How to Structure your Product Catalog with Product Taxonomy?

Gouri Choubey 26 August 2023News

Product taxonomy is a vital organizational framework used in the business world, especially in the context of e-commerce. In simple terms, it refers to the systematic classification and categorization of products into logical groups based on their characteristics, attributes, and relationships.

Think of product taxonomy as a well-organized filing system for your entire inventory. Just as a well-arranged filing system makes it easy to locate specific documents, a thoughtfully structured product taxonomy makes it a breeze for customers to find the exact products they’re looking for on your e-commerce platform.

By creating a product taxonomy, businesses can group similar items together, making it more intuitive for customers to navigate through their offerings. For example, if you sell electronics, your product taxonomy might have categories like “Smartphones,” “Laptops,” and “Tablets,” with further subcategories like “Apple,” “Samsung,” and “HP” within each main category.

Not only does a well-designed product taxonomy enhance the user experience, but it also plays a crucial role in optimizing search functionality. When integrated with AI-powered search engines, product taxonomy can significantly improve the accuracy and relevance of search results, boosting customer satisfaction and conversion rates.

In essence, product taxonomy is a powerful tool that streamlines data management, enhances customer interactions, and ultimately drives the success of your e-commerce business by providing a structured and efficient way to organize and present your products to potential buyers.

What’s the importance of product taxonomy

Product taxonomy plays a crucial role in the B2B industry, especially for suppliers. Here are several ways product taxonomy helps in B2B supplier businesses:

Organized Product Catalog: B2B suppliers often deal with a vast range of products and services. A well-structured product taxonomy allows suppliers to organize their offerings logically, making it easier for customers to find and select the products they need.
Enhanced User Experience: Customers can navigate the supplier’s website or catalog more efficiently. The user-friendly experience leads to increased customer satisfaction and encourages repeat business.
Streamlined Search Functionality: Integrating product taxonomy with AI-powered search engines or filtering options enhances search accuracy and relevance. This empowers customers to quickly locate specific products or explore related options, saving them time and effort.
Personalization Opportunities: A robust product taxonomy enables suppliers to gather valuable customer data. Using this data, suppliers can offer personalized product recommendations and targeted marketing, strengthening customer relationships.
Bulk Ordering and Pricing: In B2B transactions, customers often place large-scale orders. A well-designed taxonomy facilitates bulk ordering by grouping related products together and providing quantity options. It also simplifies pricing negotiations.
Efficient Inventory Management: A structured product taxonomy aids suppliers in managing their inventory effectively. By organizing products based on attributes like size, color, and model, suppliers can track stock levels, avoid stockouts, and fulfill orders promptly.
Seamless Integration with ERP Systems: A standardized product taxonomy aligns well with Enterprise Resource Planning (ERP) systems. This seamless integration streamlines order processing, inventory management, and invoicing, reducing manual work and minimizing errors.
Cross-Selling and Upselling Opportunities: An organized taxonomy allows suppliers to identify cross-selling and upselling opportunities. By recommending related or complementary products, suppliers can increase order values and maximize revenue.
Consistent Product Information: Product taxonomy ensures consistency in product information across various channels and sales teams. This consistency fosters trust and credibility in the supplier’s brand.
Adaptability to Diverse Customers: B2B suppliers often serve customers in different industries with unique needs. A flexible product taxonomy allows suppliers to tailor their offerings to specific customer segments, ensuring relevance and customer satisfaction.

How To Begin with Creating a Taxonomy?

As an advanced AI search engine designed. JAQi is reviving e-commerce websites and ERP systems. By harnessing the power of AI search technology, JAQi offers a range of features and benefits that significantly enhance efficiency and user experience.

One of the primary advantages of using JAQi is its ability to reduce or eliminate data entry efforts. With just a simple copy-paste query or typing into the search box, JAQi’s AI takes care of the rest, delivering accurate search results. This efficiency boost can save businesses 50-80% of the time typically spent on data entry.

Moreover, JAQi’s unique capability to translate buyer shorthand and match it to catalogs simplifies the product search process. Buyers no longer need to manually match their descriptions to the catalog, as JAQi handles the translation seamlessly.

Whether dealing with industrial materials of various shapes and sizes, JAQi’s search technology is flexible and accommodating. Similar to using the Google Search Bar, customers can effortlessly find industrial products with ease.

Another impressive feature is JAQi’s fast, multi-item search functionality. Instead of searching line items one by one using cumbersome drop-down menus or filters, users can search for multiple items simultaneously. This capability allows for quick and efficient processing of quotes, making the entire process much more streamlined.

JAQi’s modular architecture enables easy integration with various e-commerce applications like webstores and ERP systems. Through its API plug-in, businesses can seamlessly incorporate JAQi’s AI search engine to provide fast and accurate search results for their customers.

Notably, JAQi boasts patented search technology that surpasses traditional search methods. Finding any product in any catalog, regardless of format, is now faster and easier than ever before.

In essence, JAQi’s AI-powered search engine offers a game-changing solution for businesses seeking to enhance their product search capabilities. By optimizing efficiency, accuracy, and user experience, JAQi empowers businesses to take their e-commerce operations to new heights.

