What is product taxonomy and how to leverage it in ecommerce

Imagine this: You’re walking into a department store, and you want to buy a pair of boots. Naturally, you’re looking for the section with shoes. Once you get to this shoes section, you can easily find the boots you were looking for. However, what happens if the department store isn’t divided into product sections? What if, for example, they put your boots next to the midi dresses?

Would it be easy for you to find them? Probably not. Instead, you’d lose a lot of valuable time looking for the boots in the unorganized department store. You’d probably be annoyed because things are so complicated.

Why product taxonomy matters

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Online store experiences mirror real-life shopping. 

Even though it seems like everything’s much simpler online, when products are mixed up, it’s challenging for users to find what they need. Forrester’s study showed that "poorly architected retail sites" only sell half as much as better organized sites. 

Your site categories and navigation directly impact your bottom line. When shoppers visit your e-commerce store, they expect to see product categories and sections that will make it easy for them to know where to look for a particular item. If they are looking for a dress, they will look for it in “women’s clothing,” and then “dresses.”

It would be odd if you put dresses in “men’s footwear,” for example. That’s where product taxonomy comes in. Organized product taxonomy helps visitors navigate through categories and find the products they want.

Product taxonomy definition and hierarchy examples

The word taxonomy comes from the Greek word taxis, which means arrangement. Taxonomy stands for arranging, categorizing, grouping, and also recognizing the meaning behind the classified items. In other words, product taxonomy is a systematic way to categorize, organize, and classify products in ecommerce stores often referred to as ecommerce taxonomy.. 

A hierarchy in which items are classified by use or context (like women's clothing or party dresses) into narrow subsets is the most common taxonomic model in e-commerce.

Here’s an example: 

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Presenting the product catalog in segments like above makes it more manageable for shoppers to find what they want and promotes logical connections between subsets.
For example, if the desired product is a red dress, the categories would be:

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You can also have other sub-categories, like evening dresses, casual dresses, silk dresses, short dresses, long-sleeve dresses, etc. What is essential is that they are logical and based on your understanding of customer behavior. 

A good retailer should not just put a few categories that sound good together. Your product categories should make sense to the customers, making it easier for them to reach the checkout page.

How artificial intelligence affects product taxonomy

Data science and artificial intelligence (AI) are technologies that are making taxonomy better and smarter. AI enables ecommerce businesses to automate and simplify different processes.

Competitive companies have started to leverage AI in different ways, including implementing AI solutions for fashion resale to optimize product tagging and improve customer experience.:

• Identify user profiles and the products shoppers are interested in to serve recommendations based on buyer behavior

• Automatically generate product descriptions and content. For example, Facebook’s GrokNet has the ability to detect and describe the products in pictures and therefore help sellers sell them on the Facebook marketplace. 
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• Overcome the vocabulary gap, ensuring every shopper can find what they want, regardless of the differences in the words they use when describing the same product. 

The role of automatic tagging in creating a painless taxonomy process

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Online stores and fashion marketplaces with catalogs that have thousands of products need intelligent systems that can replace manual taxonomy creation processes. Automatic tagging is an AI-based alternative for manual product tagging. This is essentially a method that creates catalog asset metadata. It’s a crucial part of creating a structured and searchable catalog based on fashion taxonomy. The automatic tagging system’s foundation is trained AI algorithms that can recognize clothes in pictures just like we humans can do.

The automatic tagging system’s foundation is trained AI algorithms that can recognize clothes in pictures just like we humans can do. We only need a millisecond to determine whether we’re looking at a blouse or leather shoes. For machines, this is a bit more difficult, and that’s why people have so far performed tagging manually. However, now that we have Computer Vision and Deep Learning, things are different. These technologies enabled scientists to create Neural Networks that imitate the actions of the human brain. Trained Neural Networks can identify objects in an image just like humans can do. They take a picture, scan it, and provide semantic information about the items presented. 

