Importance of Product Taxonomy & How To Develop One

Imagine walking into a bookstore where books are arranged haphazardly on shelves with no clear categories. Finding the book you're looking for would be overwhelming and nearly impossible. But if the same store had the books neatly categorized into sections like fiction, non-fiction, mystery, and romance, it would be much easier to locate what you want.

Product taxonomy does the same thing for your ecommerce store. It organizes everything your store has so customers can effortlessly find what they're looking for, making the shopping experience more enjoyable.

In this comprehensive guide, we will delve into the importance of product taxonomy and provide tips on how to develop one for your online store's success.

What is product taxonomy?

Product taxonomy is the systematic arrangement of a wide range of products into clear and logical categories and subcategories. This structured organization aims to simplify the browsing experience for customers, enabling them to locate the items they are interested in with ease.

Product taxonomy acts as a silent salesperson, guiding customers through the digital store and influencing their purchasing decisions. It transforms the online shopping journey from a chaotic hunt into a smooth, enjoyable experience. As customers find what they need more efficiently, businesses reap the rewards with increased sales and heightened customer satisfaction.

Browser vs. searcher dynamics in product taxonomy

When it comes to the kind of searchers, website visitors typically fall into two categories:

• Browsers: Users who prefer to explore a website's offerings through intuitive navigation menus and categories, browsing through different sections to discover products or content of interest at their own pace.
• Searchers: Users who use the search bar function on a website to directly find specific products or information they are seeking.

A robust product taxonomy caters to both browsers and searchers, offering a seamless shopping experience. By logically categorizing products, businesses facilitate easy discovery for browsers and precise searches for searchers. This streamlined navigation, based on a well-organized category tree, boosts user satisfaction, encourages exploration, and ultimately drives higher conversion rates.

Why is product taxonomy important?

Product taxonomy brings order to the digital shopping world by creating a roadmap for customers to explore. By neatly categorizing products, it not only makes shopping more enjoyable but also helps businesses showcase their offerings in the best possible light. Here are a few other reasons why product taxonomy is important for your ecommerce store.

1. Streamlined organization and classification

By organizing products logically into categories and subcategories, businesses can create a seamless shopping experience for their customers. It also makes your store look more organized and structured, just like a wardrobe organized by season or color.

2. Improved customer experience

The importance of product taxonomy in shaping customer experience cannot be emphasized enough. A study shows that 88% of customers are unlikely to revisit a website after encountering a poor browsing experience. By enhancing your ecommerce platform with a well-structured product taxonomy, you can significantly improve the shopping experience for your customers. It guides your customers effortlessly to their desired items.

3. Better data analysis

Product taxonomy also plays a crucial role in keeping inventory up-to-date and predicting future sales. A well-maintained product taxonomy will help you better analyze and define customer preferences, popular categories and products and emerging trends. This data also helps in personalizing marketing efforts and making informed decisions.

4. Cross-selling and upselling opportunities

Product taxonomy makes it easy for businesses to recommend products. These could be complementary products from two different subcategories that would go well together, like recommending a product from the socks subcategory to someone who bought a product from the shoes category. Businesses can also take advantage of cross-selling and upselling opportunities by suggesting products from the same category that have a higher selling price and profit margin or are from a more premium brand. This enhances the product discovery process and increases sales and customer satisfaction.

5. Better SEO

A well-designed product taxonomy results in a better-structured website, making it easier for search engine crawlers, such as Google, to identify and index pages. This improves the website's search engine ranking and visibility, ultimately driving higher organic traffic and increasing the likelihood of attracting potential customers.

How to develop an effective product taxonomy?

Now you know how beneficial product taxonomy is for an ecommerce store. If you would also like to develop an effective product taxonomy, you can do so by folllowing the steps below:

1. Understand your product offerings

Before you start to create a product taxonomy, you must know the products you offer inside out. This would include details like who would the products be used by, what would the products be used for, when would they be used, color, size and so on. By analyzing different product attributes and customer behavior, you can create categories that resonate with your target audience.

