Battle of the Segments: Market Segmentation vs. Customer Segmentation

In a former life, I worked for a cloud-based retail technology solutions provider looking to bring a retail merchandise planning application to the US market. As with all IT vendors, the actual marketing of the solution preceded the finished product.

In the solution pitch, we talked a lot about top-down and bottom-up planning processes. Top-down planning includes the strategic objectives mandated by management based on a number of inputs, included last year’s actual company performance, growth objectives, forecasts and general market indicators. For most, top-down planning was only as granular as the department/category level (most retailers employ at least a four-level merchandise hierarchy often starting with department and/or category). Then the merchandisers work the plan to devise a bottom-up plan. Oftentimes, these plans can go as granular as the SKU by location level, but might be higher in the overall product/store hierarchy.