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Advances in retail media — and what they mean for the future of advertising

Published: January 23, 2024 by Experian Marketing Services

What advances in retail media mean for advertising

Retail media networks (RMNs) are an exciting innovation within the advertising industry. A retail media network refers to an advertising platform that a retailer owns, providing marketers with the opportunity to buy advertising space on the retailer’s digital platforms as well as extend their reach offsite with key platforms the retailer has partnered with to open up their media buying to advertisers. The retailer uses first-party data and customer insights to create new advertising opportunities and connect with shoppers throughout their buying journey. 

In this article, we’ll discuss the significant advances in retail media trends and technology — and their implications for the future of advertising.

Benefits of retail media for advertisers

Every online impression counts in the digital era, making retail media especially advantageous for advertisers. It yields new opportunities for advertisers to thrive, which we’ll discuss below. 

Get access to first-party data

First-party data is a valuable asset for advertisers. Retail media networks offer advertisers direct access to customer insights from the retailer’s data vault, which helps them create highly personalized ad campaigns and connect with current and potential customers.

Custom marketing options for each brand

Retail media provides brands with various marketing options, from product listings to onsite display advertising. These options allow advertisers to customize their approach, deliver tailored messages to their target audience, and meet consumers where they are.

Reach new customers

Retail media networks empower advertisers to connect with new and existing customers using retailers’ extensive digital presence. These networks extend beyond a retailer’s own website and allow brands to tap into a broader audience base; major RMNs often have a significant offsite presence and provide advertisers with opportunities to reach consumers across various digital touchpoints and platforms beyond the retailer’s controlled environment. This reach enhances brand visibility, engages diverse audiences, and contributes to the growth of customer acquisition. 

Closer proximity to purchase decisions

Another benefit of retail media is its ability to position brands closer to the point of purchase in the customer journey. Targeted, data-driven advertising strategically placed across various touchpoints enables retailers to influence consumers when they are already lower in the purchase funnel. This proximity increases the likelihood of faster purchase decisions, especially when complemented by strategies such as timely offers and retargeting, expediting the decision-making and conversion processes.

Consumers prefer personalized advertising

Research has shown that approximately 50% of consumers will spend more money with companies that personalize their e-commerce retail experience. Ads relevant to a consumer’s interests and aligned with their behaviors make shoppers more likely to engage with a brand and find it easier and more convenient. As retailers honor consumer preferences for personalized advertising, they’ll find it easier to align with consumer preferences and provide an improved shopping experience.

Retail media network use case: Experian’s impactful marketing attribution with a discount store giant

Experian’s past collaboration with a discount store giant involved implementing a comprehensive marketing attribution strategy. The primary goal was to effectively demonstrate brand campaign performance and optimize ad spend within the retail media network. We built a full-stack attribution solution that connected their offline and online data, and our approach was as follows:

  1. We started by collecting exposure data from all touchpoints, such as the website, app, and offsite display and social, to turn anonymous exposures into identified individuals and households. 
  2. Additionally, we gathered debit and credit card transaction data from in-store and online points of sale to better understand purchase behavior. We also unveiled new demographic insights for the retailer. 
  3. To streamline the decision-making process, we provided an easy-to-read reporting tool that showcased vital performance metrics. 

Takeaways from the collaboration emphasized the importance of:

  • Understanding the audience seeing the ads and those making purchases.
  • Analyzing incremental lift and identifying insights or trends.
  • Sharing these valuable insights across the organization and with advertisers to inform future campaigns and brand positioning.

Utilizing recent trends in the retail media landscape

This case study serves as a prime example of how recent retail media trends are shaping a data-centric, integrated, and insights-driven future for advertising in retail. Our marketing attribution strategy aligns with the industry’s shift toward data-driven decision-making in RMNs. 

Today, retailers are adopting full-stack attribution solutions like ours, enabling them to connect offline and online data to understand customer interactions better. This reflects the trend of looking for a holistic view of customer journeys and highlights the importance of integrating diverse data sources to understand consumers comprehensively.

Moreover, our strategy to transform anonymous exposures into identified individuals, integrate transaction data, unveil new demographic insights, and provide an easy-to-read reporting tool mirrors the trends of enhanced personalization, merging online and offline data, and simplifying analytics within RMNs. 

