Product categories for successful marketing in e-commerce

What product categories are there?

You can create as many product categories as there are features, locations, functions, etc. This is because a product category comprises products with similar product characteristics and similar benefits for your customers. You can structure product categories hierarchically in the form of a tree structure. For example, in the "Clothing" category, you will often find a distinction between women's and men's clothing. These categories in turn include subcategories such as "Pants," "Jackets," etc.

Before finally categorizing an item, you should be clear about which classification makes sense. A well-known method of product classification is to divide items into the following four broad categories. Please note that some of the definitions 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 various manufacturers. As a result, customers hardly consider this type of product. They usually choose one brand and remain 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 seek out much more information and compare offers. Shopping goods include, for example, electronic devices or houses.
• Specialty goods and luxury goods: These goods are primarily sought after and purchased by a loyal customer base. Customers know exactly what they want. Often, it is not only about exceptional features and exclusivity, but also about the status associated with them. A good example of a luxury good would be a limited edition wristwatch.
• Unsought Goods: These products are only sought after when a specific problem arises. This includes, for example, light bulbs, which are normally only purchased when an old light bulb has burned out.

How can product categories be analyzed and utilized?

An analysis of product categories begins with the recording and evaluation of product features. Factors that positively or negatively influence demand for a product are also identified. To this end, not only is your own traffic evaluated, but competing online shops can also serve as a source of inspiration.

In addition to defining the product categories to be assigned, an analysis also includes an in-depth analysis of each individual product type.

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The data expands your understanding of your customers. How do they perceive categories and product types? How do they communicate, and what are their purchasing habits?

A comprehensive analysis also helps shop operators to reflect current market trends and develop new strategies for category formation.

Step 1: Identify the purpose of the product detail pages and product category pages

The most important pages of any online shop are the individual product detail pages and the product category pages. Both page types serve a specific purpose.

Clearly, product pages are not just shop windows for products. Here, the focus is on conversion rather than navigation. Before visitors reach the product page, they are confronted with product categories. These serve to guide customers and lead them smoothly through the product range. In other words, they help users to navigate.

Step 2: Design your product categories with customers in mind

When developing product categories, the customer's perspective should always be taken into account. What really motivates them to buy? What information must be included in the listing for each product?

To optimize conversion rates in marketing using product categories, shop operators can make the following adjustments:

Product categories

Products can be grouped according to the criteria and characteristics described above. You can then use these groups for your menu and define main and submenu items.

To give your menu an extra boost, you also have the option of displaying the categories in a personalized order. This means that a customer who is primarily interested in the "Sneakers" category will see this at the top of the list, while another customer will see "Sneakers" further down and "Jackets" at the top, as this category is currently particularly relevant to them.

Product category pages

The product category pages should be clearly laid out and attractively designed. Personalization also makes it even easier for customers to find their desired product.

• Information displayed about a product: The products displayed on this page should show all details that help visitors distinguish between products (e.g., size, type, or other information related to the product niche).
• Photos and icons: Use clear images on the product category pages. This allows your customers to quickly see whether they are in the right section, rather than having 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 limited variety to customers. Conversely, too many products tend to overwhelm customers. We therefore recommend between 10 and 50 items 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. This means that products that are particularly relevant (based on the click and purchase behavior of all users) are displayed at the top. In addition, you have the option of displaying the first products in a 1:1 personalized way by using recommendations.

The product category page "Garden Sheds & Co." from Gartenhaus GmbH displays a clearly structured and limited number of products. (Source: Screenshot from gartenhaus-gmbh.de)

Step 3: Use options to narrow down your selection

Each of the following methods reduces the number of items displayed. This makes it easier for customers to choose products and increases the conversion rate.

• Additional categorizations: Each product category can be divided into subcategories to make the search even more specific. Regardless of which principle is used, the names of the respective categories must be specific and understandable enough.
• Functional categorization: Products are classified based on the function they perform. This is the most commonly used categorization method.
• Demographic categorization: Here, products are classified according to demographic criteria such as gender and age.
• Categorization by area of application: The key question for this classification is where and how the item will be used or installed (e.g., bathroom, kitchen, living room).
• Specific categorization: Within a product category, you can classify goods again according to specific characteristics (e.g., by computer monitor size).
• Categorization of the solution: This grouping is based on a specific problem that customers want a product to solve. A good example would be weight loss or muscle building.
• Filtering: Shop visitors can use filters and faceted navigation to narrow down their search themselves, enabling them to find the items they want more precisely.
• Search: With the onsite search function, customers enter the name of the product or a feature into the search bar themselves to find corresponding results.

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What else can product categories be used for in marketing?

Tracking and analyzing customers' surfing habits and purchasing behavior enables e-commerce companies to make personalized product recommendations. After all, very few customers have a need for or interest in the entire product range. In addition, the data obtained through personalized recommendations provides valuable information about the behavior of shop customers and visitors.

To get even more out of your product categories for marketing purposes, you can also use them to display category-specific recommendations. For example, you can provide an overview of specific categories on the home page and display matching items from the respective category. Based on your customers' click and purchase behavior, you can also personalize the recommendations and thus present products that are particularly relevant to them.

Personalized product recommendations on the Görtz homepage from a specific category ("New Bags").
(Source: Screenshot from goertz.de)

Conclusion: Well-thought-out product categories are an indispensable part of e-commerce marketing.

Product categorization is an essential part of conversion optimization for online shops. This is because a better understanding of customers' clicking and purchasing behavior allows you to optimally guide customers through your product range using product categories. This enables you to reduce bounce rates and increase conversion rates. The insights gained from analyzing product categories are therefore becoming an indispensable part of e-commerce marketing.

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