Types of Customers in Retail

and Selling Strategies

Omni-channel Retail and Sales Management

By:
Arushi Chauhan
Manvi Taneja
Rupali Kesharwani
Sapna Yadav
Soumya Raj
 Contents
● Customer v/s Consumer

● What is a Customer Group?

● Customer Segmentation

● Types of Customer Segmentation

● Advantages & Disadvantages of Behavioral
Segmentation
● Customers Groups based on Behaviour

● Customer’s Buying Journey

● Customer Groups in a Retail Store

● Selling Strategies
A customer, sometimes also known
as a client, buyer, or purchaser, is
the recipient of a good, service,
product or an idea - obtained from Customer v/s Consumer
a seller, vendor, or supplier via a
financial transaction or exchange
for money or some other valuable Consumers are defined as individuals
consideration. or businesses that consume or use
goods and services.

Customers are the purchasers within

the economy that buy goods and
services, and they can exist as
consumers or alone as customers.
 What is a Customer group?

● A customer group is a way of aggregating customers

that are similar in some way.
● It is a subset of similar customers.
● When businesses begin retail customer segmentation,
individuals are sorted into groups based on gender,
geographical location, commonly purchased goods, or
other defining features such as behaviour.
 Customer Segmentation
Customer segmentation is the process of dividing customers into groups based
on common characteristics so companies can market to each group effectively
and appropriately.

Customer segmentation can help a retailer:

● Create and communicate targeted marketing messages.

● Identify ways to improve products.
● Establish better customer relationships.
● Test pricing options.
● Focus on the most profitable customers.
● Upsell and cross-sell other products and services.
● Develop Effective Retention Strategies.
● Provide Superior Customer Experience.
 Types of Customer Segmentation
Demographic Segmentation: It is one of the most popular and commonly
used types of market segmentation. It refers to statistical data about a group of
people, such as age, gender, income etc.
Geographic Segmentation: It is the simplest type of market segmentation. It
categorizes customers based on geographic borders, such as country, city or
region.
Psychographic Segmentation: It categorizes audiences and customers by
factors that relate to their personalities and characteristics, such as their
values, attitudes, interests, psychological influences etc.
Behavioral Segmentation: While traditional approaches to segmentation
focus mainly on who customers are, behavioral segmentation focuses on how
the customer acts. It is a form of customer segmentation that is based on
patterns of behavior displayed by customers as they interact with a
 Advantages of Behavioral Segmentation

There are several benefits of segmenting on the basis of customer

behavior. Some advantages of behavioral segmentation are:
● It helps a company identify customers with a similar behavior.
This makes it easier for companies to target them.
● Needs of people showing consistent behavior can be catered to as
compared to people with erratic behavior.
● Brand loyalty can be further built upon those customers who have
shown as affinity towards a brand. Thus behavioral segmentation
can create a loyal customer base.
 Disadvantages of Behavioral Segmentation

There are certain drawbacks on segmenting the market on the basis of

behavior. Some of them are:
● Customer behavior changes with time, location, occasion,
requirement etc and it can not always be predicted correctly.
Behavioral segmentation can only give a framework on personality
traits and behavior.
● Mostly, behavioral segmentation would be done on the basis of
qualitative data and not completely quantitative data. Hence,
making forecasts, budgets, expenses etc would all depend on
certain assumptions.
Customers Groups based on
Behavior
Need-based Customers
These customers purchase to Selling strategies:
fulfill a need. They shop for only
● The best way to approach a need-
specific products when they need based customer is by initiating a
them. They usually don’t require personal interaction.
an assistant to choose a product
because they usually have ● To market to them, use utility-
knowledge about the product centric marketing, across multiple
channels.
they want to buy. They already
know the section they are ● Need-based customers can be
heading to when they enter a converted into a loyal customer if
store. This type of customer they are provided with good and
easily gets lured to the other satisfactory service.
businesses.
Loyal Customers
These customers are loyal to a Selling strategies:
retailer and consistently choose it ● To market these customers, use
over other retailers. They are not personalization, individualized
easily swayed by price and attention and repeated marketing
availability. Only 12% to 15% contact.
customers are loyal to a single ● Find out what they like the most
retailer but they generate about the brand or store and
demonstrate those qualities time
between 55% and 70% brand
and time again.
sales. Some of them can become
promoters of the brand by
sharing their experiences with
other people.
Impulsive Customers
Impulsive customers’ segment is Selling strategies:
a bonus segment for any ● The key to market to impulsive
business, as these customers customers is to tap into their
don’t shop as per their need or emotions.

because of ongoing sales. The

shopping of these types of
customers is highly influenced by
their current mood. They usually
tend to buy a product, if, at the
time of shopping, they find it
useful and good at that point in
time. They tend to be
emotionally driven as opposed to
Discount-driven Customers
These customers are always on Selling strategies:
the hunt for discounts. They are ● Focus on advertising offers and
bargain hunters, always looking promotions to market to these
for the best possible price for a customers.
● Personalized emails, brochures and
product. They also have a social media are great ways to stay
tendency to frequent the same in contact with them.
retailers and brands.
 Customer’s Buying Journey
It is the journey or buying process that customers go through to become
aware of, evaluate, and purchase a new product or service, and it consists of
three stages that make up the inbound marketing framework.