Using new retail media

Our introduction of a user-friendly reporting tool highlights the potential of new retail media to change how advertisers analyze data and gain actionable insights. It emphasizes the value of advanced tools in optimizing ad campaigns, measuring performance metrics, and informing future strategies. New technology will continue to drive effective marketing attribution and shape the future of retail advertising.

Kroger Precision Marketing’s newly announced platform

Kroger Precision Marketing (KPM) represents another excellent retail media use case. The retail media arm of the popular supermarket chain is looking to the future with the launch of its advertising platform. KPM is committed to innovation, and this move underscores its desire to be at the forefront of the retail media landscape. Let’s take a closer look at some of the essential features of this new platform.

In-house

KPM recently announced the launch of an in-house advertising platform — a significant shift from their previous practices, where they relied on external tools and systems for their retail media services. By bringing the ad technology in-house, KPM has greater control, flexibility, and the ability to align its platform precisely with its retail media goals. This decision enhances Kroger’s self-sufficiency and enables quicker adaptation to evolving market demands. 

KPM’s new in-house platform was officially rolled out on October 13, 2023, and is redefining how advertisers interact with Kroger’s expansive base of consumers.

Easier for media buyers

KPM’s in-house platform is also focused on providing better tools for media buyers. The platform is designed to offer advanced automation and optimization capabilities that will make campaigns more efficient and data-driven. By using this platform, media buyers can easily reach the right audience, customize their messages, and fine-tune their campaigns — all in one place.

Integrated platform

KPM’s new platform will integrate with existing ad campaigns and eventually encompass all their retail media options. This interoperability makes migrating ongoing campaigns easy and minimizes disruptions to advertising efforts. In the long run, the platform will serve as the foundation for all KPM’s retail media services. Advertisers will have a one-stop solution for on-site and off-site media channels to ensure consistency and efficiency in retail media strategies.

KPM’s emerging retail media solutions demonstrate a commitment to advertisers and their changing needs in a shifting digital era.

Home Depot retail media 

Home Depot, a well-known player in the home improvement retail industry, has made great strides in retail media. With an impressive annual customer transaction count of 1.7 billion and 3.6 billion visits to homedepot.com, their Retail Media+ platform provides advertisers with unparalleled visibility, reaching 198 million individual customers across 2,322 stores, according to their site. The benefits of Retail Media+ also include 24/7 self-service access to advertising portals, real-time reporting for campaign optimization, and dedicated support.

What Home Depot’s Retail Media+ does right

Home Depot’s Retail Media+ has set itself apart through strategic initiatives that prioritize enhancements to the shopper experience. Here’s a closer look at what makes Home Depot’s approach to RMN noteworthy:

  1. Seamless integration: Retail Media+ seamlessly integrates into the customer’s journey without disrupting their experience. The platform allows the delivery of targeted ads across various Home Depot-owned spaces, including the website, app, in-store, email, and offsite channels like social and video.
  2. Supplier-centric ad inventory: Home Depot allocates the majority of its RMN ad inventory to suppliers. This ensures the ads presented to customers align closely with the products available at Home Depot for a natural connection between onsite and in-store experiences.
  3. Customer-centric approach: Melanie Babcock, Vice President of Retail Media+ and Monetization at The Home Depot, emphasizes maintaining a customer-centric perspective. The goal is not merely to monetize the website but to enhance the customer journey by incorporating suppliers into the process. This approach contributes to a more personalized and relevant shopping experience.
  4. Exploration of offsite opportunities: Home Depot is actively exploring opportunities to expand its RM+ platform beyond onsite channels. Initiatives include piloting in-store video screens and venturing into connected TV (CTV). By considering the entire customer journey, Home Depot aims to provide value to suppliers while gaining deeper insights into customer behavior.
  5. Strategic use of data science: With the help of data scientists, Home Depot ensures personalized precision in its advertising efforts. This aligns with the shopper’s preferences and needs and makes the ads more relevant and engaging.
  6. Ongoing adaptation and expansion: Home Depot’s proactive stance is evident in its continuous efforts to adapt and expand its RMN initiatives. The exploration of offsite channels, partnerships with platforms like Roku and Disney Advertising, and the piloting of in-store video screens showcase a commitment to staying at the forefront of evolving digital retail trends.