Simply explained, an automated product tagging solution will examine thousands of images and will identify characteristics for each image. It will then create a list of attributes that explain what’s on that image or tag it. These algorithms speed up the tagging process and eliminate the need for human intervention, thanks to Deep Learning - the process happens in seconds. 

Suggested read: The Complete Guide for Automatic Product Tagging in E-Commerce‍

How to use product taxonomy to improve your ecommerce store results

When you enter a nicely-looking physical store, you feel good. Everything is organized and visible. You can find what you want quickly. This is a good user experience. The same thing happens with an e-commerce store. 

When the customer lands on the website, they want to see a clean, logically organized interface. When they are looking for a specific product, they navigate from a broader category into a more specific category containing the product page, which is why a well-structured e-commerce product taxonomy is essential.

So, before you create your product taxonomy, put yourself in your target customer's shoes. Test different paths and hierarchies and document the necessary steps that lead to the product page. Your goal? Minimize the number of steps it takes a customer to reach the desired page and make the product taxonomy as simple as possible.

Keep things simple and don’t reinvent the wheel. Try using traditional categorizations to create a familiar experience and avoid confusion. This should keep visitors longer in your e-commerce store.

Improve navigation to improve product discovery

Your website visitors can be browsers or searchers: they either know exactly what they want, or they are only searching and comparing choices. Therefore, they would either investigate the categories of the e-commerce website or use the search bar. This means that product classification and quality search results are essential to customer satisfaction and, consequently, conversions.

As customers don’t always have the same perception of where the product should be, they should have the option to find the product in both the most narrow child category and the broadest parent category. For example, if a man is searching for leather boots, he will go through “Men’s footwear” > “Boots” > “Leather boots”. However, he should also be able to see the entire offering within the parent “Men’s footwear” category.

Next, the overall navigation experience of the website should be intuitive. 

• Use the hamburger menu to link to the entire product categorization
• Feature your most popular product categories on your homepage
• Create a personalized experience by dynamically showing different categories to each user based on their preferences

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In this example, the hamburger menu opens up to discover an organized product categorization.

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Asos’s featured product categories.

Improve your result relevance and rank higher on the SERPs

If someone searches for red boots, you need to show them red boots, not black or white boots as well. Rich product attributes return higher quality search results and provide customers with the exact products they are looking for.

Thanks to product taxonomy, your search engine filters will be more precise, and the search results will display the correct products. Taxonomy can also help you to rank better on Google. With clean and structured data, Google’s crawlers will quickly identify your content and rank you according to the accurate keywords.

Product taxonomy to identify best and worst performers

To make smart, data-driven business decisions that have a positive business impact, you need to know how different products perform. Product categories will enable you to easily identify the products that don’t sell and eliminate them. It will also highlight the bestsellers so you can feature them on your home page for maximum visibility.

Improving ecommerce through product taxonomy best practices

While product taxonomy is crucial for customer navigation, its impact extends beyond just user experience. A well-designed taxonomy improves internal organization and decision-making. Companies that invest in taxonomy gain better insights into product performance, leading to more informed decisions on what to promote or discontinue.

Here are some essential best practices to consider:

1. Simplify and Streamline Categories: Keep the taxonomy structure simple. A broad, shallow hierarchy (e.g., two or three category levels) avoids overwhelming users and helps them find products more easily. Complex, deep hierarchies can frustrate users and increase abandonment rates.
2. Understand User Behavior: Good taxonomies are user-centric. Analyze customer behaviour and feedback to structure your categories around how customers naturally search for products. For example, a customer searching for a "nightstand" may not think to look under "bedroom furniture" without clear guidance.
3. Use Consistent Naming: Avoid industry jargon and ensure category names align with terms customers use. Synonyms and related keywords should be incorporated to improve search accuracy.
4. Optimize for Internal Reporting: Clear product categorization facilitates better reporting and analytics. By understanding which products sell well and which do not, retailers can make more data-driven decisions that impact inventory management and marketing strategies.
5. Regular Maintenance and Governance: Product taxonomies evolve with trends and consumer behaviour. Regular reviews and updates ensure that your taxonomy stays relevant and continues to meet customer needs. Consistency across all departments is also critical to maintaining a unified shopping experience.
6. Taxonomy and Site Search Integration: Product taxonomy should work in tandem with a powerful site search engine. Browsers can navigate intuitively through categories, while searchers with specific queries rely on accurate and optimized search results. Together, these tools boost conversions by presenting relevant products even when inventory is limited or unavailable.

