{"id":4089,"date":"2026-03-29T21:16:55","date_gmt":"2026-03-30T01:16:55","guid":{"rendered":"http:\/\/wordpress-473092-1485251.cloudwaysapps.com\/?p=4089"},"modified":"2026-03-29T21:16:55","modified_gmt":"2026-03-30T01:16:55","slug":"customer-profiling-and-segmentation-in-ecommerce","status":"publish","type":"post","link":"https:\/\/www.data-mania.com\/blog\/customer-profiling-and-segmentation-in-ecommerce\/","title":{"rendered":"Customer Profiling and Segmentation in Ecommerce"},"content":{"rendered":"\t\t
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Today’s post provides an overview, example, and conceptual demonstration of customer profiling and segmentation.<\/p>

\u201cHalf the money I spend on advertising is wasted; the trouble is I don’t know which half\u201d \u2013\u00a0 John Wanamaker<\/p><\/blockquote>

I believe that to be one of the most powerful quotes that describe the dilemma of marketers in the most appropriate way.<\/p>

\"\"<\/p>

Companies have always faced this challenge of reaching out to right customers, through right channels, at the right time and offer the right product.<\/p>

In traditional brick and mortar stores, companies have always followed the strategy of bulk marketing \u2013 where they market and advertise their product to the entire universe. Imagine a company advertising diapers to 12 year kids or a company advertising baby products to 15 year kids. I believe the money spent on such advertisements constitutes the wasted half (of advertising money).<\/p>

Moreover, in today\u2019s world where marketing budgets are getting more and more tighter, and customers are flooded with a plethora of options at their fingertips, it becomes imperative to use the marketing budget judiciously and get the maximum possible return.<\/p>

In typical brick and mortar stores, it may still not be that easy to be very specific about target customer segment but in the case of online companies or e-commerce, it is easier to reach out to the right customer, at the right time, through the right channel, with the right product offering.<\/p>

In recent years, the commoditization of hardware and advancement in software space has made it economical and viable for companies to store customer data \u2013 be it their demographic details, browsing behavior, buying history or any other aspect.<\/h4>

There has also been an exponential increase in the e-commerce market across the globe.<\/p>

According to Statista, the worldwide retail e-commerce sales in 2016 was USD 1.86 trillion and is expected to reach USD 4.5 trillion by 2021. In 2016, an estimated 19 percent of all retail sales in China occurred via internet; while, the same percentage in Japan was 6.7 percent. In India, total retail e-commerce sales in 2017 was USD 20 billion and is expected to reach USD 52 billion by 2021.<\/p>

One of the reasons for such fast growth in e-commerce is due to the movement of customers from physical stores to online stores, and this has led to customers sharing personal information to companies. Companies are then using sophisticated analytical models and advanced technology to get the maximum insights so as to improve their customer acquisition and customer retention.<\/p>

Data points needed for customer profiling and segmentation<\/h3>

\"CustomerCompanies are capturing customer data at multiple levels and through multiple ways. Some of the key data points captured by companies that can be used for customer profiling and segmentation are:<\/p>