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Product Categories for Successful Marketing in E-Commerce

23. Feb 2022 07:00 | Reducing Bounce Rate

Have you ever been in a shop without signage? Quite a strange idea, isn't it? Product categories are the backbone of any online shop. Our definition: product categories are like a road map that directs traffic. The easier the signage is to understand, the faster customers get to their destination - the product they need. Customers need orientation when shopping. For a first-class shopping experience, they expect products to be correctly categorised and easy to find in bundles: Be it breakfast cereals, kitchen utensils, or winter coats. The same is true in e-commerce. In this article, you will learn how product categories improve the user experience, optimise your marketing investment and contribute to your business goals.

 

In this blog article, we will cover the following topics:

How can you categorise products for your marketing?
What are the product categories?
How can product categories be analysed and used?

How are product categories created for marketing?
Step 1: Identify the purpose of the product detail pages and the product category pages
Step 2: Design your product categories with customers in mind
Step 3: Use ways to narrow down the choices

What else can product categories be used for in marketing?

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

 

How can you categorise products for your marketing?

Similar products with similar characteristics form a product category. The characteristics according to which the articles in your range are grouped together – i.e. which product categories you define for your online shop – should already be taken into account in the marketing strategy, but should be iterated continuously.

Take the H&M online shop, for example:
In addition to the typical “shop by product“, visitors can also search “by occasion” or browse the categories “Higg Index” (sustainability), “Relax in style” (suitable for the winter season) or “Seamless sports fashion” (current trend topic for women). These are categories that correspond to the current interests of the target group. In this way, H&M bundles its products in ever new contexts in order to show the buyer ever new possibilities of use.

In Fackelmann’s online shop, too, shop customers will find product categories for specific contexts, such as various “baking occasions“.

Navigation menu with product categories in the Fackelmann online shop
In addition to classic product categories, we also find contextualising product categories in Fackelmann’s online shop, such as “baking occasions”.
(Source: Screenshot from fackelmann.de)

But products can also be categorised according to frequency of use. For example, a product such as mayonnaise, which tends to be bought at longer intervals, is thus sorted into the “store cupboard” category at the Gorillaz mobile delivery service and is there next to the Nutella jar, which would have been in a completely different row of shelves in the physical market.

By categorising their own product range in a user-centric way, e-commerce operators can increase their conversion rates and reduce bounce rates. However, this also means that a product categorisation strategy must be questioned again and again.

What product categories have you defined and how do you use them for your marketing? Let us know in the comments.

What are the product categories?

You can create as many product categories as there are features, places of use, functions, etc.. A product category includes products with similar product characteristics and a similar benefit for your customers. You can build product categories hierarchically and thus in the form of a tree structure. For example, in the category “clothing” you will often find a distinction between women’s and men’s clothing. These categories in turn include sub-categories such as “trousers”, “jackets” etc.

Before the final categorisation of an item, it should be clear which classification makes sense. A well-known way of classifying products is to divide them into the following 4 major classifications. Note that the definitions partly overlap.

  • Consumer goods: These are products that are bought regularly. An example would be toothpaste. The price and quality of the product hardly differ between the various manufacturers. As a result, customers hardly deal with this type of product. They usually choose one brand and remain loyal to it.
  • Shopping goods: Goods in this category are bought less frequently than consumer goods and are usually more expensive. For this reason, customers gather much more information and compare offers. Shopping goods include, for example, electronic devices or houses.
  • Speciality and luxury goods: These goods are primarily searched and bought by a loyal customer base. The customers know exactly what they want. Often it is not only about exceptional features and exclusivity, but also about the status associated with it. A good example of a luxury good would be a limited edition version of a wristwatch.
  • Unsought Goods: These products are only searched when a specific problem occurs. This includes, for example, the light bulb, which is normally only bought when an old light bulb has failed.

How can product categories be analysed and used?

An analysis of product categories begins with the recording and evaluation of the product characteristics. Furthermore, those factors that positively or negatively influence the demand for a product are worked out. For this purpose, not only one’s own traffic is evaluated, but also competing online shops can serve as inspiration.