How does product taxonomy help in B2B industry suppliers’ business

Product taxonomy plays a crucial role in the B2B industry, especially for suppliers. Here are several ways product taxonomy helps in B2B supplier businesses:

Organized Product Catalog: B2B suppliers often deal with a vast range of products and services. A well-structured product taxonomy allows suppliers to organize their offerings logically, making it easier for customers to find and select the products they need.
Enhanced User Experience: Customers can navigate the supplier’s website or catalog more efficiently. The user-friendly experience leads to increased customer satisfaction and encourages repeat business.
Streamlined Search Functionality: Integrating taxonomy with AI-powered search engines or filtering options enhances search accuracy and relevance. This empowers customers to quickly locate specific products or explore related options, saving them time and effort.
Personalization Opportunities: A robust product taxonomy enables suppliers to gather valuable customer data. Using this data, suppliers can offer personalized product recommendations and targeted marketing, strengthening customer relationships.
Bulk Ordering and Pricing: In B2B transactions, customers often place large-scale orders. A well-designed taxonomy facilitates bulk ordering by grouping related products together and providing quantity options. It also simplifies pricing negotiations.
Efficient Inventory Management: A structured product taxonomy aids suppliers in managing their inventory effectively. By organizing products based on attributes like size, color, and model, suppliers can track stock levels, avoid stockouts, and fulfill orders promptly.
Seamless Integration with ERP Systems: A standardized product taxonomy aligns well with Enterprise Resource Planning (ERP) systems. This seamless integration streamlines order processing, inventory management, and invoicing, reducing manual work and minimizing errors.
Cross-Selling and Upselling Opportunities: An organized taxonomy allows suppliers to identify cross-selling and upselling opportunities. By recommending related or complementary products, suppliers can increase order values and maximize revenue.
Consistent Product Information: Product taxonomy ensures consistency in product information across various channels and sales teams. This consistency fosters trust and credibility in the supplier’s brand.
Adaptability to Diverse Customers: B2B suppliers often serve customers in different industries with unique needs. A flexible product taxonomy allows suppliers to tailor their offerings to specific customer segments, ensuring relevance and customer satisfaction.

How to create a product taxonomy in your business?

Creating a product taxonomy for your business involves careful planning and consideration. Here’s a step-by-step guide to help you build an effective taxonomy:

Understand Your Products and Customers: Begin by thoroughly understanding your product range and customer base. Analyze the types of products you offer and how your customers search for them. Consider their preferences, language, and behavior to tailor the taxonomy to their needs.
Define Main Categories: Identify the main categories that will form the foundation of your taxonomy. These categories should represent the major product groups you sell. Keep them broad and easily recognizable to customers.
Establish Subcategories: Once you have your main categories, create relevant subcategories for each of them. These subcategories should be more specific and help customers drill down to find the products they seek.
Choose Attribute-based Structure: Structure your taxonomy based on product attributes that are meaningful to your customers. Common attributes include size, color, brand, material, and price range. Ensure that each attribute aligns with the products in their respective categories.
Test and Refine: Implement your initial taxonomy and test it with real users. Gather feedback from customers and your internal teams to identify any pain points or areas for improvement. Be prepared to make adjustments based on user behavior and preferences.
Ensure Consistency: Maintain consistency in category names and attributes throughout your taxonomy. Consistency fosters familiarity and helps customers understand and navigate your product catalog effortlessly.
Use Hierarchical Structure: Organize your taxonomy in a hierarchical manner, with the main categories at the top level and subcategories branching down. This hierarchical structure aids navigation and enhances the user experience.
Implement with Technology: Leverage technology, such as a Product Information Management (PIM) system, to implement and manage your taxonomy efficiently. PIM solutions automate data entry and updates, ensuring consistency and accuracy across your product catalog.
Scale for Growth: Design your taxonomy with scalability in mind. As your business grows and new products are added, the taxonomy should be flexible enough to accommodate changes and expansions.
Train Your Team: Ensure your team members are familiar with the product taxonomy and its benefits. Training your employees on the taxonomy’s structure and use helps maintain consistency and improves internal productivity.

Is there a difference between product hierarchy and taxonomy?

Although they are closely related and often used together to organize product data in e-commerce, there is a difference between product hierarchy and taxonomy.

What’s Product Hierarchy

Product hierarchy refers to the hierarchical structure of products within a catalog, organized in a top-down manner from broad categories to specific subcategories. It represents the way products are grouped and organized based on their characteristics, attributes, and relationships. A product hierarchy creates a logical and navigable framework for customers to browse and find products. For example:

Electronics (Main Category)
Smartphones (Subcategory)
- Android Phones (Sub-subcategory)
- iOS Phones (Sub-subcategory)
Laptops (Subcategory)
- Windows Laptops (Sub-subcategory)
- MacBooks (Sub-subcategory)

What’s Product Taxonomy

Taxonomy, on the other hand, is the system of classification used to categorize and label products within the product hierarchy. It defines the rules and guidelines for naming and organizing product categories and attributes.

Taxonomy enables consistent and standardized product classification, making it easier for both customers and internal teams to understand and manage product data. In essence, taxonomy is the backbone of the product hierarchy. Using the previous example, a taxonomy would define the naming conventions for each category and subcategory, along with the attributes used to describe products within those categories.

In summary, product hierarchy is the structure that arranges products in a hierarchical order, while taxonomy is the set of rules and guidelines used to classify and label those products within the hierarchy. Together, they create a well-organized and intuitive product catalog, enhancing the customer experience and streamlining data management for e-commerce businesses.

The Bottom Line is…

By systematically classifying and categorizing products based on their attributes, businesses can enhance the user experience, optimize search functionality, and streamline data management. For B2B suppliers in the material industry, a well-structured product taxonomy leads to an organized catalog, improved customer interactions, and increased efficiency. Implementing product taxonomy using tools like JAQi empowers businesses of all sizes to take control of their data and drive success in the competitive e-commerce landscape.