In a typical marketing department, demographic information is relied on as a key tool for developing targeted outreach strategies. A retailer’s marketing team, for example, can use these breakdowns in gender, age and geography, among other areas, to determine outreach and offer strategy. This approach relies on the basic premise that people who share these particular attributes tend to have shared interests, needs and buying habits that can help retailers better understand what products to offer and how to offer them.
Understanding the target demographic for a specific product or service and knowing how to reach these demographics is imperative for a successful marketing strategy. Without this information, retailers would essentially be firing offers blindly into the masses, many of which wouldn't be relevant to their recipients. There are shortcomings to demographic segmentation, however, which lumps together many very different people who may only have one characteristic in common.
Is it likely that women age 18-25 in New York City have similar needs and buying preferences? Sure, there could be some correlations, but to assume that all women in this group share the same tastes and purchasing habits is grossly inaccurate. Even more specific demographics can only help so much when it comes to determining preferences and targeting offers. Individual needs, desires and styles have an enormous role in influencing shopping habits. To truly tap into these areas and improve offer personalization, retailers must move beyond traditional demographics.
Retailers on Social Media
In recent years, the rise of social media channels such as Facebook, Twitter, Instagram and others have completely changed the game for how retailers communicate and build relationships with their customers. Today’s savvy retailers are all over social media, sharing not only offers and new products, but value adds such as industry news and other interesting information that followers will find useful without feeling like they’re constantly being bombarded with branded offers. Ideally, social media provides an avenue for a retailer to have a dialogue with its customers, responding to and asking for feedback and learning about specific preferences. With the use of sophisticated social media analytics, marketers can capture this information and use it to build personalized customer profiles that can offer far more insight than traditional demographics can.
Social media has also changed the way that consumers communicate and share experiences with each other. For example, if a shopper loves a new product or has a good shopping experience, they may tweet about it and share photos with their friends. From this, preferences become evident and conversations develop. Social analytics tools allow retailers to tap into these conversations to improve targeting, personalization and relationships. What’s more, consumers tend to generally be honest and transparent when communicating via social channels, as by and large they’re sharing opinions, often unfiltered, with their friends and social media communities. As such, social conversations are a great source for accurate, real-world consumer feedback and opinions.
In an environment where personalization is the name of the game for retailers, the insight that social media analytics can provide is priceless. Unlike traditional demographics, it offers infinitely more detail into individual buyers, allowing retailers to tap into emotions and desires that information like age and geographical location simply cannot deliver. This isn’t to say that traditional demographics should be ignored — they're still an important piece of the puzzle. However, the information that can be gleaned from today’s social conversations adds to it infinitely more depth and value.
As social media platforms continue to grow in numbers and prominence and analytics tools become increasingly more sophisticated, retailers will have a true opportunity to get to know their customers and better cater to them. With the retail world becoming increasingly more competitive, the focus on personalization is growing. Smart retailers are putting analytics to work to better tap the gold mine of information that is social media, and deliver improved personalization and offerings that go way beyond what traditional demographics can enable.
Stacy Gordon is chief marketing officer and business head-east of LatentView Analytics, a digital analytics company.