Targeting the very important buyers VIB: A cluster analysis approach

The Pareto Principle, known as the 80/20 rule, predicts that most sales generate from a minority of buyers. Further, consumer theory stipulates certain shoppers have a preference to consume experience versus tangible goods. Some people value the consumption of experience due to lifestyle and innate factors. Following a cluster analysis approach, this paper collected survey data from 700 consumers (adults that belonged to a consumer panel) to examine these propositions. The results support the propositions and show that the e-market comprises three segments: VIB of Experience, VIB of Material, and Normals. The discriminatory analysis shows that the affluent shoppers of experience diverge from the other segments on psychological and lifestyle factors. In addition, social class helps pinpoint these shoppers. Whereas VIB of Experience primarily belong to the Upper Uppers and the Upper Middles, VIB of Material belong to the Lower Uppers and the generic Middle Class. The results are of value to practitioners that aim to target affluent shoppers of experience versus affluent shoppers of material goods. The results suggest that the affluent e-shoppers are not homogeneous according to their shopping preference and highlight the relevance of the Pareto Principle to segment and target the e-shoppers.