Home Depot’s success with their RMN stems from its commitment to creating a symbiotic relationship between customers, suppliers, and the retail brand. Home Depot has set a benchmark for RMNs by aligning advertising efforts with the customer’s journey and embracing technological advancements.

Amazon retail media

Amazon Advertising, the retail media division of Amazon, has become another dominant force in the industry. Let’s take a quick look at what they’ve done well and what they could improve.

Scale of Amazon’s retail media

In 2022, eMarketer estimated that Amazon commanded a 76.9% share of retail digital media spend, blowing its competitors out of the water. Walmart, the second-largest player, trailed far behind with a 6.1% share. This underscores Amazon’s unparalleled influence and market presence in the digital advertising landscape and solidifies its position as the go-to platform for advertisers looking to reach a massive audience.

What works for Amazon

Amazon has an unmatched advantage when it comes to personalizing ads and delivering relevant content to consumers. With over 200 million Prime members in the U.S. alone, Amazon has access to vast amounts of valuable data that spans shopping habits, preferences, and more. This data is invaluable for advertisers looking to target their audiences with precision, and it gives Amazon a significant edge in the market. 

What needs to change

Although Amazon continues to thrive, there’s always room for improvement. For instance, to attract brand dollars, traditional retailers are starting to concentrate on channels where Amazon has less historical dominance, such as in-store experiences and email marketing. Understanding this potential, Amazon has been experimenting with email tools to enhance merchant-audience connections and widen its reach. As ad sales’ profitability becomes more significant, incorporating these offerings into Amazon’s retail media strategy could further strengthen its market position.

Walmart retail media

Walmart has been working hard to become a more dominant retail media force. Walmart Connect, the retailer’s retail media network, has done an excellent job bridging the gap between online and in-store activities. It provides a unique closed-loop system that connects online and in-store activity on an unprecedented scale. This mechanism offers advertisers a comprehensive view of Walmart customers’ behavior, giving them valuable insights and measurable business results. With this closed-loop approach, advertisers can access a holistic view of customer activity and achieve successful marketing campaigns.

How Walmart ties together online and in-store activities

Walmart’s massive brick-and-mortar presence and its comprehensive online platform provide a complete view of customer behavior and preferences. This synergy between the digital and physical is a compelling selling point for advertisers that gives them a holistic view of consumer interactions. Walmart’s connected shopping experience integrates both online and in-store activities, allowing advertisers to engage with customers from the research stage to the online or in-store purchase stage of the buying journey. 

New features and technology Walmart’s retail media platform is trying

As part of their innovative initiatives, Walmart Connect introduced the “Holiday Hub,” recognizing Walmart as America’s go-to holiday shopping destination. Advertisers can use this hub to gain key customer insights and implement product best practices to ensure a meaningful omnichannel connection during the holiday season.

In terms of new features and technology, Walmart Connect provides various advertising options to help brands stand out from the crowd:

  • The Search feature ensures visibility when customers actively search for products, with ads appearing prominently in search results and on browse pages. 
  • Display ads, strategically placed on Walmart.com, the Walmart app, and across the web, aim to make a premium impression on customers based on their omnichannel Walmart history. 
  • For in-store influence, Walmart Connect offers opportunities to inspire shoppers through digital TV and point-of-purchase screens across 4,700+ Walmart stores. 
  • Walmart’s closed-loop measurement uniquely enables advertisers to correlate online ads with purchases, providing unparalleled scale and accuracy in measuring campaign impact.

Whether for a small business or a global brand, Walmart Connect offers solutions to help marketers discover new and effective ways to connect with their target audience.

The future of RMNs

The future of retail media networks (RMNs) is bright and holds exciting possibilities. These five key dynamics will likely drive retail media evolution:

Smaller retailers getting into the RMN game

With each passing day, more small brands are becoming active with RMNs. This trend is highly beneficial, bringing diversity, competition, expanded reach, and collaborative potential to the landscape. The future of RMNs is expected to be shaped by a mix of established and emerging brands. This will create an inclusive environment for advertisers and consumers alike.

