What is a product Taxonomy? A product taxonomy is a hierarchical structure used to organize and classify products or services. It helps companies categorize their offerings to make it easier for customers to find exactly what they’re looking for. Product taxonomies are typically organized into parent-child relationships, with each subsequent level becoming more specific.
For example, the top-level of a product taxonomy might be “Clothing” followed by subcategories such as “Shirts,” “Jeans,” and “Tops.” Each of these categories could be further broken down into more specific types of clothing, such as “Polo Shirts,” “Bootcut Jeans,” and “Tunics.”
Product taxonomies are important because they enable companies to quickly identify new product opportunities and better understand customer needs by providing a clear structure for organizing products. They also help customers easily find what they’re looking for, ultimately leading to more sales.
Benefits of E-Commerce Product Taxonomy
In e-commerce, product taxonomy has two primary elements: attributes and categories. Common products are organized into categories, and then attributes are used in each category’s products. With a well-developed product hierarchy, customers don’t waste time looking for whatever they need, ensuring an excellent customer experience and increasing sales.
Building product taxonomy can be challenging, including standard settings for the categories, using different terminology for the same product, local differences, complex and ambiguous data, excess categories, being doubtful between an attribute and a category, and duplicate categories.
However, checking leading retailer guidelines, creating a clear product hierarchy, and keeping your target market in mind can help create an effective product taxonomy for your business.
Here’s the value of product taxonomy in e-commerce.
1. Adjust product recommendations to suit customer preferences
If the product attributes in your catalog’s stock-keeping units reflect your customer’s preferences, then connecting them with anything they type in the search bar becomes easier. It would also help if you made extra relevant suggestions to ensure a complete look when shoppers and on specific product pages, making it easier for them to interact with your filters. You can only achieve this with a well-structured product and product data taxonomies.
Product recommendations should reflect a customer’s genuine preferences. Guessing about your shoppers’ likes may result in low conversion rates, unsold inventory, and high return rates. Consider learning more about your customers depending on how they engage with your site. This information allows you to customize your customer’s shopping experience, boosting loyalty, sales, and return purchases.
2. Better customer experience
If your product data isn’t well organized, your bottom line could be at risk. Poorly organized sites are likely to make fewer sales than well-categorized ones. And if searchers don’t generate the desired results, most customers might give up without a second try. Customers with poor experiences are likely to leave your website and never return. However, with product taxonomy, you can ensure easy access to product details.
When data is indexed and structured in taxonomies, customers can locate whatever they want by working with specific categories, more inclusive sideways or themes related to particular products. This comes in handy for browsers and searchers. Browsers are usually excited to use navigation bars, menus, and headers to explore products. A well-structured product taxonomy enables such customers to find what they need quickly.
Searchers know precisely what they want. They type specific keywords in the homepage search bar to locate their desired products. The taxonomy allows the searcher to return to the right product page. Precise product categorization ensures customers have the best experience with your brand.
3. Boosts your SEO efforts
SEO should be at the core of every e-commerce business because visibility is essential to driving more traffic to your store. Product taxonomy is an excellent way to increase your eCommerce store rankings. It impacts your website structure which is crucial for SEO. Product categorization enables search engines to crawl your site easily and index pages quickly.
You can also increase web traffic by applying keywords in meta content, URLs, and image alternative text for your categories. This can also increase visitors’ time on your site and boost user and search experience.
4. Promotes better decision-making and reporting
Today’s businesses highly depend on data, and in e-commerce, it’s a surefire way to determine what works and doesn’t. With a properly organized product page, you can better understand what’s happening with your sales.
For instance, your steel-toe boots may not sell as well as composite-toe boots. Poor sales may be due to various reasons. However, a product hierarchy can help you spot minor problems affecting your sales. For instance, if your steel-toe boots are at the bottom of the filtering list, they might not be as visible as the composite-toe boots.
With this knowledge, you can create a steel-toe boot campaign or feature it as a product suggestion. A well-structured product taxonomy lets you see your product catalog’s complete picture, helping you make informed decisions. Unique categories and proper labeling can help you deliver precise statistics easily in your product catalog. Reliable data and reporting make it easier to assess your business and make decisions.
5. Increases sales and conversions
Intuitive search and product categorization are crucial to driving an excellent experience and increasing conversion rates. Customers will be more confident navigating through concise and clear product categories instead of diving into a mess of poorly organized product pages. Failure to categorize your products means you aren’t meeting customer expectations, which may reduce your sales.
You can enhance customer and user experiences with product taxonomy, leading to more sales at the POS. Additionally, an excellent organization can help customers and prospects discover adjacent or similar products, boosting average order value.
6. Improves productivity and communication
Product taxonomy brings structure, which boosts efficiency while giving your employees clarity about what’s happening, improving productivity. Your workers interact with your products and website the same way customers and users do. For instance, when customers call the sales department with a question, the sales representative can respond quickly and effectively only if they have structure and common terminology.
The lack of these two impacts customer experience and prevents your staff from doing their best in their work. A well-crafted taxonomy improves productivity by helping employees find product details efficiently. This makes it possible for any department to thrive.
7. It helps expand your reach
Structured product taxonomies can benefit e-commerce businesses because they make it easier to sell across numerous countries. Typically, currencies and terminology vary when selling across multiple countries, leading to confusion among customers and users. However, with product taxonomy, you can provide a standard product hierarchy to ensure consistent information for your users no matter where they are.
8. Prevents data errors and duplicates
An apparent product hierarchy helps prevent data errors and duplicates because a properly-built taxonomy management software cleans and reviews automatically rather than manually cleaning and examining. This eliminates room for human error and data duplicates and frees your staff from manual work. Relevant, structured product information gives you deeper analytics and insights and helps you find secret business opportunities.
Endnote
Proper product taxonomy is crucial for every Ecommerce’s success. It enables shoppers to locate the products they want with little effort while promoting efficient decision-making and business processes. consider creating an e-commerce product taxonomy to reap these benefits.
If you’re looking for an e-commerce platform that can create product taxonomies, Shopify is one that we recommend.
