How To Use Demographic Segmentation In Ecommerce

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It’s the dream of any ecommerce merchant to have their products or services seen by as many people as possible. However, once a merchant has captured the attention of their audiences, they face their next big challenge—catering their marketing as efficiently as possible. The first step towards effective marketing is demographic segmentation.

Lifecycle-based segmentation helps merchants when they’re keeping an eye on their customers. However, sometimes a ‘wide net’ approach helps to kick off marketing attempts. Enter demographic market segmentation—the general grouping method that paves the way for specialized grouping.

But what are demographics in marketing? What can email segmentation do to improve conversions and revenue? Let’s explore demographic marketing segmentation and look at some demographics examples in marketing.

To learn more about effectively using omnichannel marketing, take a look at our complete guide to omnichannel marketing automation.

What is Demographic Segmentation?

A type of customer segmentation, demographic segmentation sets itself apart from its alternatives. These alternative types of customer segmentation are geographic, psychographic, and behavioral segmentation.

On the other hand, demographic segmentation is defined by the demographic groups customers fall into. It categorizes a merchant’s target market depending on different variables. These help to address them with marketing that is more likely to be relevant to them.

There’s one main difference between demographic segmentation and others like psychographic and behavioral. This is that it’s a more general method of targeting customers. Psychographic and behavioral examines an audience more on a customer-by-customer basis. Whether it’s specifically examining what a customer wants or examining customer journeys. 

As opposed to this, demographic segmentation takes a look at the audience as a whole and proceeds to separate them into smaller groups. It segments customers much like geographic segmentation. This prioritizes more general features of a group of customers, over the unique features of the customers themselves.  

In short, demographic & geographic segmentation takes the ‘thick brush’ approach to grouping customers. This is opposed to the precise ‘pencil lines’ that psychographic and behavioral segmentations take.

Understanding how to use segmentation is vital for successful marketing. Luckily, Omnisend makes segmentation simple. 

Types of Demographic Segmentation

This raises the question of what makes demographic segmentation different from geographic segmentation. The answer is the different demographic segmentation variables—the likes of which defines demographic groups.

Geographic segmentation focuses on location—where the customer is in their country, or in the world. This extends to other location-based variables, such as the time zone that they’re in and even the cultural aspects unique to a region. 

However, demographic segmentation can apply to customers regardless of where they live. It’s the circumstances in which they live that defines demographic segmentation. These are demographic variables, which include:

Age

This variable divides customers into groups depending on their age. These groups can be specific to certain ages, yet most of the time it bunches age groups together. 

For more precise marketing efforts, demographic segmentation can narrow down these age groups. They can either be broken down to generations, such as Generation X, Y, and Z, or they can go to more precise groups by smaller slices of age.

Gender

This variable divides customers according to which gender they identify as. Segmenting via gender can vary considerably depending on the industry and what you sell. However, how a person responds to marketing can vary based on gender, which makes it a segment worth considering.  

Demographic segmentation is usually the first step in segmentation. So, segmenting via gender can become an important variable when attempting to target audiences further. For example, different genders can resonate well with psychographic segmentation.

Religion

This variable divides customers according to their religious beliefs. Religious beliefs can influence the preferences of certain customer audiences. This can affect what products a customer buys, as well as how target audiences respond to marketing campaigns. 

This variable isn’t common with demographic segmentation, but it is an option. Depending on the merchant, store, or even industry, this segmentation can be important. To accommodate, a merchant may have to adjust their marketing for a variety of reasons, such as based on the time of year, or certain observable special occasions.

Education

This variable divides customers according to their education level. Some merchants may consider audiences with higher levels of education as more informed and so will adjust marketing to match.

Income

This variable divides customers according to their income. This segmentation may dictate whether certain products are marketed to audiences in the first place. Product pricing may set some products out of reach for customers, depending on their income. Merchants can decide whether or not to engage with customers due to their income. 

However, customers being segmented for income may not strictly require to be high-income customers. If combined with psychographic segmentation, specific incomes can make marketing incredibly effective.

Occupation

This variable divides customers according to their occupation and job. This includes their industry and what level of their career they’re at. Merchants can cater exclusively to specific industries. Customers with high-paying positions may respond to marketing that makes income segmentation efficient. 

This type of segmentation often works organically with geographic segmentation. This is because certain industries or roles can be more common in specific areas.

Family

This variable divides customers according to their family structure. It can break down to a variety of different aspects. For example, it can be as simple as how many kids, if any, a household has. Further to this point, a household with a lot of kids might resonate well with cost-effective products. This would be considering the household’s shared income. 

Family structure can dictate many different types of marketing. It can also take into account the household’s marital status, their employment status, and even their location. For example, It can coalesce with geographic segmentation. This may determine that a family in the city centre would enjoy a rural vacation. 

