Demographically segmenting customers means grouping customers on statistical data such as age, gender, income level and geographical location. This division helps bring under served divisions to light, enabling a better product fit.

Age

Each age group has distinctive different needs and preferences. By focusing on each group, you can appeal to more customers by tailoring your products better suited to their needs. The skincare industry is approximately estimated to be US$184bn in 2024, however skincare of teenagers is only about US$12bn. Considering teenagers also need skincare due to changing growth hormones, their market is relatively under-served. Bubble Skincare understood this disparity and has successfully targeted teenagers, coming up with innovative offerings for them.

Gender

Sectioning target audience by gender is one of the easiest methods to carve a niche. Today, the more traditional products aimed towards women are finding a market with men. Understanding gender preferences can help tailor product offerings and marketing messages. For example, 90% of all jewelry in the world is made for women. If you are looking to establish yourself in jewelry line, look into how you can serve the smaller market and capture more attention like Manly Bands did. They looked for an event where men would definitely wear jewelry, like when getting married and decided to target men exclusively for wedding bands. Most jewelry brands target women and just have a very small selection of men’s jewelry. No other brand before ManlyBands had established themselves to serve men with a wide variety of designs targeted just for them.

Income Level

Customers buy products/services as per their means. Selecting your target customer’s based on income levels helps you decide not just how to price your products, but what quality to offer as well. Reinforcing your product branding and offering to match this income group can help you succeed. Take the travel advisors Scott Dunn, they consistently differentiate themselves as the go to luxury travel experts.

Family Size

Family size and composition impact consumer needs and preferences. A company selling household products might create targeted campaigns for large families, promoting bulk-buy discounts and family-sized packages. Meanwhile, single individuals might be targeted with smaller, convenience-focused products. According to Bureau of Labor Statistics, more than half of the adult American population is unmarried. Alibaba, the Chinese ecommerce giants, caught onto this trend more than a decade ago, when it started the Singles Sales – a sale on 11.11 every year targeting singles. By catching on to trends early, they have experienced a phenomenal growth in sales.

Education

Educational background can affect interests and purchasing decisions. An online course platform might segment its audience by education level, offering advanced courses and certifications for college graduates and professional development workshops for high school diploma holders.

Occupation

Occupations often dictate consumer lifestyles and needs. A business selling ergonomic office furniture would target professionals working from home, emphasizing comfort and productivity. Conversely, a retailer of industrial safety equipment would focus on manufacturing and construction workers, highlighting safety features and durability.

Demographic segmentation is a powerful tool for eCommerce businesses, allowing them to create products targeting niches that resonate with specific audience segments. By segmenting customers demographically, many lesser known segments can be served better to capture market shares.