How to kickstart the product taxonomy process?

Although product taxonomies are different for each store, here are some tips on how to prepare for the process:

Get the entire team on board

Your team should be familiar with everything you’re trying to do and all the product taxonomy changes you’re planning to make as part of your product taxonomy development. Make sure the team knows why you’re making changes and why product taxonomy is crucial for any successful online store. With good categorization, things will be easier for both your employees and customers.

Explain to the team that when users are able to easily find their desired products, they have a happier and more memorable user experience. This means that they’ll come back again and become loyal, benefiting all company employees. Your employees should understand that your customers might not have the same perspective of your products as they do.

Show them examples that will make the need for taxonomy clear and be transparent. This can be a complex shift, and your employees might need more time to adapt to it.

Focus on key information first

Creating a taxonomy from scratch can seem like a daunting task. Don’t try to do it all at once. Start simple: with the top products in your catalog. Work with product owners to identify the essential characteristics of a product, what makes it different from other products, and use this information as the basis for your hierarchy exploration.

Know your users

The whole purpose of having clear product taxonomy is bringing your products closer to the users. So before starting the process and making any decisions, first make sure you know your users profoundly. Psychology plays a significant role here. Learning how users behave and what terms they use is crucial to performing product taxonomy well.

You can do this in several different ways:

• Test various category versions and monitor how users navigate through your pages.
• Collect data on what visitors search and study the language they use
• Go beyond numbers and do qualitative researching by conducting informal interviews with people in your target group

Remember, the customer is always right. You can’t give them a version of your site just because you like it and expect for it to work. Your shoppers should be able to find products easily, on their own terms.

Prepare the content

Organize your information in a way that gives you an overview of:

• The amount of content you have on each product
• Your content sources

When you store your information in a single place, it’ll be easier for you to navigate it and spot any gaps. You won’t encounter a situation where you’ll be missing data for a particular product after you’ve decided to deploy the changes, and things won’t be rushed and will run smoothly. 

Don’t overcomplicate things

Remember: simple is better. Product taxonomy has to be user-friendly and straightforward. 

Rule #1: Keep categories flat‍

If you create too many categories, people won’t be able to find the products they want to buy - nobody wants to spend hours navigating through your endless number of categories.

Not only does over-categorization confuse the buyer, but it also increases the risk of an item being classified in more than one category. When coming up with the categories, don’t go too deep. Keep them broad and flat and limit yourself to two or three subcategories. Also, try to fit all products into a particular category, avoiding categorizing them as “Other.” Users rarely search for products here. 

Rule #2: Instead of jargon, use familiar terms
Don’t try to be smart and innovative. Keep product names simple and use words your customers would use. 

To wrap things up

Hierarchy makes things more clean and organized. For example, in written articles, we have titles and subtitles to mark the paragraphs’ hierarchy in the text, providing structure for the reader. In e-commerce, taxonomy is the one that provides the structure for the buyer, dividing the products into logical categories.

Great product taxonomy makes it easier for search engines to locate products and consumers to browse, identify, and add products to the cart, effectively leading to conversions.The taxonomy should enable users to find what they want faster and with less effort.

Technologies like AI and data science make the entire taxonomy process automated and smarter, saving a lot of time and online retailers’ work.

Pixyle.ai’s automatic tagging engine can automate your entire product taxonomy process. Get smart tags that clean up your catalog, improve your search engine ranking, and boost your conversions. Scan your entire product catalog in a few minutes and eliminate manual tagging that can take for weeks.

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