Potential for cross-platform campaigns

Cross-platform campaigns in RMNs allow advertisers to create a cohesive, impactful, and data-driven advertising approach across different retail media networks. This shift in campaign strategy aligns with the dynamic nature of consumer interactions in the digital landscape, as it provides a comprehensive solution for brands that seek to enhance their presence and influence across diverse channels.

Targeted vs. personalized ads

Personalized ads are becoming a notable trend in RMNs and replacing targeted ads. This means RMNs now provide consumers with more relevant and tailored content based on their interests and preferences. The shift is driven by the increasing demand for personalization and the need to improve the consumer shopping experience. RMN advertisers must take advantage of these personalized ad opportunities to create stronger brand awareness.

Conversions vs. brand awareness

Advertisers often struggle when deciding whether to focus more on conversions or brand awareness. For a well-rounded strategy, RMN advertisers should craft campaigns that balance these two goals. Using the data and insights from RMNs, advertisers can personalize their messaging to drive sales and build and reinforce brand recognition. This approach can help RMN advertisers make brand awareness a central component of their advertising efforts.

Third-party data integration to enhance data and audiences

As RMNs evolve, data expansion is essential for targeted, personalized, and contextually relevant advertising experiences and will help drive the future success of retail media. Advertisers using third-party data, in particular, can unlock new dimensions in audience targeting to create more tailored and impactful campaigns. Third-party data allows for a broader understanding of customer behaviors and preferences and facilitates relevant content delivery. 

Data insights for more connected, tailored advertising

Moving forward, it will also be important for advertisers to achieve a consistent view across online, app, and in-store activities. They need to understand where customers prefer to be reached and where they are most likely to engage so they can ensure a strategic alignment of messaging and optimize the effectiveness of their retail media strategies. The future of RMNs lies in using comprehensive data insights for more connected and personalized advertising. 

What about AI? Where is it useful?

In the retail media context, AI (Artificial Intelligence) enhances advertisers’ capabilities by providing valuable insights and automation to drive more effective and personalized ad campaigns. AI helps analyze vast amounts of data, predict consumer behavior, and empower advertisers with the tools to optimize their strategies. Ultimately, it helps them deliver more tailored, relevant content to consumers that best aligns with their interests and preferences. 

Humans still needed to drive change

While AI is a critical technology in retail media, it doesn’t replace the need for human expertise. People are still essential for driving change, making strategic decisions, and ensuring AI-driven solutions align with business objectives. Moving forward, advertisers will need to utilize both AI-driven capabilities and human expertise to see the greatest success.

A connected customer identity is the key to success 

The future of advertising lies in the seamless integration of customer identity across various touchpoints. Experian’s cutting-edge solutions are leading the way in this transformation. We can help businesses navigate this dynamic environment with helpful tools that unlock a comprehensive view of audiences and facilitate effective campaigns across multiple channels. 

Partner with Experian to achieve retail media success

Experian’s comprehensive data and identity solutions can help RMNs maximize their opportunity, with our new solution tailored to enhance RMNs’ strength in first-party shopper data. Experian’s solution helps RMNs unlock expanded customer insights, enriched audiences for activation, identity resolution for cross-channel audience targeting, and real-time measurement and attribution. This comprehensive solution is designed to help RMNs capture more advertising revenue. Our goal is to ensure you capture the most advertising dollars and make your RMN operate at its peak performance.

Our Consumer Sync solutions can connect customers across multiple touchpoints and channels, specifically bridging the gap between online and in-store to ensure a holistic view and strategy for audiences, campaigns, and performance. With access to over 2,500 frequently updated data points, we have the depth and breadth of data needed to supplement your audience strategy. We’ll help you unlock a broad view of your audiences to see well-rounded profiles, gain the reach required to access your audience across multiple channels, and turn opportunities into revenue. Additionally, our Consumer View solutions can help deepen your understanding of your customers, their behaviors, and campaign success. 

Connect with a member of our team today to get started.


