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8 eCommerce Product Taxonomy Best Practices that Guarantee Conversions

February 24, 2021
Pooja Salunke

The local supermarket in my locality, I go to regularly has the best ambiance and they offer great customer service. I’ve been going there for a year now. They have a fruits and vegetable section first then the dairy section, frozen meat section, 50% off section, and then they’ve separate lanes, one for food, one for toiletries, one for beauty and haircare, one for kitchen essentials, stationery, and so on. I know exactly where I can find things I need and I have a hassle-free buying experience even when I’m in a hurry.

products organized in a brick and mortar store

This ease in finding things you need is governed by “Taxonomy”. I have no idea why it starts with Tax making it seem like it has something to do with taxes.

What is eCommerce Product Taxonomy and Why is it Important?

Taxonomy is the method of organizing products in a way that they’re easy to find.

Product taxonomy is not only limited to these physical supermarkets or stores but also plays an important role in an eCommerce business.

“The human psychology behind looking for products at a brick-and-mortar store or an online store is the same. Product taxonomy helps your internal teams and the customers alike.”

Imagine a customer is looking for a knife set. He is looking for it in the “Kitchen essentials” section but it is placed in the “Homeware section”. There are two things that can happen here – He might try searching again or he might just leave the search. In the second case, you’ve lost a sale.

Going by the statistics only 23% of users tried three or more times after their first search failed, while 47% of users gave up after the first one. Another study of e-commerce sites found that users find desired information 34 percent of the time with a simple search, but 54 percent of the time using a taxonomy.” This is why the eCommerce Product Taxonomy needs to be easy to understand.

The good news is that you can reduce these abandoned searches by following a few best practices for eCommerce product taxonomy which you will be reading about further in this blog.

Best practices for eCommerce Product Taxonomy

1. Understand your products

A good taxonomy begins with a good understanding of the products you have. Sit down and have a list of all the products available and decide the major categories first. A good practice is to keep the category tree short to help both your internal teams and customers to find products easily. While there are no hard and fast rules for how to write a taxonomy, it is usually depending on

  • The kind of products you sell
  • How people search for them and
  • How easily they can be depicted

In the image below of an online jewelry store, “The type of jewelry” is the main category. Gold Jewellery, Diamond jewelry, silver jewelry, Silver idols, and so on. These are further subcategorized into the type of buyers like Men, Women, and Kids.

eCommerce product taxonomy on a jewelry store

Whereas for an online store that sells everything from clothes to accessories, the taxonomy consists of “The type of Customers” (Men, Women, Kids, etc) as the main category which is further subcategorized into the different products (Topwear, footwear, gadgets, and so on) they offer for them.

eCommerce product taxonomy on an online store

2. A Unified Approach to eCommerce Product Taxonomy

Getting the eCommerce product taxonomy right is not one person’s job, especially for B2B. Involve your team members from marketing, sales, project management, inventory team, and so on and get their insights on how the products can be structured.

The marketers have the data for the behavioral patterns of your customers, while the inventory managers have the data about what’s in the store. All of these put together can help you have a better grip on the taxonomy from the start.

3. Understand your Buyers

Understand your customers’ behavior driven by data. There are many tools in the market that will precisely show you how your customers navigate your site, where they enter and exit, the best example being Google analytics. Some other good analytics tools are,

  • Kissmetrics
  • Hotjar
  • Woopra
  • Klaviyo
  • Matomo

Make use of marketing statistics like “The most visited product page”, or “Most viewed products” and keep them in the merchandising section of your eCommerce store. This helps you tweak the taxonomy as per your buyers’ needs.

a lady taking buyer data

Also read: How to Write a Killer eCommerce product description that converts

Use keyword research to power your category names with the most searched keywords. For example, a buyer will search for Men’s shoes or shoes or running shoes. So if you have these words or a combination of such keywords your products will be more likely to appear on search results.

