Whether we're shopping for everyday essentials or unique and specialized products, consumers increasingly turn to online retailers to meet their needs. However, with the vast array of products available online, finding the right item can be a daunting task.

Correct categorization is of great importance for product accessibility, and product listings display, and significantly influences how sales tax is calculated. Advertising campaigns and operational procedures also benefit from accurate product categorization.

This is where product categorization plays a crucial role. 

Standardizing product categorization can significantly enhance the customer experience, making it easier for shoppers to find what they're looking for and facilitating seamless transactions. The following editorial discloses the impact of proper product categorization on e-commerce in terms of customer experience, taking into account the important role of PIM and PIM works in this process. 

Definition of Product Categorization 

Product categorization, sometimes referred to as product classification, is an area of natural language processing (NLP) research. It is also one of the most significant challenges for e-commerce companies. Compare two approaches to categorizing the item "men's basketball sneakers"

• Clothing, Shoes, and Accessories - Men's Shoes - Men's Athletic Shoes
• Sports - Outdoors - Team Sports - Basketball - Footwear - Men's Basketball Footwear

Using multiple pathways to the same product affects how customers will search for that product. It often called product experience. Besides selecting the correct department, product categorization is also associated with the intricate organization of these departments. The advancement of artificial intelligence technology has allowed the use of machine learning to address this issue, but the problem of product categorization persists. 

E-commerce Product Categorization 

Product categorization is very important for e-commerce. A clear product taxonomy can help user interaction and increase sales. Many websites have wrong product categories. Sellers often need to input details about their products and choose categories by hand. Sometimes, different sellers pick different categories for the same product. E-commerce websites often use automatic product classification methods to solve this problem.  Leveraging data transformation tools can greatly simplify the organization and categorization of product data, enabling more efficient management and seamless integration with various e-commerce platforms.

Product categorization is a key part of e-commerce. It means sorting items carefully to improve user experience and sales. This field is hard in natural language processing. It often needs AI and machine learning to work better. If categories are not consistent, it can make it hard for customers to search and organize products. This shows the need for automated classification on e-commerce platforms.

Importance of Product Categorization

 There are many reasons why product categorization is important for e-commerce and marketing. Accurate product classification can help increase the conversion rate. It can also strengthen the search system and improve the website's ranking on Google. For this reason, some amount of marketing data is needed. Among other reasons for product categorization importance, a few should stand out.

Enhancing user experience is one reason. During their first visit to a website, only about 1% of users buy something. The main reason for this is that people want to check product options to find the best price. Users prefer a website that has the best price and the easiest shopping experience. User-friendly site navigation is very important for the user experience. It leads to higher conversion rates.

Improving search relevance is another reason. A good product catalog helps customers find products they like through the site's search system. The search system is often the first thing users see on e-commerce websites. A good search system is very important for user experience. Accurate product categorization helps to make a faster and better search system.

Search engines help people find sites. Most people do not access a site by typing its address. A reliable product taxonomy allows relevant landing pages to be create for products. This eases indexing by Google and other search engines. This increases the chance that products rank higher in search engines. This makes it more easy for customers to find the site.

What Categorization Allows You to Do?

• Good management of product content is important. Classification gives a way to store and manage product data. This helps keep information organized and available for different business tasks.
• Matching product data is helpful. Classification helps businesses match and compare product data from different places. These places can be suppliers or manufacturers. This is very important for making smart business choices. It also helps keep the data consistent.
• Browsing product lists and catalogs becomes easier. Organized product listings help customers look at a retailer's product range. This makes the shopping experience better.
• Web navigation becomes easier. Clear and standard categories help with website navigation. Customers can find the products they want quickly without frustration.
• User experience gets better. Standardized product categorization helps reduce confusion. It also makes online shopping better.

Key takeaway is that product categorization is very important in e-commerce and marketing. It makes the user experience better. It also helps with search relevance and can help websites rank higher on Google. 

Good categorization helps customers look at products easily. It makes navigation friendly and can increase sales. It also helps customers find the website on search engines. 

Product Categorization Standards

An important aspect of managing core data and quality product information is their classification. Businesses can use their own internal classification (product grouping and hierarchy management) or one of the external classification standards. It's worth noting that these standards effectively compete with each other in how they present themselves.

UNSPSC. The United Nations Standard Products and Services CodeВ® (UNSPSCВ®) managed by GS1 USв„ў for the UN Development Programme (UNDP), is an open, global, multi-sector standard for the classification of products and services. It's often used in public tenders and at some marketplaces.

GPC. Created a separate standard classification named GPC (Global Product Classification) within its synchronization network called the Global Data Synchronization Network (GDSN).

Commodity Codes. Worldwide harmonized representation of the key classifier in international trade. They determine customs duties, import and export rules and restrictions as well as documentation requirements. National statistical bureaus may require these codes from businesses doing foreign trade.

eClass. Cross-industry product data standard for classification and description of products and services, emphasizing ISO/IEC compliant industry standards. The classification guides the eCl@ss standard for product attributes (in eClass called properties) that are needed for a product with a given classification.

ETIM. Worldwide classification tool for technical products. Guides the ETIM standard for product attributes (in ETIM called features) that are needed for a product with a given classification.