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Why retail media networks need to get offsite ASAP

Retail media networks (RMNs) are on the brink of a major shift. While they are poised to capture over 20% of ad spend in 2025, on-site monetization won\’t be the growth driver it once was. With advertisers consolidating spend among just six or seven RMNs on average, including giants like Amazon and Walmart, it’s hard for smaller RMNs to compete. Off-site retail media ad spend is projected to grow 42.1% in 2025—nearly three times the rate of on-site growth (15.1%), according to eMarketer\’s November 2024 forecast. This dramatic shift underscores that while on-site placements are maturing, off-site is where the momentum (and money) is heading. To remain competitive, RMNs must move beyond traditional, on-site placements and embrace a broader, more integrated approach to media activation. The future of retail media is about utilizing enriched first-party data to drive performance across the open web, connected TV (CTV), and other digital channels. Break free from your owned and operated properties Historically, RMNs have limited ad placements to their own digital properties. While this approach has delivered high-margin returns—on-site ad margins can reach 70-90%, compared to 20-40% for off-site—it’s also inherently limiting. Retailers only have so much owned inventory to sell, and advertisers demand greater scale and flexibility. As brands push for more reach, RMNs must extend their impact beyond owned-and-operated (O&O) properties. Omnichannel retail media ad spending is forecast to hit $61.2 billion in 2025. Brands are looking beyond retail sites to build integrated, multi-channel strategies that drive results across the funnel.eMarketer Off-site doesn’t just mean digital. Walmart’s recent expansion of its Fuel and Convenience stations – planning to open or remodel 45 in 2025, bringing the total to 450 – shows how physical spaces are also becoming extensions of a retailer’s media network. These locations create new touchpoints where advertisers can engage shoppers with timely, context-aware messaging while they fuel up or grab a snack. These quick-stop environments are ideal for limited-time offers or impulse-triggering messages—especially since 68% of U.S. adults say discounts contribute to their latest in-store impulse purchase. Maximize the value of first-party data One of retail media’s biggest promises is the power of first-party data for precision targeting. While on-site ads are inherently lower-funnel, off-site activation allows advertisers to move up the funnel and apply retailer customer data holistically across the open web. For example, DoorDash and Macy’s now offer self-service audience data to advertisers via The Trade Desk, allowing brands to target consumers programmatically. Meanwhile, Walmart is taking a different approach—cloning The Trade Desk’s technology to maintain its walled garden. These moves demonstrate how retailers are rethinking data monetization strategies to scale beyond O&O limitations. Drive new revenue streams with off-site activation Off-site activation enables RMNs to drive incremental reach on channels where audiences are actively engaging, including CTV, programmatic display, and social media. This expansion allows brands to connect with consumers beyond retail websites. Retailers are also utilizing non-endemic advertising opportunities in environments like gas stations and kiosks Unlike traditional grocery or apparel aisles, these spaces are brand-neutral, allowing advertisers who don’t sell products in-store to still activate campaigns using retailer data. In fact, 53% of brands have already partnered with a retailer that doesn’t carry their product, and that number is expected to grow as advertisers seek new ways to tap into retail media’s rich targeting capabilities. Retailers looking to extend the value of their data beyond O&O inventory have two primary off-site opportunities: First, they can use an identity graph to resolve customer identifiers into addressable IDs that can be