Product Taxonomy Definition And 7 Steps To Develop It In An Understandable Way
Product taxonomy definition, its functions, and challenges are key elements for both brick-and-mortar and online stores. According to Ventana Research, 60% of organizations are dissatisfied with their current product data quality. This highlights the importance of having a well-defined product taxonomy in place to ensure consistent and accurate product data.
After years of grocery shopping you can’t expect to find steak or parmesan in the toiletries section of a supermarket, right? Online shopping is the same: buyers want to find what they need easily and as quickly as possible.
Here’s where you need a well-developed product taxonomy. Let’s dig into its essence, review product taxonomy best practices, product data taxonomy examples, and find out what challenges you might face.
Product Taxonomy Definition
Product taxonomy definition originates from the Greek language. The word “taxis” means “organization” or “arrangement”. In a digital world, taxonomy of data is no more limited to libraries or science sections. For online retailers, product taxonomy (product categorization) is a hierarchical and logical structure of classifying and organizing your products that aims to facilitate the comfortable navigation of products.
Product taxonomy in eCommerce consists of two main elements: categories and attributes. Common products are grouped into categories, while attributes are applied to products of each category.
E.g. If we browse the Maybelline online shop, we can find “curling mascara” in the “Eyes” category and “Mascara” subcategory. In the product description, we will find “Ingredients” or “How to use/apply” attributes that can be applied to many other cosmetic products on the website.
A well-crafted product hierarchy helps buyers to find what they want in the blink of an eye. As a result, your customers get an excellent buying experience, and your sales increase.
What Is Retail Taxonomy?
Product data and product taxonomy in eCommerce are interrelated. Taxonomy of data is not just a hierarchy of products but the whole product taxonomy framework that guarantees high product data quality and significantly improves product information management processes.
A product taxonomy database is equally useful for both searchers and browsers of your website. Customers who search for a product on your website, go directly to a search bar and type the name of a product they want to find, using the keywords (e.g. Christmas costume, Lenovo laptop, etc). If your product data taxonomy structure does not use the specific keywords typed in by a customer, it can showcase the related product, which will help a potential buyer to find an alternative product, as close to a desired one, as possible.
The browsers benefit the most from a well-established product data taxonomy. These customers are excited to explore categories and subcategories, and the more structured it is, the more likely they will find something they might buy. Hamburger menus, headers, and easy-to-spot navigation bars draw the attention of browsers and increase the chances of turning them into buyers.
Product taxonomy benefits your personnel and your business’s online visibility. Clear hierarchy helps to avoid data duplicates and errors, as instead of manual reviews and cleaning, a well-built taxonomy management software is doing it automatically. It sets your staff free from boring manual work and enhances your SEO performance. Valid and structured product data helps you get deeper insights & analytics and find secret opportunities for your business.
For those brands who want to stay omnipresent, the main challenge is adjusting to the product categorization of various sales channels. Different retail platforms can require delivering the product data accordingly with their own product taxonomy classification and templates. Implementing automated product taxonomy software solves this problem and enables you to showcase your products on various sales channels.
Why Is Product Taxonomy Important?
Product content taxonomy benefits your personnel and your business’s online visibility. Clear product hierarchy helps to avoid data duplicates and errors, as instead of manual reviews and cleaning, a well-built taxonomy management software is doing it automatically. It sets your staff free from boring manual work and enhances your SEO performance. Valid and structured product data helps you get deeper insights & analytics and find secret opportunities for your business.
Product Taxonomy Examples
Let’s check out the following product data taxonomy examples that can help guide you in developing a clear and effective product content taxonomy for your business. By studying these examples, you can learn how to organize and classify your product data in a way that makes sense to both you and your customers.
Google Product Categorization
As of May 2023, Google’s product data taxonomy is still an important aspect of optimizing product listings on Google. While it is not strictly required to place your product under a certain category, doing so can help Google identify and match your product with potential buyers.
Google’s taxonomy of data includes a hierarchical system of categories and subcategories that are used to classify and organize products. Each category and subcategory is assigned a unique numerical code, which is used to identify the category in product data feeds.
When submitting product data to Google, it is recommended to choose the most specific and relevant category for your product. This can help ensure that your product appears in relevant search results and is matched with interested buyers.
In addition, Google may require certain item types to be classified under specific categories, such as Media & Software and Clothing & Accessories. Therefore, it’s important to review Google’s current product content taxonomy guidelines and requirements to ensure your product listings are properly categorized.
Here’s the Google product taxonomy sheet with the full list of categories.
Facebook Product Content Taxonomy
Similar to Google, Facebook also uses a product taxonomy to organize and classify products for advertising and e-commerce purposes. Facebook’s product taxonomy includes a hierarchical structure of categories and subcategories that are used to identify and match products with potential buyers.
