I recently visited the beautiful cosmetic counters at the Nordstrom closest to my house. I had received an email a couple of days before which profiled my favorite brand of perfume and a well-known skincare company. Full confession time – Nordstrom was the first credit card I ever opened, and I have shopped there for many years. The physical structure of the store itself has not changed, but the decor, seasonal decorations, themes, as well as the music have all been updated to reflect current tastes. The products have changed over the years and, as time has passed, my tastes (and my budget) have also changed.

It was easy to identify the demographics, culture, behavior, and psychographics in this area of the store by each brand’s counter. The younger, trendier set were targeted in the corner area at the MAC counter, the more affluent and preventative aging set were targeted at the La Prairie counter, and the photograph-mindful at the Laura Mercier and Gucci counters. The placement of the counters, the music, the appearance of the different salespeople, as well as the display of items were all set to target a specific customer. Each customer was drawn to the counter which offered a particular attitude, aspiration, or benefit. The adjacent fragrance counter also had a different hierarchy. The fully synthetic (Chanel), the naturals (Jo Malone), and the status fragrance (Baccarat Rouge 540) each had their own set of salespeople, image, and price point. Understanding the mix of customer segments that matched each brand, and counter is something Nordstrom has done very well for a long time.

“Understanding the lifestyle and values of a segment can help create messaging that resonates on a deeper, emotional level” (Forbes, 2024)

I believe it is critical for personal items such as cosmetics, perfume, and lingerie to have an element of emotional connection for the buyer in order to build brand or store loyalty. When I have talked to friends and acquaintances, they relay the same thing – it is not enough to have a quality product for these types of items. These categories need an element of personal satisfaction, transformation, or even a touch of wish fulfillment in order to maintain a draw to them. Thinking about that, I believe key points to remember when implementing segmentation strategies include certain elements. These include making sure distinct customer profiles are well-defined and distinguishable, confirming each segment is a large enough grouping to be relevant, ensuring the groupings are easily identifiable by their characteristics, and validating the customer segment is relevant to company. Most importantly, it is essential to review these segments on an annual or semi-annual basis to confirm they remain relevant. If these strategies are applied to cosmetics and fragrance, they should be coordinated with the major designer clothing seasonal launches.

A new market segment I think would be great market to explore is people who engage in AI use. If a company such as Nordstrom could allow people to upload an image of themselves and virtually try on a different makeup item such as lipstick or eye shadow – it could be a game-changer in how Nordstrom customers and prospective customers buy online. Beyond cosmetics, Nordstrom could allow customers could upload their measurements, and virtually try on select clothing items with custom AI models. This could be used as a teaser-type option to draw people into the physical store. By offering access to exclusive brands or items, it could draw innovators and early adopters to the Nordstrom website and to their stores. In order to get this feature up and running, I would search for demographics to skew towards 18-60 year old women and men, enjoy a culture of innovation, engage in online gaming, social media consumption, and AI use behavior, and psychographics which included an attitude of virtual exploration, engagement in online shopping, and enjoyment of trying new products in an innovative way. Once I had my targeted segments, I would then engage in targeted ads through email, texting, and banner ads on social media. I would also place QR codes in the Nordstrom stores and email targeted consumers with QR codes and high-tech images. Depending on resources, I might invite innovators and targeted early adopters to an in-house, virtual demonstration experience. I would also consider holding virtual sessions with a gift delivery or voucher to entice customers to attend the sessions and offer feedback.

Source:

Forbes Nourijanion. (2024). Using Enhanced Marketing Segmentation to Engage Audiences. https://www.forbes.com/councils/forbescommunicationscouncil/2024/07/01/using-enhanced-marketing-segmentation-to-engage-audiences/