Segmenting by recency and seasonality in e-commerce

In a recent post I wrote about segmentation strategies based on click-behavior. Now it’s time to move past click behavior and ramp up your segmentation strategies based on buying behavior! The time a consumer comes to your site and the season play a huge role on not just click behavior, but buying behavior.

RECENCY

First up is recency, or rather “when did the activity or purchase happen” and “did multiple clicks or purchases occur?” Ask yourself how far apart these activities happened, and does it impact your specific business:

Retail: Purchase cycles have a huge impact on browsing or purchase activity, so make sure you mind that data before segmenting and targeting too quickly. Take a retailer like LL Bean, whose purchase cycles tend to be short and sweet. Customers may buy pants one day, and a shirt the next, so your product recommendations may need more emphasis on items bought in the same cart or visit, or items viewed in the same week. Don’t try to reach too far back in the analytics around that consumer, because chances are they’ve moved on to a new shopping mentality.

On the flip, for companies similar to Best Buy, basket analysis is still important, but reaching back into the past can also be beneficial to your recommendations. If a customer had previously purchased a higher ticket item, such as a TV, stereo system or washer/dryer, the purchase cycle is much more infrequent, but still relevant when the time comes around to upgrade that appliance.

Travel/Leisure: With the cost-comparison factor playing a huge role in online travel booking, behaviors will undoubtedly vary by time of year and type of travel product being purchased. Time on the site is a huge factor that, if used correctly, can dramatically boost your targeting and personalization conversions. Travelers usually browse several days, or even weeks, before they purchase vacation packages, hotels, rental cars, flights—you name it. Expect most consumers to browse and compare prices earlier in the week and complete the booking later that week.

Media is more about browsing, rather than buying, but still holds a great opportunity to target. Be mindful on when consumers are viewing content, particularly within the same session or visit. Browsing activity is very dependent on content. For example, ESPN browsing is based on sports season whereas the New York Times will be more story and topic specific.

SEASONALITY

The second wave to watch for is seasonality. This is a huge factor in segmentation since consumer mindset inevitably changes, and purchase behavior, as well as browsing activity will be impacted.

Retail – Holidays, holidays, holidays. You can already expect an increase in traffic and purchases, and you’ve put in a lot of work into your sales, promotions and branding. But remember, people are buying gifts, not shopping for themselves. So, first of all, don’t spend too much time targeting based on their past purchases in the off-season—it may not have much of an impact since they are shopping for a loved one, friend, co-worker, etc. However, the important items to highlight for this mad-dash-shopping-segment are shipping dates and stock status. The comfort they receive in knowing that you have it in stock and they’ll receive it on time, no matter if there is a slight price difference, can ensure you win the business instantly.

Travel – In the winter, recommend getaways to the Caribbean or sunny destinations, while for long weekends emphasize last-minute getaways that you know people can actually afford money and time-wise. If you notice a consumer frequents the same destination year over year, or changes up their vacation, recommend and target accordingly. Remember, it’s all about giving them what they want, not steering them to somewhere they’d never go. Additionally, if you know a visitor is a business traveler, up-sell dry cleaning or room service add-ons, or highlight babysitting services or kid-friendly local attractions.

Don’t forget that the ability to integrate your loyalty data to highlight different discounts and benefits, in addition to recency and seasonality will leave you with highly personalized campaigns, for the right person, at the right time and on the right product.

A career long evangelist in online, Mark Simpson is the founder of Maxymiser where he is focused on increasing conversions and Web site engagement for clients through all verticals including Asda, Santander, Virgin and Cancer Research. Prior to Maxymiser Mark headed up online marketing and business development for Travelport and focussed in particular on the acquisition of ebookers, Octopus Travel, Hotel Club and RatesToGo. Prior to Travelport Mark was part of the team taking Hitwise to market at on its start-up in the UK.