Segmentation of Retail Network in eCommerce

6 min readMay 10, 2021

If the retailers still don’t realize the importance of segmentation in the present era of personalization, they are at a big loss.

Segmentation of Retail Network in eCommerce

The segmentation of the retail industry in the eCommerce sector will help the retailers to enjoy double benefits as they can reach their targeted audience in a more emphatic way and provide them better customer service. As segmentation is precisely strategized based on data analytics, it provides the retailers a better insight into how to build a cost-efficient e-commerce app to achieve the goal of delivering personalized services by dividing the customers into homogeneous groups with similar needs and behavior.

Mcommerce and retail networks have formed a solid partnership and have rendered unparalleled services to the end-users. Retail marketers with the latest technologies like Artificial Intelligence (AI) and Big Data can work on the available data, analyze it to make pitch-perfect sales strategies, and enhance the product’s efficiency by making it more customer-centric improving the customer experience by manifolds.

The concept of market segmentation came into the limelight as in the retail market; the retail marketers had two approaches to satisfy the needs of their targeted customers.

  • Mass Marketing: Where the retailer approaches all the customers with an identical marketing approach.
  • Market Segmentation: Where the retailers approach a set of customers with similar needs and want.

Importance of Market Segmentation in retail

Market segmentation allows marketers to understand the nature of the market and utilize those learning while designing their next marketing campaign. We have listed some of the critical factors that justify the need for segmentation in this continually changing modern-day business realm.

  • The retail marketers will have the cushion of being ahead of their peers with a plethora of new-age technologies and retail industry software in e-commerce marketplace to target their audience in a more synchronized way.
  • The retail segmentation in E-commerce will also be an effective way to allocate funds according to a particular market segment’s needs, allowing the marketers to manage the funds in a hassle-free way.
  • Because of the segmentation, the retail producer can get a fair estimate of the region where their products are doing well and the region where they have to up the ante.
  • With market segmentation, the retail producer can remain aware of the business activities and gauge its potential.

Modern-day business is all about getting the timing right, and market segmentation will play a decisive role in ensuring the same.

Apart from AI and Big Data, IoT can also be a vital cog in enhancing the Position of Sales (PoS) process and allow the retail marketers to have more revenue resources.

Role IoT can play in enhancing the POS process

IoT applications are already providing rich dividends to the forward-thinking smart retailers and increasing their revenue sources. We have listed ways through which IoT can be vital in enhancing the PoS process.

Better Inventory Management

A mismanaged inventory can be a headache for the retailers as lack of tracking can lead to stock-outs and loss of billions of dollars. With IoT, the entire inventory process can be automated by applying smart inventory management solutions. Smart inventory management solutions are based on ibeacons, RFID tags, video monitoring, etc. For instance, when the IoT system sees that the product inventory is low, it will automatically re-order the necessary amount based on the analytical data.

Enhanced supply chain management

IoT-enabled supply chain management process will bring a clearer picture regarding the goods’ movement, time spent on the transport, and when the customer buys them online. Such real-time data is helpful, especially when you are dealing with delicate and perishable goods. With these impressive perks, about 75% of the retailers are looking to modernize their supply chain management process powered by the Internet of Things solutions.

Improved checkout process

The checkout process can be very tedious if not done correctly because any flaw could lead your customer to drop their cart and never shop from your eCommerce platform again. For example, to overcome the lengthy checkout process problems, Walmart has introduced a Walmart VR shopping experience. The customer gets a personal virtual shopping assistant throughout the shopping process. The virtual assistant can suggest a list of things to the customer based on their previous shopping history and choices, that is making the entire checkout process smooth and easy.

Top-notch customer service

The customer service segment of the eCommerce retail network can get a massive boost with IoT technology, as it allows the retailers to use the data to its optimal to predict customer behavior in a better way.

The retailers would have multiple sources to collect the data from, like social media, websites or apps, smartphone devices, etc., to understand the customers’ buying behavior, mold their marketing strategies, and provide more personalized services to the customers.

Benefits of segmentation of the retail network

Retailers have begun segmenting the retail network in eCommerce based on their targeted customers’ buying habits and their spending levels. It has given them a much-needed buffer time to understand the customers’ needs beforehand and be ahead of their peers. Some of the top benefits of segmentation of retail networks in eCommerce are listed below.

Synchronized store assortment

The retailers with Big Data and predictive analysis can apply a number of permutations and combinations to assort their online store in a better way. With synchronized store assortments, the customers would find it easy to navigate through the e-commerce website or mobile app and hence, increasing business chances of converting a potential customer into a buyer.

To ensure that your retail section’s store assortment is done in order, you should hire an expert e-commerce development company.

Render high values to the customers

Since the retailer now knows what a customer wants, they could increase their retention rate by providing a high-value personalized experience to the customers. For example, when a user shops at Amazon for a book, it shows a list of books according to the user’s selected genre. The next time the user will come on the platform, the first suggestion shown is the list of books according to the previous choices.

Mcommerce and retail network form a formidable pair in providing high values to the customers and make them feel at home during their shopping experience. Instead of promoting the general audience, the retailers can reward their high-value customers with perks and specifically target them to increase their spending limit and loyalty.

Better marketing and advertising strategies

The retailers can blend tailored advertising with foolproof marketing strategies, and even work on changing the layout, UI design of the eCommerce app to interact with the customers more comprehensively.

With Enterprise Resource Planning (ERP) in the retail industry, advertising and marketing will access all the necessary information related to the targeted customers. They can utilize it in enhancing the marketing campaigns.

Role of cloud computing

The modern-day business realm runs on data, and thus it becomes essential to store the data in an orderly fashion to use it when the need arises. Moreover, many retailers have moved to cloud computing because…

  • It helps in reducing the physical IT footprint in the store.
  • The retailers can capitalize on the elastic limit of cloud processing and provide better services to the customers even during peak times.
  • Retailers can also use cloud computing as SaaS and enhance their customer management and supply chain management system.

Cloud computing is a vital cog in enhancing the retail network’s importance in e-commerce and allowing the retailers to reach their customers and better match their requirements.


Segmentation of retail networks in eCommerce can increase the profit margins and allow the retailers to expand their business rapidly. But the retailers must make sure that the eCommerce retail network is easily accessible to the customers and must increase their shopping experience. Gaining a competitive edge with market segmentation of the retail network in the e-commerce industry is the future for the retailers, and if they are not willing to change, nothing can save them from doomsday.




Prismetric is an ISO 9001:2015 certified Mobile App Development company based in India and USA.