enriched with additional attributes and activated across channels like the open web and CTV. This allows retailers to find and reach known customers with relevant messaging outside of their owned platforms. For example, a grocery RMN can identify lapsed snack buyers and deliver streaming TV ads that reengage them on CTV platforms. CTV retail media ad spending alone is expected to grow 43.1% this year, reaching $4.86 billion, highlighting the appetite for video-based upper-funnel strategies. Second, RMNs can broaden reach by activating first-party audiences, syndicated segments, or custom-built audiences through onboarding capabilities. These audiences can be sent to a variety of programmatic and CTV destinations, enabling advertisers to engage shoppers in high-impact environments. For example, a home improvement retailer can send its audience segments to programmatic ad exchanges, ensuring DIY shoppers see relevant offers even while browsing unrelated sites. Together, these approaches allow retailers to monetize their data more effectively while giving brands the ability to reach consumers in moments that matter beyond just retail websites and apps.  Scale and measure success with data partnerships For smaller RMNs to compete with larger players, they need more than just inventory—they need the ability to scale campaigns and prove performance. Data partnerships play a critical role in both expansion and measurement. Measurement remains one of the biggest challenges for RMNs moving off-site. On-site retail media offers closed-loop attribution, but off-site activations introduce complexity. Retailers can work with an identity resolution partner like Experian to connect ad exposures to actual retail outcomes, such as store visits or purchases, across digital and physical environments. Whether it\’s through pixels placed on campaign ads or TV impression logs, these connections help RMNs demonstrate real impact. This approach helps unify disparate data—such as a CTV ad exposure and a subsequent online or in-store purchase—into a clear, measurable outcome. These insights not only show what’s working, but help RMNs optimize future campaigns and provide advertisers with transparent, third-party-validated reporting. As retailers like Walmart integrate loyalty programs like Walmart+ into their physical extensions, they gain valuable behavioral insights into how customers shop across formats—from fueling up to filling carts. These data signals help refine identity graphs and improve measurement across increasingly hybrid consumer journeys. Beyond ads: The data monetization opportunity Smaller RMNs may struggle to scale ad-supported revenue, but there’s another path forward: Data-as-a-Service (DaaS). Providing anonymized, privacy-compliant audience insights to brands offers a high-margin, scalable revenue stream. In fact, some retailers are already embracing this model by licensing their data to programmatic platforms. A playbook for smaller RMNs to win off-site The future of retail media belongs to those who harness data to influence consumer behavior across all digital marketing channels. To succeed, RMNs should focus on: Moving beyond owned inventory: Activate first-party data across CTV, social, and programmatic channels to meet advertisers where their audiences are. Expanding reach through partnerships: Collaborate with identity resolution providers to maximize match rates and campaign effectiveness. Building a full-funnel offering: Position off-site retail media as a brand-building play, tapping into ad budgets that traditionally fund upper-funnel campaigns. Monetizing data, not just ads: Explore DaaS models to generate passive revenue. The time to move off-site is now Retailers that wait too long to embrace off-site activation risk falling behind. Those that expand beyond their owned inventory, invest in off-site data strategies, and build strategic partnerships will be the ones that shape the future of retail media. Experian isn’t just part of the RMN conversation. We’re driving it. Let’s talk. Connect with our team Latest posts

