Have you ever been to a big department store that doesn’t have signs directing you where to go? Without signs pointing you in the right direction or a map with pinpointed locations, you could expect shopper frustration.
Directing shoppers toward their desired products in a physical store is expected. So, what about online stores?
Product categories are the backbone of every online shop.
Categorizing your products and taking the time to carefully craft your online directory can be the difference between achieving your business goals and falling behind.
In this article, you will learn how product categories improve the user experience, optimize your marketing investment, and contribute to your business goals.
What is a product category?
Product categories are like a road map that directs traffic.
Shoppers need guidance when shopping, especially if you have a big product catalog. The easier the signage is to understand, the faster customers get to their goal – the product they need.
For a first-class shopping experience, shoppers expect products to be correctly categorized and bundled. Whether customers are searching for skin care products, winter coats, kitchen utensils, or Christmas candles, intuitive product categories are a necessity for marketing.
How can you categorize products for your marketing?
A product category is created by grouping similar products that share similar features. These shared characteristics, which determine how items in your inventory are grouped together, should be considered in your marketing strategy from the start.
However, it’s important to continuously review and refine these product categories over time. What was relevant for shoppers in 2018, may not have the same success rate today. Timeliness is key to grabbing your user’s attention.
Examples of product category marketing:
- ASOS – online fashion and cosmetic retailer
In addition to the typical “Shop by product,” visitors can also search by occasion, season, trends, body fit, and more. They’ve set up their online shop with unique categories that correspond to the current interests of their target audience. ASOS bundles its products in new contexts to continually show the buyer new possible uses and cater to their preferences.
- Fackelmann – household product designers and manufacturers
In the Fackelmann online shop, shop customers can = find product categories for specific contexts, such as various “baking occasions.” This gives website visitors a quick way to find themed baking utensils perfect for the holidays without having to sort through the typical baking tools.
- Gorillas – Mobile grocery delivery service
Products can also be categorized according to frequency of use. A product like mayonnaise tends to be purchased in fewer intervals. Therefore, Gorillas, has classified this product in the “pantry cupboard” category. It’s grouped next to jars of Nutella and other pantry staples, which would typically be on a completely different row of shelves in a physical store.
Through user-centered categorization of their own product range, e-commerce operators can increase their conversion rates and reduce bounce rates. A user-centered approach means that your product categorization strategy must be questioned again and again to find what works best.
What are examples of different types of product categories?
You can create as many product categories as there are features, locations, functions, etc. because a product category includes products with similar product properties and a similar benefit for your customers.
You can build product categories hierarchically or in other words, in the form of a tree structure. For example, in the “clothing” category you will typically find that there’s a distinction between women’s and men’s clothing. These categories in turn include subcategories such as “pants,” “jackets,” etc.
Before finally categorizing an article, you should be clear about which classification makes sense. A well-known way of classifying products is to divide them into the following 4 major classifications:
Please note that the definitions partially overlap
- Consumer goods: These are products that are purchased regularly. An example of this would be toothpaste. The price and quality of the product hardly differ between the different manufacturers. As a result, customers rarely engage with this type of product. They usually choose a brand and stay loyal to it.
- Shopping Goods: Goods in this category are purchased less frequently than consumer goods and are generally more expensive. For this reason, customers collect a lot more information and compare offers before purchasing. An example of shopping goods would be electronic devices.
- Specialty and Luxury Goods: These goods are primarily sought after and purchased by a loyal customer base. Customers know exactly what they want. Often it’s not just about exceptional features and exclusivity, but also about the status that comes with it. A good example of a luxury item would be a limited edition watch.
- Unsought Goods: These products are only sought after when a specific problem occurs. For example, a light bulb is usually only purchased when an old light bulb has burned out.
Looking for a product categorization tool to lower bounce rates and guide customers? AB Tasty is the complete experience optimization platform that allows you to build better experiences for your customers – fast. From A/B testing to online product category management, your optimization strategy only needs one tool.
How can product categories be analyzed, updated, and used effectively?
An analysis of product categories begins with recording and evaluating product features. The factors that influence the demand for a product positively or negatively are also identified. Not only is your own traffic necessary in the evaluation phase, but competing online shops can also serve as inspiration.
In addition to determining which product categories are assigned, an analysis also includes a more in-depth analysis of each individual product type. The data expands your own understanding of customers. How do they perceive categories and product types? How do they communicate and what is their purchasing behavior?
