This is a user question asked recently and I thought I should write the answer to it online. His question was about E-commerce segmentation and how E-commerce portals segment their customers and how do they target their customers for the emailers they send or the advertisement they do?
The answer is that these E-commerce portals have a very very strong CRM at the back end. The thing about social media and E-commerce is, a single click can be tracked. It can be tracked to the IP it originated from, it can be tracked with regards to the user’s demography and geography as well. As most things online are trackable, the CRM of E-commerce portals is very strong, much stronger then any CRM of physical products.
So, supposing you visited an E-commerce portal (any of the top E-commerce portals out there), and you purchased a Mixer grinder of 2000 rs. Now, the E-commerce portal knows your Email id, your contact information, your IP, your purchase capability and your interest (home appliances). So the next time when the mails start coming from this E-commerce portal, they will include food processors, hand blenders as well as mixer grinders – All kitchen appliances which you can purchase from the E-commerce portals.
The E-commerce portals are using a simple form of segmentation – Behavioral segmentation.
Here is a simple experimentation that you can do to find out the way E-commerce portals segment. Go to Amazon right now, and click on the home appliances or Electronics category. When you browse around for 3-4 minutes, and return back, you will see that all ads on this website have changed to Amazon ads. Not only this website, any website that you go to will start showing Amazon ads within the electronic categories.
This means, that the E-commerce site has read your behavior. It has read the way your IP has browsed various products in the E-commerce portal. Which means, your IP is interested in Home appliances. It then starts targeting you on the basis of that.
The second thing which E-commerce portals do, is involve a bit of demographics as well. So, if you are regularly checking baby products, it will start showing ads even in your e-mail for baby products. If you are buying high end smart phones, it will show high end televisions. If you buy cheap earphones, it will show other cheap mobile phone accessories.
Overall, your behavior is studied online stronly. So the next time someone asks you about E-commerce segmentation and how E-commerce portals segment their customers, then you know the answer.