Apr 24,2025 by Sam Zahedi, Sr. Enterprise Partnerships Manager

Five real-life demographic segmentation examples

Not all customers are the same, so why waste your budget marketing to them like they are? McKinsey research shows that 71% of consumers want personalized shopping experiences, and 76% get frustrated when they don’t have them. That’s where demographic segmentation comes in. But what is demographic segmentation, exactly? We define it as a process that helps you categorize your audience into meaningful demographic groups so you can reach the right people with impactful custom messages. Businesses across industries are partnering with Experian to power smarter decisions and better results through solutions like demographic segmentation — but what does this look like in action? This article breaks down five real-world demographic segmentation examples, showing how businesses have worked with us to drive measurable success so you can see exactly how it can work for you. What is demographic segmentation?   Demographic segmentation involves dividing your audience into smaller, more specific groups based on shared demographics like income, education, gender, job, family status, and more to gain a more granular understanding of your brand’s target segments. The better you know your audience, the better you speak to their unique needs — and the more effective your campaigns will be, as you’ll be able to target each segment with highly personalized content that resonates. For instance, a company might market a new tech gadget to young adults in one way while promoting the same product to families with young children in a completely different way, ensuring the message speaks to each group’s lifestyle and priorities. Demographic segmentation attributes Some of the most common attributes used in demographic segmentation include: Age Each age group has different wants and needs. A new video game might catch the eye of teenagers, while a retirement plan is more likely to appeal to someone in their 50s or 60s. Gender Gender impacts preference for certain products, from fashion to gadgets, so knowing who you’re talking to helps make your marketing more relevant. Income Someone with a higher income might be more likely to purchase premium products, while someone on a budget will respond better to discounts or value-based offers. Education The level of education a person has can influence what kind of messaging will resonate with them, whether it’s complex or more straightforward. Occupation A marketing message targeting busy professionals might differ from one aimed at students or retirees. Occupation can tell you what’s important to a person in terms of their needs and lifestyle. Family Status A family with young kids likely has different priorities than a single person or a couple without children. You can adapt your messaging to be more relevant to what matters most to them, like convenience or value. Benefits of using demographic segmentation Demographic segmentation offers several valuable benefits for marketers. Here’s why it’s one of the most commonly used and effective ways to target audiences: Improved targeting and personalization: Demographic segmentation powers highly customized campaigns so you can cater to different income levels, family structures, job types, and so forth. B2C brands can provide offers based on factors like age, income, and gender, while B2B brands can target by occupation to reach decision-makers. Better product and service development: Understanding which demographics use your product or service is a great way to inform future improvements. Higher engagement: With highly customized content, you can speak directly to specific demographic groups and increase engagement. Cost efficiency: As you target the most relevant segments, you optimize your spending around the most likely buyers and will see better returns. Increased conversion and retention: Relevant, targeted messaging leads to higher conversion rates, and when people feel understood, they’ll want to keep coming back. Clearer customer insights: Demographic data provides precise, actionable insights for refining your marketing strategy. Simplicity and effectiveness: Demographic insights are immediately actionable and easy to implement, which gives you a great starting point for focused campaigns. When to use other segmentation types While demographic segmentation provides valuable consumer insights, there are times when other approaches may offer a more effective strategy: Your business provides location-dependent services. If you strictly serve a local area, geographic segmentation would be more effective in targeting customers based on location. Your business offers hobby-centric products or services. Psychographic segmentation (based on interests, lifestyle, or values) may be more relevant than demographics alone for products related to specific interests or hobbies. You have access to detailed behavioral data. If you collect data on customer behavior (like browsing history or purchase patterns), behavioral segmentation would allow for more personalized targeting than demographics. You\’re selling high-end luxury products. While income is a useful demographic variable, psychographic factors like values, aspirations, and lifestyle better capture the desires of luxury consumers. Your target audience shares similar behaviors, regardless of demographic factors. Behavioral or psychographic segmentation might offer more insight if your customers engage with your product or service based on shared behaviors rather than demographic traits. Your product or service targets specific needs or pain points. Segmenting by need or issue rather than traditional demographic variables would likely yield better results if you\’re offering a solution to a particular problem (like a health-related product). How our customers are using demographic segmentation to produce tangible results               Demographic segmentation is about knowing your audience and using data to create marketing strategies that drive measurable outcomes. Let’s look at some real-world use cases from brands like yours that have been successful in this effort, working with Experian to translate demographic insights into significant business growth. Use case #1: Identifying customer spending potential to boost growth for a retail chain Objective A large retail chain wanted to understand the spending potential of each customer in their stores. Their goal was to uncover and maximize untapped spending potential. Solution Experian conducted an analysis to identify the top demographic factors that drove spending in the retail store the previous year. Our consultants found the four key drivers were: Age Income Family structure (household composition) Location/region Results By combining these attributes to create segments, we uncovered two valuable annual estimates: Potential spend: A conservative estimate of how much a customer could spend if they reached the top 20% of spenders within their specific