Psychographics

Upgrading from Demographics to Psychographics is the Edge Retailers Need Right Now

Since the early phases of digital marketing, online retailers have relied on customer demographics to run ad campaigns, serve up related product suggestions, and create content that piques consumers’ interest. But demographics such as age, gender, marital status, income and geographic location have failed to deliver the genuinely relevant product recommendations that replicate an in-store experience and the human touch.

Psychographics

Upgrading from Demographics to Psychographics is the Edge Retailers Need Right Now

Since the early phases of digital marketing, online retailers have relied on customer demographics to run ad campaigns, serve up related product suggestions, and create content that piques consumers’ interest. But demographics such as age, gender, marital status, income and geographic location have failed to deliver the genuinely relevant product recommendations that replicate an in-store experience and the human touch.

Meanwhile, the stakes for retailers to deliver relevant and personalized product suggestions are higher than ever. According to an Adobe report, two-thirds of customers crave greater personalization, and 42% get annoyed when online retailers serve up irrelevant information (can you blame them?)

Enter the combination of demographics and psychographics in your marketing strategy and overall digital experience. By getting more granular with your customer data and thinking bigger than just the objective details, you can create more relevant, contextual search results and product recommendations across various touchpoints. Ultimately, you can create a hyper-personalized digital experience akin to what customers might experience at upscale brick-and-mortar retail stores.

Challenges in Presenting Relevant Information to Consumers

A 2020 report from Contentsquare revealed that only 15% of consumers have been happy with recent online shopping experiences. Among their top pet peeves? Forty-two percent got upset when they couldn’t find what they were looking for through on-site search. By improving how your product catalog is tagged, you can improve the quality of your on-site search results. And by understanding information such as the emotional context behind their purchases (that crucial psychographic information) you can make stronger product recommendations to re-engage them later. 

Leveraging psychographics also makes it easier to suggest accessories that build a full outfit, creating happy customers who feel great about their purchase. And satisfied customers become loyal customers and brand evangelists who tell their friends about that great pair of pants they bought. 

So, What Exactly is Psychographic Segmentation in Marketing? 

Psychographic segmentation is the idea of sorting shoppers not just by basic facts such as their age, gender, marital status or location but by their motivations for making a purchase. Generally speaking, psychographics explore elements such as: 

  • Hobbies
  • Behaviors
  • Spending habits
  • Personal style
  • Values
  • Concerns 
  • Goals
  • Interests

This doesn’t mean you should ignore traditional demographics. It just means it’s high time we also explore psychographics in marketing and use that information to create better consumer experiences. Successful campaigns and digital experiences should be based on a combination of demographic and psychographic segmentation to create a clear picture of what your customers want and why they want it. 

For example, you might segment customers by: 

  • The occasion someone is shopping for
  • Style personality
  • Features they like, features they don’t, and what that says about their body type

Psychographic segmentation digs deeper, allowing marketers to understand what motivates their customers and then dish up relevant product selections that lead to happier shoppers and more sales. Brands can also better create marketing content and copy that speaks to their audience across multiple touchpoints. 

How to Capture Psychographics for Marketing

Where do you begin to collect this information? It comes down to having the right technology partner capable of deep tagging and analyzing customer behavior. Lily AI can assess your customers’ interaction with your products and their hyper-specific attributes regarding fit, style, fabric and more that other algorithms are not trained to catch. 

This begins to paint a picture of who your customer is and their motivations for engaging with a certain pair of jeans over another. For instance, if a customer has interacted with sheath dresses and long trousers in the past, our sophisticated algorithm may later recommend bathing suit options designed for long and lean body types once summer hits.

Lily AI works in two phases by first optimizing and enhancing your product catalog with more relevant product attributes and fashion tags. Our algorithm can then learn more about the customer based on the attributes they engage with the most. Our algorithm works based on more than one billion trained data points and more than 15,000 product attributes. It uses that data to learn about your customers’ individual preferences, better match them with product recommendations and create a psychographic profile for each customer. In essence, it helps you to get to know your customers really, really well.

Psychographics Power Personalization

Psychographic segmentation and customer personalization go hand-in-hand. Only when you understand a customer’s motives behind the merchandise they buy can you deliver a truly personalized online shopping experience. Get in touch today to learn more about how Lily AI can help. 

References

https://brizfeel.com/consumer-online-retail-shopping-behavior/ 

https://hbr.org/2016/03/psychographics-are-just-as-important-for-marketers-as-demographics

https://news.shopify.com/charging-ahead-shopifys-first-annual-future-of-commerce-report-reveals-five-trends-brands-need-to-know-in-2021

wordstream.com/blog/ws/2020/08/31/2020-ecommerce-marketing-trends 

https://blog.adobe.com/en/2018/01/06/adobe-2018-consumer-content-survey.html#gs.rbkyo7

https://www.businesswire.com/news/home/20201214005389/en

https://www.nextiva.com/blog/customer-service-statistics.html

https://blog.hubspot.com/insiders/marketing-psychographics

https://cxl.com/blog/psychographics/