eCommerce Product Taxonomy Explained: Plus 6 Best Practices for Higher Revenue

Clear product taxonomy can make the difference between loyal customers and ever-growing bounce rates.

Take a second to think about how often you save memes, websites, or social posts on your phone and computer. Bookmarking your favorite posts and sites and putting them into folders of different categories allows you quickly find, access, and share that content later.

In eCommerce, thoughtful product taxonomy is sort of like bookmarks — it helps customers find what they’re looking for quickly and easily while online shopping.

Product taxonomy is a crucial, conversion-impacting piece of your store’s user experience design. But while organizing and categorizing products may sound simple enough, a user-friendly taxonomy structure can be challenging to pull off.

In this article, we’ll explore why a thoughtful approach to categorizing products is essential for a successful online store. And also highlight six eCommerce product taxonomy best practices so you can implement them as you’re developing your own product taxonomy.

What is Product Taxonomy in eCommerce?

In eCommerce, taxonomy is a system of organizing products so they’re easy for customers to find across an online store. Just as logical taxonomy is critical for great shopping experiences in a brick-and-mortar store, clear product taxonomies help customers enjoy shopping on a DTC brand’s website.

Product taxonomy (or product categorization) is made up of both categories and attributes. Categories help organize products within a taxonomy. Attributes help highlight relevant details about a product.

Here’s how product taxonomy is laid out:

  1. Products are put into broader categories on a category tree, with subcategories underneath each branch. Main categories are also called a “Parent Category,” while “Child Categories” are subcategories.
  2. Within categories and subcategories, attributes are applied to describe a product’s features like ‘blue,’ ‘wool,’ or ‘large.

* If product features can be applied to products in more than one category, these qualifiers would be considered an attribute and not a category.

Product taxonomy visualized.

Product Categories Explained

You could think of product categories like rooms in a house. Each room, like the kitchen, bedroom, living room, or garage, all act like big categories for items you would expect to find in them. For example, the living room is where you would expect to find furniture like a sectional, whereas a kitchen is where you would expect to find pots and pans.

On an eCommerce website, categories work in a similar way. Products are best grouped into broader categories on a category tree with subcategories that logically follow.

A clothing store, for instance, might have a “Women’s Clothing” category with subcategories like “Tops,” “Bottoms,” and “Dresses.” This way of organization makes it easier for customers to browse and find the products they’re looking for, and get that much closer to adding-to-cart.

Anatta partner, Stio, has clear product categories like, “Men,” “Women,” and “Kids,” at the top of their eCommerce store homepage.

Product Attributes Explained

Product attributes, on the other hand, are like the specific features of a product that help customers narrow down their search, and find the exact item they desire. To continue with the house analogy, imagine that you’re looking for a new couch for your living room.

You might consider attributes like the size of the couch, the color, the material it’s made from, or the style. Because you probably wouldn’t want a sectional that’s too large for your living room, right? Or a sectional that clashed with the color of your curtains or walls.

Simply put, on an eCommerce website, product attributes help describe products and their features. Attributes don’t organize products like categories do.

On this PLP from Stio, product attributes like “Color” and “Size” can be selected to filter products in the “Men’s Paddling” category.

Why is Product Taxonomy Important?

The way products are organized directly impacts user experience, customer satisfaction, and overall conversions. Because as you can imagine, the easier it is for a customer to find what they’re looking for, the more likely it is they’ll add that item to their carts and convert. When customers can’t find the right product, they’re more likely to get frustrated, and frustration can quickly lead to a site bounce. So quickly, in fact, that 61% of site visitors will leave within just 5 seconds if they can’t find what they want!

In short, thoughtful eCommerce product taxonomy is crucial, because when you’re at the grocery store, how often do you head to the toothpaste aisle looking for orange juice? Logically, that just doesn’t make sense!

A strong taxonomy strategy benefits every eCommerce business that adapts one, because taxonomy:

  • Supports the product discovery process

  • Boosts discoverability on search engines

  • Helps create a great customer experience

  • And more.

Taxonomy Enhances the Product Discovery Process

Product discovery is the process of helping your customers find what they’re searching for, while also exposing them to similar products they may be interested in. Most eCommerce stores you visit today will display related products on website PDPs, or in cart drop-down menus. These are both simple, but effective ways to both help customers discover more of your products and also personalize their experience on your online store.

By exposing customers to a wider range of products, you increase the chances that they will find something they like, ultimately leading to increased sales and customer loyalty.