demographic segment (based on data from the highest spenders). Unrealized spend: The difference between a customer\’s annual potential spend and their current spend. An estimate of how much more they could be spending each year. These demographic segments provided the marketing strategy the retail chain used to target $1.1 billion in unrealized spend. This revealed how much additional revenue could be captured by targeting the right customers with tailored marketing and offers through demographic segmentation. Use case #2: Helping a financial institution identify regional DE&I opportunities Objective A large financial institution needed help identifying regional diversity, equity, and inclusion (DE&I) opportunities. They wanted to better prioritize their outreach to underserved communities in the Los Angeles area. Solution Experian\’s Custom Analytics team provided the data and insights to pinpoint specific areas needing attention. We used three key indices to analyze the region: Income index: Measured each underserved economic group by comparing the percentage of low-to-moderate income consumers against the entire L.A. area. Ethnicity index: Measured the percentage of consumers by ethnicity, such as African-American, Hispanic, Asian, and others, against the entire L.A. area. Credit index: Identified potential credit disparities by looking at the average FICO score and the percentage of customers with credit accounts against the entire L.A. area. Results Our client received an analytics dashboard to track and report these metrics, providing clear, traceable data to prioritize DE&I outreach. This dashboard helped them measure progress toward more inclusive practices. Use case #3: Segmenting a health supplement ambassador program for enhanced engagement Objective A health supplement company wanted to identify specific segments within their ambassador program to provide better support and increase engagement. Solution Experian’s Custom Analytics team developed tailored customer segments to address specific needs and behaviors. These segments included: Young and independent: Younger, lower-income singles or starter households who are just beginning to establish their own lives. Families with ends to meet: Young and middle-aged families with kids who are budget-conscious, often using coupons and enjoying fast food. High-end families: Middle-aged families with kids and high incomes, financially secure big spenders who also give to charities. Empty nesters: Older households with no kids who focus on cooking at home and may have more disposable income. Results Segmenting at registration allowed for more effective communication and engagement with prospects. Customized messaging, guided by customer demographics and purchasing behaviors, improved acquisition and retention by helping the right messages reach the appropriate individuals through their preferred channels. Use case #4: Comparing customer bases: Insights for a retailer across two cities Objective A national retailer with locations in two major cities (their home base city and a recent expansion city) wanted to understand how different their customer base was in each city. They aimed to uncover key demographic and behavioral differences to refine their marketing strategies and ensure each location received the most relevant messaging and promotions. Solution Experian’s Custom Analytics team analyzed each city’s customers across a wide range of characteristics:. Demographics: The expansion city had a younger population with more families, while the home base city had an older and more established customer base. Purchasing behavior: Customers in the expansion city spent more per transaction than those in the home base city. Preferred marketing approach: Customers in the home base city were likelier to be Brand Loyalists, responding well to familiar, trust-driven messaging. Shoppers in the expansion city were Savvy Researchers who responded better to value-based content and product comparisons. Results Using these insights, the retailer tailored its marketing approach to align with each location’s customer base: Home base city: Focused on maintaining loyalty by emphasizing brand trust and highlighting long-term customer benefits. Expansion city: Positioned marketing to appeal to younger, family-focused consumers to showcase high-value purchases and competitive pricing These adjustments led to improved engagement and higher sales in both cities. Use case #5: Optimizing direct mail to help a nationwide retailer maximize impact on a limited budget Objective Facing a shrinking marketing budget, a nationwide retailer needed to refine their direct mail strategy to reach the right customers while reducing costs. Solution Experian’s Custom Analytics team developed a comprehensive dashboard summarizing two dozen recent direct mail campaigns, which allowed the retailer to: Understand the demographic composition of high-response customers across different regions. Identify key patterns in response rates, helping them pinpoint the most receptive audiences. Discover that the Power Elite Mosaic Group representing affluent, high-spending households comprised only 17% of their mailed audience but accounted for 47% of responses. Results With these insights, the retailer restructured their direct mail strategy to target the highest-performing segments. Changes like these led to a 30% reduction in mailing costs while retaining 92% of sales, proving that strategic segmentation can drive efficiency without sacrificing revenue. Explore demographic segmentation with Experian’s Analytics Consulting team Now that we’ve provided a demographic segmentation definition and given you some real-world demographic segmentation examples, it’s time to get a deeper understanding of your audience. Our experienced consultants utilize Experian Marketing Data to create the demographic segments you need to enhance targeting and uncover hidden opportunities. Key features Expertise and experience: Our consultants bring a wealth of analytic knowledge and industry expertise, so you can utilize the latest techniques and best practices. Customized solutions: We provide tailored, custom solutions like demographic segmentation to address your specific needs and challenges. Data-driven insights: Our expertise in Experian Marketing Data quickly delivers valuable insights to optimize operations and identify new opportunities. Industry perspective: As external experts, our consultants offer the unbiased perspective necessary to see beyond internal biases and make objective decisions. Competitive advantage: Utilizing our analytic consultants gives your business a competitive edge by understanding market trends, customer behavior, and potential risks faster than your competitors. Connect with us today to see how our data and expertise can improve  your targeting, personalization, and campaign performance. Connect with us Latest posts

Apr 17,2025 by Erik Lund, Lead Consultant

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