Target marketing in e-commerce

Go far and wide or rather focus on a specific customer segment? This is a question almost every e-commerce business owner faces, and this is what target marketing is all about. You can generally think about your products and customers in two ways: By treating them like one mass or dividing them into narrow niches/segments. Both these approaches have their pros and cons. Let’s examine them.

To some extent, it’s all a matter of market segments. To put it shortly, you can divide your products and related target groups into segments (niche marketing), or you can refrain from doing so and concentrate on selling to everybody (mass marketing). Admittedly, today, the latter approach is far less common, especially in e-commerce. This doesn’t mean, however, that it’s wrong. There are stores that make a good living selling products using mass marketing. But let’s start from the beginning.

Target marketing strategies

Target marketing is all about deciding where, how, and to whom you promote your products. Your customers can be viewed as a target group. You may want to have just one target group. This way, you opt for mass marketing. You go far and wide with your message, no matter who, where, and how listens to it. You can also go with customer segmentation and divide your message into smaller chunks divided by product categories and target audiences. This is niche marketing.

In the modern e-commerce world, you will frequently hear that segmentation and personalization are crucial to your store’s success. After all, your every customer wants to feel special, feel noticed. And in fact, segmentation (along with personalization) allows you to achieve this goal. In other words, when your customers are divided into specific target groups, you can think of:

• Proposing tailor-made offers
• Answering their particular questions and doubts
• Developing more compelling messages

But also, analyzing your marketing activity.

Does it mean that mass marketing is a thing of the past? Not necessarily. Let’s take a closer look at both of these marketing strategies.

MASS MARKETING

This strategy is prevalent in the FMCG sector. Let’s take candy bars. Almost everyone might want to purchase one, correct? It doesn’t really matter whether you’re a millionaire or a student, whether you live in New York or in a small town in Texas, or whether you’re single or a mother of three. This means that your marketing message concerning the same candy bar is unified. That’s why large food chains use this strategy. You don’t see ads like “candy bars for athletes running marathons”, do you? Typically, if there’s a specific offer, it just contains a product’s image, the discounted price, and that’s it.

Do you want an online example? There you go – streaming platforms. Usually, it doesn’t matter where you live and what your interests are. You have to pay a fixed monthly fee that’s the same for all customers.

From many perspectives, mass marketing is straightforward and tempting. All you have to do is start a marketing campaign, and you can count your profits. In some instances, yes, it can be possible. However, there are some significant downsides to this strategy:

• Mass marketing is expensive. If you don’t know who you’re talking to, you have to talk to everyone, and speaking to everyone is pricey, especially in the online environment.
• Mass marketing is difficult to measure. If you talk to everyone using various marketing channels, you will have a hard time estimating which channel, which message, and which target audience is the most lucrative one. Therefore, you have to stick with this expensive strategy forever because you know that “something works”. The only problem is, you don’t know what “something” is.
• Mass marketing is frequently ineffective: At first glance, it’s the opposite! After all, you’re present everywhere with your communication. What can be more effective? Well, when you’re talking to everyone, you’re, in fact, talking to no one.

NICHE MARKETING

Niche marketing is the opposite technique based on the assumption that customers should be divided into specific categories, depending on their interests, demographic characteristics, and online activity. With niche marketing, analytics tools like Google Analytics are essential. After all, before you can start talking to narrow target audiences, you have to know what they are looking for and what are their main characteristics.

Therefore, when you decide to go with niche marketing, you have to be prepared to run many campaigns simultaneously. And yes, it sounds like a time-consuming and complicated endeavor, but only at the beginning. The more data you gather about your customers and their behaviors, the more tailored campaigns you can launch.

It’s the same story with marketing channels. Niche marketing is concentrated on analyzing data and measuring results. If you find out that a specific marketing channel is not effective, you can drop it immediately and focus on those that actually work.

The good news is, in many cases, niche marketing can be cheaper than mass marketing. How is that possible? Because niche marketing makes the most of the techniques that allow you to decrease costs:

• Long-tail phrases: It’s cheaper to display ads matching the “women’s skis for beginners” query than just “skis”.
• Narrow target audience: If you narrow your target audience down, it usually translates into cheaper ads because fewer internet users match your description.
• Facilitated optimization: With mass marketing, there’s almost no room for optimization. With niche marketing, it’s a different story. Here, you can analyze and optimize almost everything. And the more optimized your ads are, the more money you make, which means that your ads are more profitable.

The multichannel approach

If you run an online store, you surely understand that using diverse marketing and sales channels requires a different approach and strategy. That’s why, currently, the vast majority of online stores sell and promote their products not only on their own websites but also in many other channels, including marketplaces like Amazon, eBay, and price comparison websites. Read more about this multichannel approach in our article: Which products to sell and promote on the most important e-commerce platforms?

E-commerce is the perfect environment that enables you to make the most of both these strategies. Suppose you sell products that can be both viewed and promoted as mass and niche products. Let’s use a socks example. They are definitely mass products. Everyone needs socks, right? But, at the same time, socks can be niche products. After all, you have:

• Dress socks
• Casual socks
• Sport socks
• Thermal socks

Why not divide your offer into these and more categories? Here’s what can you do:

THE BEST OF BOTH WORLDS

Start with a product that a wide range of customers can purchase. Let’s say it’s a pair of white sport socks. You can use this product for mass marketing to drive traffic to your online store. It’s best when such a mass product is offered at an attractive price so that many customers will feel encouraged to place an order.

Next, you can direct your customer’s attention to other products available in your store depending on the given customer’s characteristics and interests. You can show your thermal socks to people interested in outdoor activities, maybe trekking or rock climbing. Dress socks will be perfect for people who work in an office or have to go to work wearing a suit – it’s another vital segment of customers for you. This way, you can create a synergy of both these strategies.

Pricing techniques

Lastly, we ought to talk about prices. As you already know, products for mass marketing should be offered at appealing prices so that customers want to buy them. These products can be viewed as bait – the best way to drive traffic to your webstore.

But there are more aspects of the pricing strategy that you need to consider. Take a look at another blog post about pricing strategies in e-commerce.

When it comes to setting optimal prices in your online store, both concerning mass and niche marketing, you should think about dynamic pricing. Our AI-powered platform enables you to set the most profitable rates in your store. This way, you can attract many customers and then, thanks to online analytics, segmentation, and personalization, direct them to various product categories based on their characteristics.

Find out more about dynamic pricing in your e-commerce business:

Request a free consultation!