True Botanicals, one of Anatta’s partners, displays their bestsellers on a user’s cart drop-down menu.

Clear Taxonomy Makes Browsing Enjoyable

As customers navigate through your site, they should feel as little friction between their actions and your online store as possible. A strong product taxonomy strategy will organize your products in a way that makes sense to users. If you think about the house analogy from earlier, it wouldn’t make much sense to include office chairs in a kitchenware category.

With logical taxonomy, users can browse products without confusion or frustration. And a positive overall user experience will help build trust in your brand.

Good Taxonomy Improves SEO

When your products are organized and tagged strategically, those products have a better chance of being indexed by search engines. Once those products are indexed, search engines are more likely to display your products when shoppers search for keywords that match your offerings. And the more your products show up in search results, the more traffic your site is going to get.

Taxonomy Provides Valuable Customer & Brand Insights

Strong product taxonomy will provide valuable insights into your inventory and customer interests. Strategically testing and iterating on your product organization can show you which products are selling and which ones aren’t getting noticed. If you adjust the visibility of unnoticed products and they still aren’t selling, you may have a clear indication that those items can be discontinued. Conversely, you’ll also know which type of products your audience is most interested in.

Above All Else, Thoughtful Taxonomy Leads to More Sales

Add together all of the benefits above, and you’re going to see an increase in sales and conversions. Improved SEO leads to more traffic to your website. Once on your site, clear product taxonomy leads to a positive overall user experience. With an improved product discovery process, users are strategically exposed to products they are likely to purchase. And when customers can easily find what they’re looking for in as few clicks as possible, they are more likely to convert, and return.

6 Best Practices for Product Taxonomy in eCommerce

Effective product taxonomies improve customer experience, enhance your brand’s organic discoverability, and increase the efficiency of your internal teams. Since reorganizing all the products in your eCommerce store will likely feel intimidating, stick to these eCommerce taxonomy best practices for faster, better results right from the start.

1. Leverage Customer Behavior Data to Understand Your Users

A successful product taxonomy strategy starts by understanding your users. You need to know who your customers are and what they’re looking for in order to create a product structure that meets their needs. One of the best ways to determine how users are navigating your site is by testing on-site behavior.

Use tools like heat maps so you can see how users are actually navigating your site in real-time. Heat maps provide insights into crucial KPIs like conversion rates, time spent on each page, and links clicked. They also reveal the potential pain points of each step on your user journey.

Key considerations for customer data:

  • For your most popular items, consider creating a “Best Sellers” or “Most Popular” product category or attribute filter. For first-time visitors, less is often more, so providing them with curated categories can simplify their browsing journey, and make their first visit a great one.

  • On-site search is a powerful tool for your customers. Be sure you’re paying attention to what your customers are entering into your store’s search bar so you can optimize results for their queries.
Mack Weldon, a partner of Anatta’s, has a “Bestsellers” category right on their homepage for a seamless customer journey.

2. A Clear Hierarchy = A User Friendly Hierarchy

Product taxonomy needs clear product categories with intuitive subcategories and attributes. Start by determining large, general buckets for the different products your brand offers.

These overarching categories can be categories like “Men”, “Women”, “Clothing” or “Shoes.” It’s best practice to have as few product categories as possible without sacrificing organization. Too many categories can quickly lead to decision fatigue and overwhelm.

Once you’ve defined your overall product categories, create subcategories and attributes to help users find more specific products. Think about the exact search phrases and specific keywords users will likely be searching for, and how they would find those products within your site. Continue defining subcategories and attributes until all of your products are included within a top-down hierarchical organizational structure.

Key considerations for product categories:

  • If you can, avoid using “Other” as a category. “Other” is a vague term that often doesn’t help a user along their journey. If you find yourself trying to include products in an “Other” category, reconsider where those products are placed.

3. Optimize Taxonomy for Personalized Shopping Experiences

eCommerce personalization is one of the most effective ways to give your users a positive shopping experience and earn their loyalty. Product taxonomy is one powerful way your site can facilitate a personalized experience.

For example, users in different cultures and locations will have different needs, so they’ll interact with your site differently. Users in colder climates may need cold weather gear more often, while customers in warmer climates won’t. So, adjust your product taxonomy according to geo-locations, and lean on your customer segmentation data to learn about user preferences in different locales.

You can also utilize taxonomy to recommend and curate products specifically for each individual user. Through eCommerce personalization, your brand is likely to see improvements in leading KPIs.