The categories and subcategories in Facebook’s taxonomy of data are organized based on product attributes such as brand, color, size, material, and product type. Each category and subcategory is assigned a unique numerical code, which is used to identify the category in product data feeds.
Facebook’s product data taxonomy is constantly evolving and being updated to reflect changes in the marketplace and consumer behavior. Therefore, it’s important to regularly review Facebook’s product content taxonomy guidelines and requirements to ensure your product listings are properly categorized.
In addition, Facebook also offers a product catalog feature that allows businesses to upload and manage their product listings on Facebook and Instagram. The product catalog can be synced with an e-commerce platform, such as Shopify or WooCommerce, to automatically update product information and availability.
Here you can read more about the Facebook sales platform and its product taxonomy. And we are moving move forward to the next data taxonomy examples.
Amazon Product Hierarchy
We can also consider Amazon as one of the data taxonomy examples. Amazon offers more than ten thousand categories. There are 20 open listing categories, and also categories that need approval. The sellers who upgrade to Professional Selling Plan can assign their products to non-open categories. Amazon’s product taxonomy has a hierarchical structure. Basically, Amazon taxonomies are organized by terms (e.g. Apps & Games), and then all those terms are related or connected to each other.
Here you can find a full list of Amazon product categories.
Here in Gepard’s research, we prepared an extended guide on leading retailers’ taxonomy requirements.
Ask Us How To Automatically Adapt Your Product Taxonomy For Various Retailers
Challenges with Product Categorization
Apart from adjusting to product taxonomy rules of various sales platforms, here are some other top challenges with establishing product taxonomy:
- Standard settings for taxonomies. In order to make product data compliant with the demands of different marketplaces, the company is advised to set a standard data structure like GS1 product taxonomy, which is difficult without involving experienced eCommerce experts. You can learn more about this challenge in the Gepard GS1 case study.
- Local differences. If vendors operate in different countries and create special categorizations for a particular country or locale, it confuses a customer. Also delivering and transforming data becomes more challenging because of the local discrepancies.
- Different terminology. One widespread problem occurs when businesses and their customers use different terminology to explain the same product. It depends on the level of expertise of customers and their preferences. However, it poses problems when it comes to creating a structured data hierarchy.
- Ambiguous and complex data. Product data complexity and ambiguity bring about the situation when the same products are shown under different categories. Not only the information becomes less consistent, but also the customers cannot use all the potential of browsing and filtering.
- Duplicate categories. The tool which is used to manage the company’s product taxonomy defines how challenging it can be to manage duplicate categories. For example, finding redundant categories is easier with a PIM system. Sometimes its governance functions allow it to check for potential duplicate categories in the process of creating them.
- An excess of categories. While you may think that offering your potential buyers to choose from a two-page list of categories enriches their shopping experience. On the flip side, it can confuse and discourage them.
- Having doubts between a category and an attribute. Sometimes it is hard to decide if a certain feature is related to a category or attribute. Also, it can be difficult to find the relation between categories and subcategories.
- Choosing the default sort orders for categories. Creating a product taxonomy template requires setting the default sort orders. It’s always a question of whether it should be alphabetical, dynamic, or logical, and how consistent it should be.
Product Taxonomy Case Studies
Taxonomy can be a powerful tool for companies looking to expand their sales channels and reach new customers. Let’s take a closer look at the data taxonomy examples of companies such as Nike, Walmart, HP, and Target, which have implemented effective taxonomy systems to reach new sales channels and improve customer engagement.
Nike uses a taxonomy system to categorize its products according to sport, activity, and other attributes. Product data taxonomy allows the company to sell its products on different marketplaces, such as Amazon or eBay, by tailoring its product listings to the specific marketplace and customer base.
One example of how Nike has used taxonomy to improve its product offerings is its use of the “Air Max” category. Nike created this category to target a specific customer segment – those who are interested in fashion and style, as well as those who are interested in comfort and performance. By creating a dedicated category for Air Max products, Nike was able to optimize its product listings for this market segment and reach new customers who might not have considered Nike’s products before.
Walmart has implemented a robust taxonomy system to categorize its products across multiple channels, including its own website, physical stores, and third-party marketplaces like Amazon. This allows Walmart to optimize product listings for different marketplaces, increasing visibility and sales. By analyzing customer data, Walmart creates highly targeted product recommendations and promotions that are tailored to individual customers’ interests and needs.