The journey consists of a three-step process-

● Awareness Stage: The buyer realizes they have a problem.
● Consideration Stage: The buyer defines their problem and researches
options to solve it.
● Decision Stage: The buyer chooses a solution.

Building behavioral segments by customer journey stage allows a retailer to

align communications and personalize experiences to increase conversion at
every stage. Moreover, it helps discover stages where customers are not
progressing, so the retailer can identify the biggest obstacles and
opportunities for improvement.
 Awareness Stage
● During the Awareness stage, buyers identify their challenge or an
opportunity they want to pursue. They also decide whether or not
the goal or challenge should be a priority.

● The customer has very little buying intent at this point.

● Brands can capture customers’ attention at this stage and

introduce itself as a potential solution to their problem.
 Consideration Stage
● During the Consideration stage, buyers have clearly
defined the goal or challenge and have committed to
addressing it. They evaluate the different approaches
or methods available to pursue the goal or solve their
challenge.

● In this stage, users might not be ready to make a

decision.

● A brand’s goal at this stage, should be to educate the

audience and show them the benefits it provides, as
 Decision Stage
● In the Decision stage, buyers have already decided on a solution
category. For example, they could write a pro/con list of specific
offerings and then decide on the one that best meets their needs.
● Brands should work upon identifying people ready to make a
purchase and getting in front of them at the exact right moment
to have an edge over the competition and a chance to win a new
customer.
Customers Groups in a Retail
Store
 The well-informed shopper
Selling strategies: Consumers these days do a
● Acknowledge their expertise
ton of research before
and listen to what they have making purchase decisions.
to say. They read product
● Ask questions to see if they descriptions, compare
need information that they prices, and check reviews so
have not uncovered in their you can bet that when they
research. walk into a store, they
● Provide information in a way
already know a whole lot
that makes them feel like
about what the store has to
they are getting insider
knowledge or access. offer. Such customers are
the well-informed shoppers.
 The showroomer
Selling strategies: Showroomers are those who
● Shift their focus from price to
try on or check out products
value. in person, but decide to
● Bring their attention to any purchase them online if they
in-store offers, loyalty find a better price. Many
programs, or benefits. large retailers deal with
showroomers by matching
their competitors’ prices.
Best Buy and Walmart for
example, have price-
matching strategies to get
people to purchase their
products in-store.
 The wanderer
Selling strategies: These are shoppers who just
● Acknowledge them, but wander into the store
generally leave them alone.
without any real intention.
● It’s best to let them be, until
they ask for help. They typically walk in
● Encourage impulse purchase. because something caught
their eye or they’re simply
killing time.
 The customer on a mission
Selling strategies: These are customers who
● Only reach out if they have
already know what they
questions, give them straight- want and intend to just get
up answers and don’t try to in and out of the store. They
upsell. want to get their hands on
● Make the shopping process their purchases as soon as
simple and convenient for possible, so they can leave
them. and get back to doing other
things.
 The confused/indecisive shopper

Selling strategies: These are customers who

● Figure out their specific needs
aren’t sure if they want to
and educate them on what purchase or they’re unable
they need to know. to decide what exactly to
● Ask questions about their buy. Often, customers who
needs and try to help them. are having trouble deciding
either don’t have enough
information, or have too
much that they’re
overwhelmed.
 The bargain-hunter
Selling strategies: The main thing that the
● Try to make them feel that
purchase decision of bargain
they’re getting a good deal. shoppers is pricing. They’re
● Sell them on value or point after the lowest price, and
out why purchasing from the they’re willing to shop
store will actually save them around until they find it.
money in the long run. These type of shoppers are
● Capture the information of
not loyal to the brand.
the customer to notify them
about any upcoming sale or
promotion.
 The chatty customer
Selling strategies: These are customers who
● Take some time to listen and
love to talk and tell stories.
express a genuine interest in They can sometimes keep
what they’re saying. the sales staff from doing
● According to Nicole Reyhle, their job or taking care of
associates should look such other shoppers.
customers in the eye, smile,
and say something like “I
would so love to talk to you
more about this – but I see
someone else who needs my
help too. I will check back in
with you, ok? Thanks for
being here.”
 The regular customer
Selling strategies: Regular customers are the
● Make sure they feel valued.
best types of shoppers to
● Find out what they like the have in the store. They
most about the brand or store already like the brand or
and demonstrate those store and are loyal.
qualities time and time again.
 The angry, demanding pessimist
Selling strategies:
This is the only type of
● Be understanding, listen well, customer that can be truly
and stay calm.
● Ask them what they think difficult. Valid complaints are
would be a fair solution. Offer easy to deal with: you just
a fit solution that they are
willing to accept. take care of the problem in
● Don’t feel obligated to go whatever you see fit, and
above and beyond.
the customer is satisfied. But
there will be the irrational
shopper who is looking for
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Thank You