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

The data expands one’s understanding of customers. How do they perceive categories and product types? How do they communicate and what is their buying behaviour?

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

How are product categories created for marketing?

We will now show you how to create product categories that you can use effectively for your e-commerce marketing with two simple but all the more important steps.

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

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

Quite clearly: product pages are not only the shop windows for the products. Because here the focus is on conversion, less on navigation. Before visitors reach the product page, they are confronted with the product categories. These have the purpose of offering customers orientation and guiding them smoothly through the product range. In other words, they help the user 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 him to buy? What information absolutely has to be integrated into the listing for which product?

To optimise conversion rates in marketing with the help of product categories, shop operators can turn the following screws:

 

Product categories

Products can be grouped according to the criteria and characteristics described above. Finally, you can use these groupings for your menu and define main and submenu items.

To give your menu an extra boost, you also have the option to display the categories in a personalised order. This means that a customer who is mainly interested in the category “Sneakers” will see it at the top, while another customer will see “Sneakers” further down and “Jackets” at the top, because this category is currently particularly relevant for him.

 

Product category pages

The product category pages should be designed clearly and attractively. Personalisation also makes it 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 to distinguish the 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 gives your customers a much quicker overview of whether they are in the right area than if they have to read through long texts first.
  • 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 tends to promote overwhelm. Therefore, between 10 and 50 items per page are recommended.
  • Personalised product ranking: To help customers find the right product for them, you can personalise the order of your products on your category pages. This means that products that are particularly relevant (based on the click and purchase behaviour of all users) are displayed at the top. In addition, you have the option of displaying the first products in a 1:1 personalised way by using recommendations.
Product category page in the "Gartenhaus" online shop
The product category page “Gartenhaus & Co.” from the supplier Gartenhaus GmbH shows a clearly structured and limited number of products.
(Source: Screenshot from gartenhaus-gmbh.de)

Step 3: Use ways to narrow down the choices

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

  • Additional categorisations: Each product category can be divided into sub-categories to make the search even more specific. No matter for which principle this is used: The names of the respective category must be specific and understandable enough.
  • Functional categorisation: Products are classified based on the function they are associated with. This is the most commonly used categorisation.
  • Demographic categorisation: Here, products are categorised according to demographic criteria such as gender and age.
  • Categorisation by application area: The guiding question of this classification is where and how the item is used or installed (e.g. bathroom, kitchen, living room).
  • Specific categorisation: Within a product category you can classify the goods again according to specific characteristics (e.g. according to sizes of computer monitors).
  • Categorisation 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: With filters and a facet navigation, shop visitors can narrow down their search independently to find the desired articles more precisely.
  • Search: With the onsite search function, customers themselves enter the name of the product or a feature in the search bar to find corresponding results.

What else can product categories be used for in marketing?

Tracking and evaluating customers’ surfing habits and buying behaviour enables e-commerce companies to make individually tailored product recommendations. After all, very few customers have a need or interest in the entire product range. In addition, the data obtained through individual recommendations provides valuable information about the behaviour of shop customers and visitors.

To get even more out of your product categories for marketing, you can also use them to display category-specific recommendations. For example, you have the option of giving an overview of certain categories on the homepage and displaying matching articles from the respective category. Based on the click and purchase behaviour of your customers, you can also personalise the recommendations and thus present products that are particularly relevant to them.

Product recommendations from the bags category in the GÖRTZ RETAIL GMBH online shop
Personalised 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 categorisation is an essential part of conversion optimisation in online shops. Because if the clicking and buying behaviour of customers is better understood, the guidance of customers through the assortment can be optimally designed by means of product categories. In this way, you can reduce bounce rates and increase conversion rates. The insights gained from analysing product categories are therefore becoming an indispensable part of marketing in e-commerce.

More about the intelligent search →

Do you have any questions or suggestions? Feel free to use the comment function!

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Daniela Ilincic

Head of Marketing

Daniela Ilincic is Head of Marketing at epoq. Her background is in digital marketing with a focus on SEO and content marketing. She has built up the digital sales channel at epoq, which she continues to optimise with her team. In addition to her work, she enjoys communicating market-relevant information on digital topics.

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