Segmenting the Wearables market

Segmentation is all about finding the groups of people, their mind-set and touchpoints that generates a marketing opportunity – the competitive advantage.

Our approach to segmentation is three pronged:

Too often we are approached by clients who say that they have received a segmentation from elsewhere that makes statistical sense – so fulfilling the second requirement above – BUT they can’t do anything with it. This is usually because they have no way of identifying the segments in the real world. As a result there is no marketing story.

So, when we have a segmentation study we constantly ask ourselves and our clients “What are we going to do with this?”. This is a discipline that helps everyone to develop their thinking and ultimately creates an information set that makes a difference to the business.

Our thought process is different from most in that we set out to identify a number of fruitful marketing opportunities rather than seeking to divide up the whole of the market into discrete segments. In the real world people are multi-dimensional – they do different things, they form different groups through the day or week. So, we let this come out in the analysis too.

As a client – it gives you the chance to reach out to those people in the different parts of their lives – as a parent of toddlers, as a full time worker, as someone who loves to use social media to stay in touch. Each part of their lives creates a different slant to their story, a different mind-set, a different set of touchpoints.

You only need to look at our segmentation of the Wearables market to see how we put this to work. It was obvious from a cursory look at the analysis that age and gender were important predictors of take up of and interest in Wearables.

However, this didn’t give us any real richness in thinking. So, we used a combination of regression analysis and CHAID to identify which variables were best predictors of take up and interest.

For thoroughness we ran analyses that separated out demographic, behavioural and attitudinal variables as well as running analyses that combined them all. This ultimately gave us confidence that we chose variables that were strong differentiators. We also applied a marketing mind-set to choose variables that would generate segments that made intrinsic sense to marketers and gave them audiences they could work with.

So, for example, we have Competitive Full-Time Workers – they work hard and play hard. They want technology to give them a competitive advantage and to prove to themselves and to others how well they have done.

Contrast this group with Working Mums – their main use of technology is to stay in touch – especially with family. Knowing where they are and that they are safe is important to them. Working Mums can be Competitive too and therefore are open to more than one trigger. Our approach means that we identify the appropriate triggers to apply at the appropriate times through the appropriate channels.

Aside from the demographic criteria we found that regular exercisers are highly interested in wearables – and not just Activity Trackers. Within exercisers, we see a distinct difference between the Younger / Older Keen Exercisers in terms of triggers and barriers.

Another group that emerged from our behavioural analysis is one that loves social media of all types – the Social Reliants. They love the potential of technology to stay in touch. They look to be the low hanging fruit – their enthusiasm for new tech and wearables is extremely high. However, they are also a well-informed group and their barriers to take up – especially around security are high. So, plenty of opportunity here but they need convincing.

A final segment is an interesting sub-segment of youth. They don’t see themselves as being healthy and superficially want the technology to give them an easy path to health – the Less Healthy Experimenters. However, they are more into retail and want the technology to make it easy for them to find the bargains.

So, we have six intriguing segments each with their different life priorities and different motivations for taking up wearables. For more detail check out our page on wearables here.

We achieved this depth of opportunity identification even with sticking to reasonable sample sizes. We have an overall sample of 1,000 at each wave. Under an approach that says “let’s divide the whole market into discrete groups” – to drill down to the level of competitive full-time working mums would have required a sample three times that to give us the chance to tease out the same level of insight.

So, if you are interested in a segmentation study or want to work with people who love drilling down into data sets to find your main marketing opportunities – please get in touch! Our difference is that a director close to your business is running the analysis. I will see opportunities that a junior researcher or analyst may miss. I invest the thinking time to explore the opportunities properly – knowing the return it can create for your business.