A comprehensive analysis also helps the shop operator to reflect on current market trends and develop new strategies for category creation.
How to create product categories for marketing successfully?
Now let’s see how you can create effective product categories for your e-commerce marketing strategy using three important steps.
Step 1: Identify the purpose of the product detail pages and product category pages
The most important pages of every online shop are the individual product detail pages and the product category pages. Both types of pages serve a specific purpose.
Product pages are not just the shop windows for the products. Because on these pages, the focus is more on conversion and less on navigation.
Before visitors get to the product page, they are confronted with the product categories. The purpose of these is to offer customers orientation and guide them smoothly through the range. The categories help the user navigate.
Step 2: Design your product categories with customers in mind
When developing product categories, the customer’s perspective should always be taken. What really motivates them to buy? What information must be integrated into the listing for which product?
To optimize conversion rates in marketing using product categories, online shop operators can turn the following:
Product categories: Summarize and describe
Products can be summarized as described according to the criteria and characteristics presented above. You can then use these groupings for your menu and define main and submenu items.
(Pro tip: Personalization also makes it even easier for customers to find the product they want)
To give your menu an extra boost, you also have the option to display the categories in a personalized order. i.e. a customer who is primarily interested in the “sneakers” category will see it at the top, while another customer will see “sneakers” further down and “jackets” first because this category is currently particularly relevant to them.
Product category pages: how to design an attractive product category page?
The product category pages should be clear and attractive.
- Information displayed about the product: The displayed products on this page should show any details that help visitors differentiate the products (e.g. size, type, or other information related to the product niche).
- Photos and Icons: Use clear images on product category pages. This means your customers can use visualization to get a much quicker overview of whether they are in the right area than if they had to read through long texts.
- Number of products on a page: The key to a good product category page is a balanced number of products. Too few products signal to customers that there is limited variety. Conversely, too many products tend to lead to overwhelm. We recommend between 10 and 50 articles per page.
- Personalized product ranking: To help customers find the right product for them, you can personalize the order of your products on your category pages: i.e. display “relevant” products at the top. (“Relevant” products are a result of the click and purchase behavior of all users.) You also have the opportunity to display the first products in a personalized way by using recommendations.
The product category page “Gartenhaus & Co.” from the provider Gartenhaus GmbH shows a structured and limited number of products.
Step 3: Use options to limit choices
Any of the following methods will reduce the number of items displayed. This makes it easier for customers to choose products and increases the conversion rate.
- Additional product categorization: Each product category can be divided into subcategories to make the search even more specific. No matter which principle this is used for: the names of the respective categories must be specific and understandable.
- Functional Categorization: Products are classified based on the function they are associated with. This is the most commonly used categorization.
- Demographic categorization: Here the products are classified according to demographic criteria such as gender and age.
- Categorization by area of application: The key question in this classification is where and how the item is used or installed (e.g. bathroom, kitchen, living room).
- Specific categorization: Within a product category, you can classify the goods again according to specific characteristics (e.g. according to the size of computer monitors).
- Categorization of the solution: This grouping is based on a specific problem that customers want to see solved by a product. A good example would be losing weight or building muscle.
- Filtering: With filters and faceted navigation, shop visitors can narrow down their searches themselves to get to the desired items more precisely.
- Search: With the onsite search function, customers enter the name of the product or a feature into the search bar to find corresponding results.
What are other benefits of product categories in marketing?
With product categories, you can track and evaluate customers’ surfing habits. Furthermore, you can analyze their purchasing behavior which enables e-commerce companies to make individually tailored product recommendations. This is useful because very few customers have any need or interest in the entire product range. Additionally, the data obtained through individual recommendations provides valuable information about the behavior of shop customers and visitors.
To get even more out of your product categories for marketing, you can also use them to provide category-specific recommendations. For example, you have the option of providing an overview of certain categories on the homepage and displaying matching articles from the respective category. Based on your customers’ clicking and purchasing behavior, you can personalize the recommendations and present products that are particularly relevant to them.
Personalized product recommendations on the Görtz homepage from a specific category (“New Bags”).
Why product category marketing is an indispensable part of e-commerce marketing
Product categorization is an essential part of conversion optimization for online shops. If the clicking and purchasing behavior of customers is better understood, the guidance of customers through the range can be optimally designed using product categories. This means you can reduce bounce rates and increase conversion rates. The insights from the analysis of product categories are therefore becoming an indispensable part of marketing in e-commerce.