To achieve effective product categorization, it's essential to establish and adhere to classification standards. These standards provide a set of guidelines and rules for organizing products consistently, ensuring that the categorization system is coherent and user-friendly. 

Standards can include the following

• Naming conventions are important. You need a clear naming system for product categories and subcategories. This system makes product listings easy to understand. It also helps to keep them well organized.
• Attribute definitions are also important. You must define the attributes and characteristics used for classification. These attributes can be size, color, brand, and type. This helps to make product data standard.
• A hierarchical structure is important for categories. It lets subcategories fit within larger categories. This creates a clear flow in product organization.
• Data quality guidelines are very important. These guidelines help to achieve data accuracy, completeness, and consistency. They make product information reliable. They also make the information trustworthy.

Effective product categorization depend on following classification standard. These standards are UNSPSC, GPC, Commodity Codes, eClass, and ETIM. They give guidelines for organizing products consistently. They include naming conventions, attribute definitions, hierarchical structures, and data quality guidelines. 

When businesses implement these standards, they create a clear and easy to use categorization system. This system help them manage core data and product informations well.

Impact of Categorization on E-commerce 

Many online stores have problems with wrong product categories. This problem happen because people enter product information by hand. Different sellers use different categories for the same products sometimes. Automated product classification often solve this issue.

Amazon has about 350 million products. They use tools for automatic product categorization. After a seller enter the product name and a short description, the system select the correct category. A 1% increase in accuracy can help classify millions of products better when a catalog has many items. 

This help sellers to make more profits. Many e-commerce companies spend a lot of money to improve their automated product classification systems. Using PIM software solutions is also very useful for this. 

There are some key benefits of proper categorization.

• First, there is a common language for buyers and sellers. Standardized product categorization create a universal language. This language help international trade and collaboration. It is easier for buyers and sellers from different areas to understand each other products.
• Second, it helps with managing product content. Businesses have very large amounts of product data. Standardization make data management easier. It give a structured framework and reduce mistakes in data entry. It also improves data integrity and increases the enterprise resource.
• Third, there is simpler reporting based on categories. When products get categorized, it is easier to report and analyze them. This help businesses to understand their product performance, customer preferences, and sales trends better.
• Fourth, optimizing product information help sales. Standardized categorization allow businesses to improve product descriptions, images, and prices. This make it more likely for customers to make good purchasing decisions.

Finally, it is important to set internal standards. 

Consistent product categorization help organizations to create their own standards and guidelines. This ensure that all departments and teams use the same best practices. Sales teams have an important role in this process. SEO teams also have an important role in this process. It is hard to say how much they help. Proper product categorization is important for success in e-commerce. Companies fix incorrect categorization with automated classification. Amazon is a good example of this. Accurate categorization helps profits. 

Accurate categorization also create a common language for trade around the world. It make data management easy. It helps with reporting too. It improve product information. It helps companies create internal standards. Investing in automated product classification is smart for e-commerce companies. E-commerce companies want to grow and work better. Many companies use Product Information Management (PIM) software solution for success. 

Impact on User Experience

The main goal of organizing product categories is to help users. When customers can find and search for products on a website, they will stay engaged and finish their purchases. Here are some ways that organized categories help users.

• Faster Product Discovery. Imagine a shopper who wants to find running shoes. With a good categorization system, they can quickly go to the "Athletic Footwear" section instead of scrolling without purpose. This saves time and makes customers happy because they can find the products they want easily.
• Reduced Frustration. Clear categories reduce the trouble of not finding an item. When product categories are clear and easy to understand, customers do not leave the shopping process in anger. Instead, they have a smooth and easy shopping time.
• Improved Product Suggestions. Organized categories help customers during their searches and all the time they shop. Businesses can use organized data to create better recommendations. By looking at what customers browse or buy in certain categories, websites can show related products. This can lead to more sales. This personal touch makes customers happier and increases sales.
• Enhanced Trust and Credibility. Consistent categories help the shopping process and build trust with customers. When products are well-organized, customers see the retailer as organized and trustworthy. This good feeling helps make customers come back to shop again. Trust is important for keeping customers and getting them to shop again.

Wrapping up 

In summary, standardized product categorization help to make shopping easier. It also improve the user experience. This is a good investment for e-commerce businesses. These businesses want to make customers happy, increase sales, and create loyal customers.

In the fast-paced world of e-commerce, it is very important to provide a smooth and fun shopping experience.

Standardizing product categorization is a fundamental step toward achieving this goal. By defining clear classification standards, businesses can efficiently manage product data, enhance their reporting capabilities, and, most importantly, improve the user experience.

PIM solutions can take on a significant part of resource management, master data management, asset management resource planning, etc. For more details, visit PIMinto (https://piminto.com/).
The user experience of products also depends on the quality of the digital assets that accompany the product catalog. Digital asset management can be delegated by the CEO to a team that will use suitable high-quality tools for this. This work can make a great contribution to the results of the work of ecommerce teams. In this regards enterprise resource planning also should be counted.

The benefits extend beyond the online storefront, fostering international trade and creating a common language for buyers and sellers worldwide. In a competitive marketplace, investing in standardized product catalog is a strategic move that can set businesses apart and build long-lasting customer relationships.