How many customer segments do you need?

Are you using enough customer segments? Almost certainly not, unless you're using VarietyIQ!

Merchandising teams sometimes attempt to split their customer base into segments, and then work to ensure each is well supported with products they love. The idea is to lift sales, although this also increases work for the merchandising team.

We've seen this approach fail time and again. Why? As we show here you need an unmanageably large number of customer segments to capture even a small fraction of the variation in preferences of a customer base. This sets up an unfavorable tradeoff between benefit captured and work needed. Is the benefit of segmentation for merchandising illusory then? No, not if you use VarietyIQ!

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