Product categorisation helps customers intuitively find what they want on your e-commerce site. If it’s not clear how your site is organised, you may lose customers who can’t be bothered to search too hard for what they’re looking for. Get it right though, and your conversion rate can soar.

What is e-commerce product categorisation (taxonomy)?

Product categorisation, otherwise known as taxonomy, describes the way that your products are classified and organised on your website. This needs to be done in a way that makes logical and intuitive sense to your customers.

Product categorisation has three elements to it:

1. Your category tree

This is a hierarchical grouping of product categories, moving from a few bigger groups to many smaller ones. Categories and subcategories are usually types of products, expressed as nouns, e.g.:

Home > Clothing > Women’s Clothing > Dresses > Formal Dresses

An example of a category tree:

This example shows the categories and subcategories of a household appliance website. In consultation with your website development company, you may decide which level is best to be your site’s main categories (i.e. level 1 in this example). Depending on your specific business and the navigational needs of your customers, you could decide to move your levels further left or right – keeping the optimal levels mentioned above in mind.

2. Attributes

Each product will have attributes associated with it that describe it further. If you implement facets on your website, these attributes can be used as the filters that narrow down the list of options for the user. Facets are often characteristics or dimensions e.g.:

Colour, Fabric, Brand, Size

3. Values

Each attribute (or facet) will have a list of possible values that are only linked to that attribute. Values are expressed as adjectives i.e. they can’t be used on their own in a sentence – they must describe something e.g. a red shirt.

For attribute Size, values might be: 8, 10, 12, 14, 16, 18, 20

For attribute Colour, values might be: blue, red, green, white, black

Why is e-commerce product categorisation important?

• When your site is user-friendly, customers are more likely to buy, increasing your conversions. Websites that don’t use taxonomy tend to be very difficult for users to navigate. An average of 38% of visitors will leave a site that is poorly organised.
• The characteristics (made up of attributes and values like dimensions, colour, power or material) help customers decide which products are right for them.
• Your categorisation drives the internal search function, as well as the facets and filters that help customers narrow down their search:
  • Customers who are browsing can intuitively make their way through your website to find what they want.
  • Having a clear taxonomy upfront helps you to define alternatives, synonyms, related products, etc, for all products in your structure. This ensures that the search tool delivers accurate and relevant results when a searcher types a query into the search bar. (Read more about the difference between browsers and searchers here).
• External search engines can make sense of your site when scanning through it and therefore index it properly.
• Categories standardise product information, ensuring everyone in your team is on the same page when discussing products or ordering stock.
• If you are a B2B supplying other businesses, your categorisation helps your customers fit the product into their taxonomy.
• Analytics and reporting will clearly show which groups of products are doing well and which aren’t, enabling you to make better business decisions.

How to categorise products on your e-commerce site

This basic process will help you think through how to set up product categories and attributes. Always aim to help customers find what they want with the minimum number of clicks or page scrolls.

Your basic process is:

A. Categories

Start by setting up your categories.

1. Get clear on how your customers shop

User experience is key. Where would they start searching for what they want? Don’t just assume you know – consult your customer segments and refer to your site analytics for clues to answer this question.

For example, depending on the products you sell:

• For furniture, they might start with the area of the house;
• For clothing, with what the garment is used for; or
• For coffee, with the area of origin.

2. Decide on your first level categories

With the above point in mind, review your range to establish the most logical first level grouping of products. You can choose to display these main categories in your top or side menu, or as a grid or carousel on your home page. Using an analogy of a brick-and-mortar store, these broader categories are like the aisles in a supermarket.

For example:

• If your furniture products are best organised by area of the house, your first level categories might be: kitchen, bedroom, bathroom, lounge, patio.
• If your clothing categories are based on what a garment is used for, you could start with: casual wear, sportswear, formal wear, underwear, accessories.
• If customers are primarily interested in your coffee’s area of origin, your level one categories might be: Brazil, Ghana, Ethiopia, Kenya, Guatemala.

3. Decide on your second level categories

Group the products that fall under each of the first level categories into subcategories. Subcategories would usually drop down from the main category menus, or appear as grids on a category page. In a supermarket, these are like the shelves in each aisle.

For example:

• Using the furniture first level categories above, you might break the lounge category down into these second level categories: couches, chairs, side tables, coffee tables.

4. Decide on your third level categories

If necessary, subdivide each of your subcategories further.

For example:

• For couches, you might create third level categories for: 2-seater, 3-seater, 4-seater (and more).

5. Repeat as necessary

Continue creating levels until you feel your products have all been logically grouped.

