A repository of acronyms, jargon, and useful definitions perfect for eCommerce founders & marketers like yourself.

Product Categories

Product Categories

Definition: A product category refers to a specific type of item or service. Any company usually creates product categories to arrange products.

However, product categories can take the form of a flat structure, such as a list of product types.

Example of flat vs tiered hierarchy

Why it's done: Category pages help divide your eCommerce store's inventory into manageable subsections, so consumers can swiftly access specific products

However, like other internet pages, category pages have a secondary purpose: they can draw readers from search engine results pages to the website. 

This simple procedure will guide you through the process of creating product categories and attributes. You should always strive to assist clients in finding what they're looking for with the fewest number of clicks or page scrolls possible.

Why Is eCommerce Product Categorization Important?

Makes your site more user-friendly with navigable taxonomy—which helps drive more conversions from customers 

  • Helps customers finalize purchasing decisions by considering features like color, size, materials, etc
  • Categorization refines the internal search tool and the facets and filters that help users narrow their search
  • When external search engines examine your site, they can make sense of it and appropriately index it
  • When discussing products or ordering stock, categories standardize product information, ensuring everyone on your team is on the same page
  • Analytics and reporting will show you which product categories are performing well and which are not, allowing you to make more informed business decisions

Types Of Product Categories In eCommerce

Traditionally, the following frameworks drive product categorization:

  • Consumer Products and Industrial Products: Products categorized based on intended audience
  • Convenience, Shopping, Specialty, and Unsought Goods: Categorization happens on usage and purchase frequency
  • The ABC Analysis: Products are categorized based on their revenue contribution and impact on inventory

However, products get categorized by hierarchy on eCommerce sites:

1. Flat Hierarchy

All categories reside on the same level—for example: Apparel > Shirts, Sweaters, Jackets.

Note how Muji does it:

Muji's site showing  flat product hierarchy

2. Two-Level Hierarchy

All categories have two levels—for example: Apparel > Men's Clothing > Shirts, Sweaters, T-shirts.

Note how Everlane does it:

Everlane's site showing a two-level hierarchy

3. Multi-Level Hierarchy

Nesting one or more categories inside another category, and so on.

For example: Apparel > Men's Clothing > Outerwear > Jackets > Bomber Jackets, Leather Jackets, Puffer Jackets.

Note how Amazon categorizes products within its navigation menu:

Amazon's site showing multi-level hierarchy

How To Categorize Products On Your E-Commerce Site?

This simple procedure will guide you through the process of creating product categories and attributes. You should always strive to assist clients in finding what they're looking for with the fewest number of clicks or page scrolls possible.

1. Begin by creating your categories

Ask yourself, “what does my website sell”—the answer will be a list of product types. Your job here is to name it in the broadest possible way. 

For example, if your answer is shirts, the category will be “clothing”. Similarly, cups will belong to a category named “Kitchen & Home” or “Utensils”.

2. Understand how people shop

The user experience is crucial. From where a user will start their search when looking for something. Depending on the products you sell, for example:

For furniture, they might begin with the room of the house; for clothing, they might begin with the purpose of the garment, and so on.

3. Make a list of your first-level categories

Review your product line and do the first-level grouping of products. Show these primary categories in a grid or carousel on your home page, or a top or side menu. Think of these broad categories like the aisles in a supermarket.

For example: Start with casual wear, sportswear, formal wear, underwear, and accessories if your clothing categories are based on a garment’s intended usage.

4. Choose your second-tier categories

Subcategorize the products that fall into each of the first-level categories. Subcategories commonly appear as grids on category pages or as drop-down menus from the main category menus. These are similar to the shelves in each aisle of a supermarket.

For example, the sportswear category will have various subcategories like active t-shirts, sports shoes, etc. 

5. Choose your categories for the third level

Subdivide each of your subcategories further if necessary.

For example, you may make third-level categories for sizes in the sports shoes category, etc.

6. Assign each of your items to a category

Ensure each item on your inventory list has at least one category assigned in your back office and as many categories as necessary on your website.

Remember to keep your clients' purchasing experience in mind while deciding which website category it belongs to.

Also Read: Build high-converting category pages (13 ideas + great examples)

Common Mistakes To Avoid While Creating Product Categories

  • "Everything" is not a category—use broad terms only for the top level, then drill down to specifics
  • Don’t make it overly specific—maintain a balance between clarity and conciseness
  • Avoid inconsistent naming—ensure you maintain consistent naming conventions across categories for intuitive navigation and improved user experience
  • Don’t neglect navigation—regularly test and refine your category structure to ensure it remains effective and user-friendly
  • Lastly, and most importantly, remember to market your product categories—here’s how you do it:

What’s Product Category Marketing? 

Product category marketing is how you associate your product categories with your branding and marketing.

Simply put, product category marketing seeks to build a unique identity for your product categories.

The goals of product category marketing are:

  • Highlight specific offerings
  • Target relevant audiences
  • Boost conversions
  • Tune to market demand
  • Help with the brand positioning

For example, let’s consider TeePublic.

TeePublic’s product category is: Custom Apparel.

Here’s how: Every product category on TeePublic is custom-designed by creators from all over the world. 

Furthermore, themes, trends, and style groups form the base of almost every category on the site.

This ensures that TeePublic’s products get grouped for maximum visibility within the site and off the site.

example of product category marketing from TeePublic

People Also Ask

1. What's the difference between a product category and a product line?

A product category is a broader grouping that covers different product lines within it. 

Meanwhile, a product line is a group of related products offered by a company under a common brand or theme. 

For example, if “Sportswear” is a category, then “Nike Running Shoes” and “Adidas Training Gear” are individual product lines within that category.

2. What is the difference between product type and category?

Categories offer a general overview, while product types provide further detail and differentiation.

Product type describes specific product variations within a category—for example: “Men's T-shirts” is a product type within the “Men's Shirts” category.

Product types and categories work together to create a hierarchy. 

3. What is the difference between product category and market category?

Product category refers to your internal organization of products, tailored to your specific business and target audience. 

Market category, on the other hand, takes a broader perspective, looking at industry trends and your product positioning within the larger marketplace

For example, “Shoes” might be your product category, but the market category could be “Athletic Footwear” if your specific offerings focus on sports performance.

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