4. Avoid Manually Categorizing, Duplication, and Overlap

Product taxonomy involves a large volume of structured data. If you’re trying to manually categorize every product in your store, you’re likely going to make errors. Plus, manually categorizing is time and labor-intensive. Instead, leverage some type of product management system (PIM solution).

For example, Shopify offers a product taxonomy system that utilizes machine learning to organize large-scale products and organizational structures. Using a product taxonomy system will also help avoid creating duplicate categories or overlap within categories and subcategories.

Key consideration for duplicate categories:

  • Including a product in more than one category tree will cause issues with your internal product reporting. However, including a product in more than one relevant category on your store helps increase visibility for that item. And providing more than one opportunity for a customer to find a product can help cut down on their search efforts. I.e., including a men’s sweatshirt in both your “Men’s Apparel” category and your “Winter Wear” category.

One of Anatta’s previous clients, Society Social, includes “Ottomans, Stool & Benches” under both “Living Room” and “Bedroom” categories.

5. Optimize categories for SEO

Product taxonomy plays a big part in your site’s SEO. Product categories act as search retrieval mechanisms, but you have to optimize your taxonomies accordingly, or you could actually be harming your SEO instead.

Optimize taxonomies to include content like images, meta titles, videos, or meta descriptions that relate back to your target keyword. You can also optimize each individual product for its specific brand, make, and model, and then link each product back to its larger category.

Search engines want to provide users with the right information for their search. By using keyword research to figure out what your users are searching for, you can greatly improve your SEO.

6. Update and Fine-Tune Your Taxonomy Structure Often

Product taxonomy needs to be regularly tested and reworked based on how users are interacting with it. Revisit and re-test your taxonomy strategy on a regular basis, whether you add new products or not, to ensure the taxonomy is helping and not hindering sales.

Try approaching your products from a user’s perspective as often as you can. Because the better you understand how your product fits into the market and why customers shop with your brand, the better your product taxonomies, and the better your customer experience!

Closing Thoughts

Product taxonomy impacts every part of the user journey, from SEO and product discovery to user experience and conversions. While a good taxonomy takes a bit of thought and data, the rewards are higher revenue and a more loyal customer base.

Partner with Anatta’s UX Team to Design a Product Taxonomy that Boosts Conversions and Builds a Loyal Following

At Anatta, our UX team can help your team create a strong product taxonomy that will ensure your customers can find and purchase exactly what they’re looking for.

We’ve helped leading DTC brands like:

  • True Botanicals

  • Rothy’s

  • Athletic Greens

All optimize their store’s UX design for higher conversions and repeat customers.

Get in touch with our team today.

Product Taxonomy FAQs

What is an Example of a Product Taxonomy?

A product taxonomy is a hierarchical structure that categorizes products into different levels of detail based on their attributes and characteristics. For instance, in the fashion industry, the hierarchy could start with Clothing, followed by Men’s Clothing, Women’s Clothing, and Children’s Clothing at the sub-category level.

At the product type level, there could be Shirts, Pants, Dresses, Skirts, Jackets, Suits, Swimwear, and Underwear. The taxonomy can also include other levels, such as Material, Style, Color, Size, and Brand. By organizing products in this structured way, retailers can improve customer experience, manage inventory, analyze sales data, and gain insights into customer behavior.

What is the difference between product taxonomy and product hierarchy?

Product taxonomy is a system or method used to organize products. A product hierarchy is the way categories, subcategories, and attributes are structured and presented to a user. While subtle, there is a difference between product taxonomies and product hierarchies.

What is the difference between categories and attributes?

Categories are what related products are listed under in a store, while attributes describe the features and details of a product. You can think of categories as rooms in a house where similar items are found, while attributes are the characteristics of those items. Let’s say you moved a towel from the kitchen to the bathroom. Now you’ve changed the category the towel falls under, (bathroom towel to kitchen towel) but you haven’t changed its color or material (its attributes).

About Anatta

Anatta is a premier eCommerce partner that provides turnkey digital product teams for iconic DTC brands including Rothy’s, Athletic Greens, Molekule, and Four Sigmatic. Anatta’s team of certified NNG and Baymard designers helps brands create engaging user experiences that attract customers and increase revenue.

  • avatar
    Nirav Sheth
  • Nirav is the CEO and founder of Anatta. Nirav received his engineering degree in 2006 from George Washington University. Prior to Anatta, he served as founder of Dharmaboost, a software company working with Cisco Systems, Hewlett Packard, and New Leaf Paper. He is also cofounder of Upscribe, a next-level subscription software for fast growing eCommerce brands.