Email segmentation is the dividing of your all email contacts into smaller organized segments based on a set of criteria. Segmentation enables you to send more relevant, personalized messages to contacts based on their demographics, interests, actions, preferences, or behaviors. Basically, it allows you to send your contacts emails that they will actually care about.
So, for example, you can segment your contacts by people who subscribed in the last 30 days, women between 25-45 years of age, all people in New York, people who clicked on an email last month, and much more.
The more relevant your emails are to your contacts the more they will engage with them. So by creating segments you can tailor your messages to targeted groups, giving them information they're interested in at the right time. This will help increase opens and clicks and decrease the chance your emails get marked as spam.