2. Identify broad categories

Think of broad categories as the big buckets that hold all your products. By grouping similar items together, you can create a logical framework. Whether it's sorting clothing by gender or electronics by brand, broad categories help customers easily navigate the online store.

3. Create subcategories for refinement

Once you've identified your broad categories, it's time to get more specific. Subcategories act like smaller containers within the big buckets, helping customers narrow down their search even further. Whether it's sorting shoes by size or books by genre, subcategories create a clear hierarchy that makes it easy for customers to find exactly what they're looking for.

When creating subcategories, it's crucial to understand your audience thoroughly. Take Nike's approach, for instance. Their online store simplifies navigation with just four main categories: Men, Women, Kids, and Sale. Under these, subcategories cater to specific needs, reflecting Nike's understanding of customer preferences. By thinking like your customers and using language they relate to, you can create clear and engaging category names, enhancing the shopping experience.

4. Define key product attributes

You should identify and map key attributes for each category and subcategory. For example, size could be essential for apparel or footwear products. These attributes, such as colour, size, material, etc., enhance the taxonomy, making it informative and easy to navigate. By assigning relevant attributes to each product, you can ensure that customers can quickly find what they need, enhancing the overall shopping experience.

5. Test and iterate

Once your structure is ready and you’ve decided on the overall hierarchy of products, you must test it. This could include internal testing as well as with real customers. A/B testing would even allow you to try two different versions of the structure and define which is more preferable. You can also collect customer feedback to better understand their preferences.

6. Implement and maintain the taxonomy

Once you've finalized your taxonomy, it's time to put it into action. Consistently update categories and attributes based on customer feedback and changing trends to keep your taxonomy relevant and up-to-date. Whether it's adding new categories or refining existing ones to accommodate new products, implementing and maintaining good taxonomies is key to providing a seamless shopping experience for your customers.

Common challenges while implementing product taxonomy

Implementing product taxonomy comes with its set of challenges. Here are some of the most common ones:

• Consistency: Maintaining consistency in categorization or tagging across a large inventory can be challenging.
• Scalability: As the number of products increases, it may become more difficult to maintain, update, and categorize them effectively.
• Seasonal products: Managing products that change with the seasons adds another layer of complexity.
• Sorting out attributes: Different types of products may have different attributes, making it hard to create categories that work for everything.
• Integration with existing systems: Integrating product taxonomy with existing systems and platforms may pose technical challenges, requiring careful planning and coordination.
• Understanding what customers want: Figuring out how people search for and browse products can be a challenge in itself.

Best practices for implementing product taxonomy

Your product taxonomy sets the stage for a smooth and enjoyable shopping journey. Here are some best practices for implementing an effective product taxonomy:

• Begin with thorough research: Understand your target audience, industry standards, and competitor taxonomy structures before building your own.
• Keep it simple: Design a taxonomy that is easy for customers to navigate and understand, avoiding overly complex categories or subcategories.
• Consider scalability: Design your taxonomy with scalability in mind to accommodate future growth in product offerings.
• Implement hierarchical structure: Organize products into categories and subcategories in a logical hierarchy to facilitate easy browsing.
• Use consistent naming conventions: Ensure category names are clear, descriptive, and consistent throughout the taxonomy to minimize confusion.
• Regularly review and update: Continuously monitor and update your taxonomy to accommodate new products, trends, and user feedback.
• Facilitate cross-selling and upselling: Structure your taxonomy to encourage discovery of related products and complementary items, maximizing sales opportunities.
• Provide multiple navigation paths: Provide users with multiple navigation paths, such as search filters, menus, and breadcrumbs, to cater to varying browsing preferences.

Conclusion

Product taxonomy is the secret sauce that makes online shopping a breeze. By organizing products into categories and subcategories, businesses can create a seamless shopping experience for their customers. This automatically enhances customer satisfaction and increases sales as it becomes easier for your customers to find the products they’re looking for. If you’re not already leveraging it for your online store, you’re missing out on a huge opportunity of making the shopping experience for your customers a whole lot easier.