While both segmentation and personalization tactics are similar in the sense that they use information gathered about your audience to customize their experience, the two are very different in practice.
Segmentation is the act of identifying groups of users with a similar, high-level commonality. Examples include segmenting by gender, geo-targeted locations, time zones, identified interests, IP address, active vs. non-active members, etc. Other segmentation efforts may cluster audiences by buyer behaviors such as shopping frequency or spend levels. As a marketer, you’re sending a single message to a group of people.
To create a segmented message, a department store may categorize all women in their email database to serve them messaging about their latest fall booties. Yes, they’re showcasing women’s shoes to women, but they have no idea if those women are interested in shoes right now.
Personalization goes one step further to actually tailor content at the most personal level for an even higher relevancy. As a marketer, you’re sending a single message to a single customer.
To create this personalized experience, the department store would need to look at her purchase history and then serve an optimized version of this email that includes the recipient’s name, along with showing only items based on what she has bought before.