HP is a technology company that has used taxonomy to reach different marketplaces and improve its product offerings. One example of how HP has used content taxonomy to reach different marketplaces is its use of the “Workstation” category. HP created this category to target a specific customer segment – professionals who need high-performance computing for demanding tasks like video editing, 3D modeling, and scientific research. By creating a dedicated category for workstations, HP was able to optimize its product listings for this market segment and reach new customers who might not have considered HP’s products before.
HP has also used its taxonomy system to create targeted product recommendations and promotions. For example, if a customer is browsing for printers, HP’s taxonomy system might recommend related products like ink cartridges, paper, or other accessories. By analyzing customer behavior and preferences, HP creates highly targeted recommendations and promotions that are more likely to result in a sale.
You can also download the full HP Case Study to discover how Gepard helped HP to deliver product data to Amazon.
Target is a US-based retailer that has successfully used taxonomy to expand its sales channels and improve its online customer experience. It uses a taxonomy system to categorize its products across different channels and marketplaces. For example, Target uses different category names and attributes on Amazon compared to its own website, depending on what works best for each platform and customer base. This allowed the company to optimize product listings for each marketplace, increasing visibility and sales.
Product Taxonomy Best Practices: 7 Steps to Design an Effective Product Hierarchy
Given all the above challenges, how to create a product taxonomy that benefits your business? Here are some steps to follow.
Define who in your team is responsible for product information structure and its delivery to external points of sales.
Detailed team planning will help you define the company members who have comprehensive knowledge and experience in the sphere of product taxonomy, content creation, and product information management.
Identify product categories that you are interested in.
Analyze the way your clients shop and assign the most proper categories, subcategories, and attributes. The deeper research you will conduct, the better you will understand which product categories and attributes are the most relevant for your audience.
Make a list of marketplaces/retailers where you want to sell, and gather their requirements.
Knowing the product taxonomy rules of the selected marketplaces will help you work on product taxonomy mapping for the selected sales platforms. By discovering the diversity of sales channels and their requirements you will estimate the amount of time, human and financial resources you need to establish product taxonomy.
Prepare the product data on your own or integrate with the content services providers to get the data from them.
Determine the product data “owners” in your company who can be responsible for the product information preparation and can describe the products in a compelling to a customer way. Compare competitors’ descriptions of similar products, and try to bring them to the next level.
Focus on rich content creation.
Rich product data goes above and beyond product specifications. The product pages enriched with bullets, images & videos, and comparison graphs give a complete idea of your products and immensely enhance the customer experience.
Adapt the GS1, ETIM classification, or other international data exchange standards.
GS1 is a system of global data standards, developed to simplify product data adjustment and delivery to various points of sales. ETIM (European Technical Information Model) is a product information exchange standard, widely used in the electronic industry. Adopting this classification will ease the data transfer process and help to avoid data ambiguity.
Check whether your taxonomy of data aligns with the Master Data Recommendations from Gepard’s team.
Do not neglect to fill in the basic product info (MPN and GTIN, product model name, product pictures, and management summary). Your marketing message should include a brief marketing description, texts, condition and warranty notes, and a management summary. Prepare an extensive list of product specifications and make sure you have rich content to keep up with basic product info. Gather information on upsells and related products to help your customers find an alternative to the desired product.
Product Taxonomy FAQs
What is product category taxonomy?
Product category taxonomy is a hierarchical system of organizing and classifying products into categories and subcategories based on their attributes such as product type, brand, color, size, and material. Product category taxonomy is used to improve the visibility and searchability of products on e-commerce platforms and digital advertising channels and to provide a better shopping experience for customers.
How can I ensure that my product taxonomy is consistent and accurate across different channels and platforms?
To ensure that your product taxonomy is consistent and accurate across different channels and platforms, you can use a centralized product information management (PIM) system that allows you to manage and update your product category taxonomy in one place and automatically distribute the changes to all connected channels and platforms. Additionally, you can establish clear guidelines and naming conventions for your product data, and regularly audit and update your taxonomy to reflect changes in your product offerings or market trends.
Can I automate the process of creating and managing my product taxonomy?
Yes, it is possible to automate the process of creating and managing your product category taxonomy by using a product information management (PIM) system that has built-in taxonomy management features. A PIM system can help you to automatically categorize and classify your products based on their attributes, as well as streamline the process of updating and distributing changes to your taxonomy across different channels and platforms.
Consult With Gepard On How To Automatically Adapt Your Product Taxonomy Database For Various Retailers
Having great product information is not nearly enough anymore. To stay competitive in the eCommerce world, you should adopt and deliver this information to a variety of sales platforms. Entrust this task to Gepard – a professional team of over 150 skilled marketers and developers, assisting the major eCommerce players in the EMEA market for more than 15 years.
If you are still unsure whether automated taxonomy management software can help you increase your time-to-market, don’t think twice – contact Gepard for help.
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