6. Allocate each of your products to a category

Go through each and every product on your inventory list and make sure it is allocated to one category in your back office and as many categories as needed on your website. When considering which website categories it belongs to, remember to keep your customers’ shopping experience front of mind.

B. Attributes and values

Now set up your attributes and values. Think about what your customers really want to know about your products, which is very often their “specs” or any other information that distinguishes them from a similar item. These could range from colour and size to compatible electronic parts or allergens in food products. Remember that these can be re-used for different categories and products.

7. Identify the most generic attributes

These are the attributes that can be used across several different categories. For example, many products can be described by colour and what they are made from.

So using our furniture example, you might start with these attributes and values:

• Attribute: Colour
  Values: Black, white, grey, light brown, dark brown

• Attribute: Material
  Values: Solid wood, wood veneer, plastic, steel, wicker, fibreglass

• Attribute: Type of wood
  Values: Oak, mahogany, pine, beech, cherry

8. Move on to the more specific attributes

Consider each product and create attributes that help describe that specific product. You will probably find you can re-use at least some of these as you work through your list of products but not others. For example:

• Attribute: Couch dimensions
  Values: 2100x1200x1100mm, 1400x1100x900mm, 1200x900x800mm

• Attribute: Table diameter
  Values: 500mm, 700mm, 900mm

9. Keep fine-tuning

As you see how the various categories, attributes and values perform, you may wish to revise them so they make more sense to your customers.

A Common product categorisation error

When products are incorrectly categorised, it can make it very difficult for users to find what they want. The most common error made in taxonomy is for an attribute to be used as a product category. Below, we look at two examples of this error:

1. Sleeping bags

In this example, sleeping bag shapes and fillings are shown as categories of their own:

This means that:

1. There is no way for customers to see ALL sleeping bags in one list. Even if they don’t initially care about shape or filling, they have to choose one of these categories before they can go any further. This eliminates many possibilities, which might actually work for them, from the list of products they see after one click.
2. Now imagine they want to search based on some other characteristic which is more important to them, for example, temperature rating. They have to search through every category individually and apply the temperature rating facet, make a note of any possibilities, then repeat that with all the other categories. They’re far more likely to abandon their search than go to all that trouble.

All sleeping bags have a shape and a filling, just as they have a colour, length and temperature rating, and customers may wish to search on any combination of those characteristics. There is no benefit to excluding any of them upfront. In fact, the impact is negative as it unnecessarily limits the options the customer sees. So while it makes sense to have Children’s Sleeping Bags and Sleeping Bag Liners as categories, Shape and Filling should be attributes.

2. Binders

In the example below, the customer has to choose a type of binder upfront, either for presentations, daily use or storage, even if they don’t yet know the difference:

Again, they can’t get a full list of binders, and if they are more concerned about some other characteristic, like price or colour, they have to search through each binder category individually to see all their options. For a far better user experience, Binder Type should be an attribute that customers can use to filter their list within the Binder category – if type is even important to them.

What are Google product categories?

Google Product Categories is a list of categories that you can allocate to each of your products. It’s optional but highly recommended, especially if you are planning a Google Shopping campaign, and/or your products fall under one of these types of categories:

• Apparel and accessories
• Media
• Software
• Alcoholic beverages
• Homebrewing & winemaking supplies
• Mobile phones
• Tablets
• Gift cards

Using this system has its pros and cons:

Pros of using Google taxonomy

• It helps Google Shopping better match your ad campaign to your ideal customers, making your ads more relevant, improving your click-through rate and saving you money.
• It makes sure your products are being compared with and competing against other similar products, so customers can easily find what they want, increasing your sales.
• It helps Google decide where it can display your product and where it can’t. For example, advertising alcohol is restricted in some countries.

Cons of using Google taxonomy

• There are over 6000 categories, and manually selecting the right one for all your products can be unmanageable. There are ways to automate the process using feed management software, which is worth considering especially if you have a catalogue of thousands of products.

In the end, you need to decide whether to implement it based on how many products you have, whether you’re advertising with Google and the overall benefits to your business. At the very least, looking at the Google Product Categories may give you an idea where to start with your own product taxonomy.

The bottom line…

Product categorisation is an important part of managing your product list, both for your business and to help your customers find what they want. Consider the needs of your back office and of your customers as you set up the taxonomy that best suits your products. Taking the time to get it right up front saves you time and mistakes later. It also helps your customers more easily buy from you, which means money in the bank.

We’re curious to hear your specific questions about taxonomy. Did this blog help you in categorising your products? Or do you need more specific information to assist you further?