highlighting its brand USPs was actually more successful for
driving conversions with new visitors, as it helped educate those
leaving the website about the brand and products.

Source: Skyn ICELAND case study

Returning visitor segmentation
So, maybe you’ve done a great job with your new visitors, and lots
of them are coming back to your website. The returning visitor
segment, as you might have guessed, is made up of people who
haven’t purchased before but who have visited your website
before. They are a truly key segment as they have the highest
average order value across both retail and travel – so keeping
them happy should be a priority.

Source: Meet Your Visitors

One key expectation that consumers today have is that you

remember a little bit about them, 63% of consumers expect you
remember their preferences and data across all channels, and this
rises to 74% when we look at millennials. When it comes to
behavioural segmentation this means treating them differently than
the last time they visited, especially if they shared data with you!
It doesn’t have to be complicated, a simple ‘welcome back’
message, evolved from when they were a new visitor shows
they’re not just another number – creating the same feeling you
get when a shop assistant recognizes you. This is also another
opportunity to secure their email address if you didn’t get it first
time around, as in the below example from online grocer Heartier:

Source: Heartier

While this approach can work well for retailers, especially in

grocery where there is a lack of loyalty you might want to
approach longer, higher-value, purchases, such as travel, slightly
differently – especially considering the high AOV returning visitors
represent.
Thomas Cook Airlines and Condor designed a campaign to
mitigate against booking abandonment by offering the user the
option to save their booking for later and opt-in explicity. This
circumvented the need to send abandonment recovery emails
without explicit opt-in – a strategy that would no longer have
been valid under GDPR.

The new campaign that incorporated opt-in was first trialled on

Condor before being rolled out across Thomas Cook Airlines. It
triggered on exit to offer the user the opportunity to save their
booking by entering their email address and explicitly opting-in to
re-engagement.

Source: Thomas Cook Airlines

This campaign succeeded in engaging customers who were at
high risk of being lost from the booking funnel, putting them on a
journey towards conversion when they would otherwise have
been lost. The GDPR-friendly approach also surfaced key
learnings: whilst send volumes were smaller, the open rates, click-
through rates and conversion rates were significantly higher.

Considering the likelihood of a high order value from returning

visitors, there’s an opportunity to personalize based on basket
value. For example, skincare brand Kiehl’s gave customers with
order values within certain ranges incentives to increase the value
of their basket: visitors showing intent to exit with a basket value
below €60 were shown the exact amount they needed to spend
to qualify for free shipping via Yieldify’s Dynamic Promotions
feature. In addition, those with a cart valued between €75 and
€89 were targeted with a corner notification offering a range of
samples and sachets for orders over €90.

Returning customer segmentation

Returning customers – that is, those who have already made a
purchase with you but aren’t yet loyal customers – are another
segment that needs tailored attention as they are guided towards
becoming a loyal customer. For both retail and travel, returning
customers typically have a higher average order than loyal
customers.

However, according to Bain & Company, “60-80% of customers

who describe themselves as satisfied do not go back to do more
business with the company that initially satisfied them.” This
means that marketers have to work hard to woo these customers
into returning again and again.
To guide this customer segment towards becoming high-value
customers, VIP messaging and perks like gifts with purchase are
another way to engage them and grow the relationship. Skincare
brand 100% Pure uses a tiered loyalty program with clearly
communicated benefits, and according to Shopify, 92-100% of
customers go on to buy five more times following their fourth
purchase.

Source: 100% Pure

Gifts with Purchase can be an effective strategy for a variety of

segments, but ensure the messaging is tailored to your returning
customers. Haircare brand Ouidad works hard to give this group
of customers a reason to come back, creating campagins to re-
engage lapsing users and reward top customers.
 Source: Beauty & the e-commerce beast

This is strategy is further supported by the brand’s loyalty

program, with loyalty members demonstrating an average repeat
purchase rate of 54.4 (vs. 29.8% for non-members).

Loyal customer segmentation

Customers who have returned time and again, purchasing
multiple times and/or who have a high lifetime value are a small
but hugely important segment. Our stats show that they have a
31.3% (retail) or 33.8% (travel) chance of converting, the highest of
any segment: a loyal retail customer has an 8.5x higher chance of
converting than a new visitor.

“Loyal customers have the highest chance of

converting verusus the segments we’ve discussed
so far – 31.3% for retail and 33.8% for travel!”

Meet your visitors: e-commerce segmentation statistics

With this segment, you can really start to focus on personalization,
since you’ll have plenty of data from the customer’s previous
purchases. For example, a fashion shopper’s previous purchase
data could be used to recommend an extra item to increase order
value.