Tips on How to Use Demographic Segmentation Examples

For a clearer understanding of demographic segmentation, let’s explore some demographic segmentation examples. With each one, we’ll explore how you can utilize them for your own ecommerce marketing.

Age Example

The world famous Lego brand is the perfect example for segmenting by age. Naturally, many customers will have nostalgia for playing with Lego. This means it’s a beloved and well-recognized brand, as well as a product that can be enjoyed by all age groups. 

Lego can segment their customer base by age to target different customers with different products. For example, adults receive marketing for specific brands or sets that relate to their interests. Brands or interests such as Star Wars or football stadium sets.  

Kids, on the other hand, can receive new products or standard sets. These would include new Disney film-themed sets or general ‘rocket, tree house, concert’ style sets.

How to Appeal to This Demographic Group

The first step is understanding the age segmenting-based groups that audiences fall into. Once they do, merchants can begin segmenting them accordingly. As the Lego example showcases, products with a universal appeal can be marketed in different ways to different audiences.

As a merchant, you should ask yourself the following:

• Do my products have appeal to all age groups?
  
  
• If yes, what is it about the products that appeals to each group?
  
  
• If no, how do you focus the products on the age groups that do respond well to them?

Understanding what resonates with each age group can make marketing to them more effective. Researching what age groups resonate with your brand can make marketing much more efficient.  

For example, discovering that you have a low engagement rate with young adults but high engagement with elderly. This can steer your marketing towards a more ‘mature, refined’ style.

Gender Example

Despite the name, BOY is a unisex clothing brand gaining traction with young adults. A clothing company offers the perfect example for segmenting with gender. There is a clear divide in products, those marketed at male audiences and those marketed at female audiences.

However, with unisex options, there’s the possibility to market products towards any gender. 

These products can be near-universal. For example, bags and beanies don’t need to be restricted to gender. And so, these products can be marketed towards all audiences, regardless of gender. They can be marketed alongside the products that work specifically for one gender in particular.

How to Appeal to This Demographic Group

When segmenting a customer base, a merchant should question how important gender is to their marketing. Clothing companies like BOY will have a clear need to do so. However, the same cannot be said for all industries or stores.

Some products won’t require segmented marketing for gender, so you should ask the following:

• Do your products have a clear benefit or purpose for a specific gender?
  
  
• If yes, what is the right tone for each segmented gender?
  
  
• If not, why consider segmenting by gender at all? Is it necessary for your brand?
  
  
• How does the product benefit or appeal to the gender. Is it the primary feature of the product?
  
  
• If yes, is that the message of the marketing?
  
  
• If no, is that simply the branding of the marketing?

For any products that are more universal and don’t strictly appeal to one gender, you can cross-sell. Some products make ideal product recommendations, like accessories to primary products. For example, literal accessories in the clothing industry.

Religion Example

Due to many countries being ‘dry’ in the Middle East, there’s little to benefit from marketing attempts for alcoholic beverages. The same is true for those who abide by Islamic law throughout the world, seeking a strict halal diet. Some companies, such as Pierre Zero, have endeavoured to offer an alternative. Theirs is an alternative to traditionally alcoholic products.

This example showcases that a new product can be created to fill a gap in the market. In this case, the gap might not even be one that people are aware of—even those that the product is for. 

With this in mind, segmenting for groups listed as a specific religion can create the ideal target audience.

How to Appeal to This Demographic Group

The Pierre Zero example is a clear case of needing to market towards specific markets. This includes religion, yet it can also apply to those in other groups. For example, using psychographic segmentation. This would be for any customers that make it public knowledge that they don’t want drinks with alcoholic content.

When addressing this segmentation, merchant should consider:

• What makes the product specifically made for these customers?
  
  
• Is this factor something that can appeal to other groups?
  
  
• If yes, consider widening the net a little. Consider further market research to display more benefits listed. Other than solely addressing these segmented customers.
  
  
• If no, what messaging can you use for your ideal customers? Focus your marketing strictly on how it benefits your customers, and your customers alone.

Education Example

In the world of health & beauty, wellbeing is everything. YesWellness offers products that focus on how their customers can get better nutrition and wellness out of their lives. 

YesWellness might segment based on education in order to promote something like multivitamins to those with higher industry knowledge, as they might be in busy occupations without the luxury of a lunch break. Whereas their customers with lower levels of education might work in higher stress environments, and be more interested in aromatherapy to relax. 

How to Appeal to This Demographic Group

The type of product that a merchant is selling doesn’t need to be restricted to the example’s industry. Any product that requires explanation or demonstration to be used efficiently, or to be used in general, must be marketed wisely. This can include segmenting to those who may need simple instructions or have more industry-based knowledge.

