Magento 2, Customer Segmentation and Personalization

Customer segmentation and personalization continues to grow as an important marketing tool for businesses. Customers want to see information, recommendations and offers relevant to their interests and buying behavior, and marketers want to stop wasting effort on customers that aren’t engaging with their brand.

Magento 2 offers a number of customer segmentation and personalization tools that businesses can take advantage of out of the box.

Customer segmentation within Magento allows businesses to dynamically identify and create target groups of customers using a variety of customer characteristics as well as purchase and browsing behavior. Once these segments are created, they can be used to personalize content to those segments across the website.

Segments can be created from registered and guest customers and a customer can live in multiple segments at a time, depending on the segment criteria. Registered customers are defined as customers that have an account on the website, who are also logged in. Guest customers are defined as anonymous customers or registered customers who have not logged in. The customer-to-segment relationship is constantly refreshed in real-time, associating or disassociating customers from a segment as they navigate and take actions through the shopping experience.

Creating Segments

There are more options available for segmenting registered customers than guests because Magento collects and stores customer and purchase information for these individuals.

The following items can be used for segmenting both registered and guest customers:

  • Value in the shopping cart (subtotal, grand total, gift card, tax or shipping value)
  • Number of cart line items
  • Product quantity in the shopping cart
  • Specific products in shopping cart (based on category or product attribute information)
  • Specific products viewed by user (based on category or product attribute information)

The following items can only be used for segmenting registered customers:

  • Customer attributes and address information
  • Specific products in the wishlist (based on category or product attribute information)
  • Specific product was ordered (based on category or product attribute information)
  • Past order information, including Order Address (type: billing or shipping / location of address: city, state, zip), Sales Amount (total or average, date range, order status), Number of Orders (total or average, date range, order status), Quantity Purchased (total or average, date range, order status)

Conditions for creating a segment can be fairly simple, such as "all customers in Florida" or "all customers who viewed a product in the swimsuit category," or they can be layered together to create a more granular and targeted segment, such as "all customers in Florida or Georgia who have purchased products in the swimsuit category in the past 3 months."

Personalization Features

Once segments are created within the Magento admin panel, they can then be used to personalize content across the website or imported into a third party application for other marketing efforts.

The following website features can be personalized by customer segment:

  • CMS Banners
  • Related Products, Cross-Sells and Up-Sells
  • Shopping Cart Price Rules

CMS Banners

CMS banners allow a business user to display an image and/or block of content on a website page. Available content areas are subject to the design layout of your website. Through segmentation, those banners can be personalized to display specialized content for a customer segment and can be scheduled for a period of time.

In the example below, the homepage banner featured in Figure A is the standard banner that displays for all users that visit the demo website.

image 1
Figure A

Using Customer Segments and CMS Banners, a new homepage banner experience has been created for customers living in the states of Washington and Oregon. (See Figures B and C below).

image 2
Figure B
image 3
Figure C

Related Products, Cross-Sells and Up-Sells

Both related products and upsells can appear on the Product Detail Page as additional merchandising areas and cross-sells appear on the shopping cart page. These areas can be used to merchandise recommended products and/or add-ons that can be quickly added to cart by the customer, to encourage additional purchases.

Using the dynamic rules, a business user can configure different products to display in the related product, upsells, and cross-sells areas for a user based on their customer segment.

Shopping Cart Price Rules

Discounts and coupon code offers can be presented to customers using CMS banners and shopping cart price rules. Shopping cart price rules are if/then rules, similar to those of product recommendations, that can be set up to allow discounts/promotions to customers in a specific customer segment.

In the example below, Figure D, a promotional banner has been configured to display on the shopping cart page for customers that have spent over $100 online within the last 90 days. Additionally, a shopping cart price rule has been configured that only allows customers in that segment to redeem the code.

image 4
Figure D

In Conclusion

Magento’s customer segmentation and personalization does require manual setup and maintenance for a business user but does provide a fairly broad range of functionality natively, without the need for a separate 3rd party personalization/recommendation engine.