This can be highly-personalized, ‘in the moment’ by

recommending complementary products to go with what they’ve
already got in their cart, as they reach the checkout page – similar
to the way in-store checkouts are merchandised with additional
products. Sports nutrition brand Science in Sport, saw a 155.5%
uplift in conversions from using this tactic:

Source: Science in Sport case study

Another way to personalize for this segment is to offer highly
tailored discounts based on preferences shown in the past, for
example, if they have a preference for a particular brand or
product, showing special promotions for those brands.

These are also the kinds of customers who may act as promoters
on your behalf, so another way of extracting value from them is to
suggest social sharing or to offer referral codes. For example,
clothing retailer UNTUCKit offers a clear referral incentive for
those who join their VIP program:

Source: Yotpo Loyalty Program Examples

Finally, you might also want to ask those happy customers for a
review! We’ve found that this works best when it is well timed
after a recent purchase. For example, using Yieldify’s historical
targeting feature we were able to encourage returning customers
who had made a purchase between a particular time frame to
review their recent purchases for one of our beauty clients:
 Source: #AskYieldify: reviews

Time-based segmentation
Leading on from the above, time is of the essence! Time of day,
day of the week and seasonal traffic are key segments that can
be overlooked. Depending on the product and the target market,
different times can be more or less profitable.

For example, soak.com, an online bathroom retailer, found that

social proof personalization tactics weren’t working as effectively
as expected on their visitors. An analysis of the customer journey
revealed that it did work well with those visitors browsing at
lunchtime – i.e. people with more time to read, think and consider
this big purchase.

After zeroing in on this time of day with the campaign, they saw
an 11.2% conversion rate uplift among those targeted.
Location and Language segmentation
Depending on your product, breaking users down by their
geographical location could be a highly effective tool to cater to
customers’ needs. With this information, you can create highly
targeted offers.

Geo-targeting can also be used to serve specific messaging

based on topical information like weather or local events. See for
example the comparison between this topical vs generic display
advertising:
With this kind of targeting, you can highlight specific products (like
fans during a heatwave or gifts and decorations for holidays
celebrated in particular countries and regions).

Although global e-commerce brands will likely run different sites

in the language of the region they operate in, SMEs, or new
entrants to markets who may not have the capacity for multiple
sites can still target these market segments by offering targeted
messages to those with different language browser settings.

Another use case for language based segments is when a

significant number of visitors who are accessing a site in a
particular country but who speak in a different language from the
dominant one in that country. Lancome found that many of their
customers browsing the Canadian site were Chinese speakers,
who are a huge driving force in global luxury e-commerce. This
segment was then targeted with a lead gen message in their
browser language:
 Source: Lancome Canada

Traffic source segmentation

Part of creating a seamless customer journey is in guiding

browsers from the first point of contact (like an email, Instagram
post or Facebook advert) to your site and into the sales funnel.
Traffic driven from specific sources might be attracted for
particular reasons, so ensure that you’re serving them the content
or offer they’ve clicked on.

Remind this visitor segment of the initial reason they clicked.

Subsciption service SimplyCook’s targeted Facebook-driven
traffic; by prompting them to sign up with a £1 trial offer, they were
able to drive 7k leads that otherwise would have been lost.
 Source: Simply Cook

Building on the success of this campaign, the brand is now

working with Yieldify to deliver personalised offers to other visitor
segments arriving on site from different traffic sources targeting,
for example, those arriving from vegetarian or gluten-free content
on Facebook.

Device segmentation
The proportion of purchases made via mobile is expected to
reach 53.9% by 2021, and research shows that up to 65% of all
online purchases involve multi-device journeys, so segmenting by
device should be a no-brainer. But knowing what works best on
desktop, versus mobile and tablet can be a big challenge.
The path to conversion on mobile looks different from the
desktop journey: it could mean a customer searching for store
locations, making a call directly, using the mobile site while
visiting in person (tying in with location segmentation),
downloading an app, or engaging in browsing that starts on
mobile but transfers to a desktop for the purchase. These kinds of
journey should be reflected in your customer journey map, and
based on data from your users.

To target abandoning mobile visitors, menswear retailer M.J.Bale

highlighted its click-and-collect service, and in-store returns,
perfect for mobile users on the go.

Source: M.J. Bale case study

Conclusion
Identifying and catering to your visitor segments is one of the first
steps to a strong personalization strategy, and these 7 examples
are just a simple starting point! By catering to the circumstances
and expectations of your traffic, you can begin to optimize ROI
with messaging that reflects the stage of customer journey the
visitor is at, whether they’re a brand new visitor or a loyal
customer.

Your segments will constantly evolve as you gather more data on

your visitors, and may interact with each other: for example,
location may interact with device use, and language form an
important part of your returning customer strategy. Ultimately, the
greater the granularity available in the data, the more you’ll be
able to personalize for these segments as they emerge.
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