4. Write for your Buyers

Use a language that your buyers understand. In B2B, it is common to use jargon internally between teams, given the complexity of product data. For example, if you use SKUs for identifying products internally, the same doesn’t go well with customer understanding.

Also Read: 8 eCommerce Product Title Hacks for B2B and B2C that Convert 

If a chair has an SKU G-CH-2303, its e-commerce search name should be appealing and easy for the customer to understand what the product is, say “Dining chair/Living chair”. This will also make your product visible on the search results.

The search term for the result below was “Dining chairs”.

eCommerce search result for dining chairs search

5. Test your Approach

Taxonomy is never really completed. It is an ongoing process that needs to be monitored for maximum effectiveness. Large enterprises have a team of taxonomists for this job alone. They work on huge product databases and put them into one simple searchable format. But not all medium and small-sized companies can have such an arrangement.

The best way to quickly get an idea of what kind of taxonomy works for your business is to take a look at what similar businesses are doing. Then try it out. Monitor from there, what works out for you and what doesn’t. There are some products that get sold fast and some remain in the warehouse. Take a look at what you are doing differently with the two types. Change the taxonomy based on your findings.

Use methods like,

  • A/B testing for different categories
  • Heatmaps for your website
  • Analyzing product page performance

6. Refine Product Navigation

Once you start testing your products, make use of the products that sell fast and add a “Bestsellers” section on your website, just like our client Regency Lighting did on theirs. DCKAP PIM helped Regency Lighting with their Product Information management process. With a PIM solution, they were able to speed up their eCommerce product taxonomy and catalog management process for about 15000+ product SKUs.

Cross selling in eCommerce If a product fits into two categories, say, for example, the knife set we spoke about at the start of this blog. If it belongs to both kitchen essentials and cutlery, put it in both places. There are more uses and no harm in this case. This practice will help your products rank better and be more visible in the search results.

In the images below you can see the results for knife sets in two departments, “Cutlery and Knife accessories” and “Kitchen and Dining”.

eCommerce product taxonomy category for knife set

7. Make use of Market Place eCommerce Product Taxonomy Guidelines

Marketplaces like Amazon, eBay, Google Shopping have a set of taxonomy guidelines that you can use for a better hierarchy design. They have the do’s and dont’s, best practices, and examples of all types of product hierarchies that you can use.

They have downloadable product hierarchy files on their help center. Here’s google’s product taxonomy – category listing. This contains a detailed hierarchy of product main categories and subcategories for B2B and B2C products.

Below is the image of a google shopping hierarchy. Google allows you to submit products by mentioning the category ID or by providing the product path as shown below. You can use such resources to design your taxonomy efficiently.

Google category listings

8. Use Taxonomy to Cross-sell and Upsell Products

Cross-selling and upselling mean offering better or relatable products to your buyers on their search or checkout pages. You would see such products on any shopping platform like Amazon or eBay. This encourages buyers to explore their needs and buy more.

Below is an example of using Cross-selling on a B2B website. Our client- Grow generation– the leading hydroponic (garden needs) supplier in the US. They used the cross-sell feature to showcase products purchased by other growers.

Cross selling using eCommerce product taxonomy

This is possible when the products are categorized and managed well with the help of eCommerce taxonomy best practices. The categorization for a large set of products like Growngeneration’s (13000+ SKUs) is made easy with the help of Product Information Management solutions such as DCKAP PIM.

DCKAP PIM is built to centrally store and manage your product information. The inbuilt “Category” module enables you to create parent and child categories for all product SKUs. You can search and edit them easily and also sort them based on priority. Filters are available for you to easily find products from a large set of categories.

Apart from making product taxonomy simple, A PIM solution like DCKAP PIM can integrate with your ERPs or backend systems and eCommerce and other sales channels alike and make eCommerce marketing a seamless process.

Wish to know more about how DCKAP PIM can help your B2B business?

We’re just a click away from you.