When considering segmenting for education level, merchants should think about:

• Does the product require special knowledge to use, beyond simple instructions?
  
  
• If yes, is the amount of training required worth marketing to those who might not understand it? What additional marketing needs to be conducted?
  
  
• If no, what is it about the product that merits considering marketing for those with specialist knowledge?

Income Example

It goes without saying that luxury brands normally benefit most from targeting those with higher incomes. Some merchants, however, can only afford to target these customers. With high price tags come high costs, which makes efficient marketing all the more important.

That doesn’t exclude those selling luxury items from segmenting customers with lower incomes, though. Take our example of To’ak Chocolate. They offer products that look to rival the same high-class culinary experiences as fine wines and aged spirits. They can segment their customer base by their incomes. With this, they can utilize effective marketing that offers products each group can afford.

For the higher income group, there are high-end, luxurious products and packages. For the lower-income group, there are more gift-focused offerings. These are less everyday purchases and more for special occasions.

How to Appeal to This Demographic Group

Regardless of what industry a merchant is in, there is the opportunity for a luxury option. However, with this new territory comes the challenge of proving what makes a product luxurious. It’s this message that’s usually the highlight of marketing efforts. 

The same is true of the flip side though when marketing towards lower incomes. Your price point will always need to be merited, and you’ll need to prove why it is. When considering segmenting for income, think about the following:

• What about your product or brand merits special targeting of a customer’s income?
  
  
• Who are you marketing your product towards, is it higher or lower income customers?
  
  
• If higher, can you easily display what makes your product or brand worth the higher cost? Does it require extension marketing to educate potential customers about the benefits?
  
  
• If lower, can you easily display what makes your product a good deal for the cost? Does it save them money? If so, how, and is this clear throughout your marketing?

Occupation Example

Merchants selling to other merchants doesn’t strictly have to be B2B. Selling to customers for their own creative or professional endeavours requires specific marketing. After all, it’d be hard to convince a fisherman to buy a subpar rod when he knows what makes one solid and reliable.

This is where companies like The Featherweight Shop come in. They understand what their customers want, need, and expect from their products and services. By offering both materials and services for repairing equipment, they’re already in a good position for customer trust.

How to Appeal to This Demographic Group

It’s the confidence and industry knowledge that makes The Featherweight Shop trustworthy to those in the know. With this in mind, they can comfortably segment customers who register in the same industry. This is because it’s more likely that they’ll recognize and appreciate what the marketing involves. Or, in other words, game recognizes game.

Merchants aiming to establish trust with industry-customers should consider this segmentation. When they do, they should remember the following:

• Are your products tried-and-tested well enough for those in the industry?
  
  
• If yes, how do you showcase the quality of your products or services in a way that appeals directly to them?
  
  
• If no, what can you do to garner trust? This is when you should consider offers and request feedback.

Family Example

The segmentation group of family status can include a wide range of customers. It can include anything from single and living alone to housing a dozen family members under one roof. However, for the sake of simplicity, let’s examine the company Wilson & Frenchy.

Specialized in baby clothes, from newborn to toddler, Wilson & Frenchy knows their audience. Their range of products is varied enough to cover all clothing needs for babies and toddlers. Alongside this, they also offer speciality products, such as an organic range, as well as accessories. 

When considering family, the marketing for this company will likely target those with babies or small children. This is clear when looking at their age ranges—they know that their target audience is new parents.

How to Appeal to This Demographic Group

However, it’s also possible to connect some other dots though. For example, a household registered as a married couple might be considering having a baby. This is where family segmentation can start to branch out beyond the tunnel-vision of their primary audience.

When looking to segment customers according to family status, merchants should consider:

• How does your product or service uniquely appeal to the household size?
  
  
• Can the household size synergize with other segments? For example, might a ‘low income’ approach of saving money be more effective for large households?
  
  
• If you’re focused on one household size, does your marketing exclude any other household sizes?
  
  
• If yes, is this intentional in the marketing? Is it worth potentially alienating other customers?
  
  
• If not, how do you relate the marketing to the household size? Would it be worth marketing with a more general approach?

Wrap Up

Clearly, there’s a lot of thought that needs to go into demographic segmentation. Even if it is only the first step in separating and grouping up customers, it’s worth doing right. Otherwise you risk basing your marketing on shaky foundations.

Automated marketing can be incredibly effective for increasing engagement and revenue. Our studies have shown that they can increase conversions by approximately 52%. However, to make use of these tools, you need to make sure that who you’re marketing to is the right audience.

Using Omnisend, segmentation is made simple. Try us out for free with a trial today!