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Why Poor Product Categorization is Hurting Your eCommerce Sales: Common Mistakes and Solutions
Introduction
In the world of eCommerce, product categorization is one of the most important aspects that determine the success or failure of an online business. The way products are categorized and organized on a website can have a significant impact on customer experience, conversion rates, and ultimately sales revenue. A well-organized product categorization system ensures that customers can easily find what they are looking for without getting overwhelmed by too many options. On the other hand, poor product categorization leads to frustration among customers who may leave your site without making a purchase. Therefore, it's crucial for eCommerce businesses to prioritize creating an efficient and effective product categorization system in order to maximize their potential for growth and profitability in today’s highly competitive market.
Negative Impact of Poor Product Categorization
Poor product categorization can have a negative impact on eCommerce sales in various ways. In this section, we will discuss the consequences of poor product categorization, including decreased customer satisfaction, increased bounce rates, and lower conversion rates.
Decreased Customer Satisfaction
Customers expect to easily find what they are looking for when browsing an eCommerce website. When products are not properly categorized or labeled, customers may become frustrated and dissatisfied with their experience. This can lead to a decrease in customer loyalty and repeat business.
For example, imagine a customer is searching for a specific type of skincare product on an eCommerce website but cannot find it because it has been categorized under the wrong subcategory. The customer may feel frustrated by the confusing navigation and lack of organization on the site. As a result, they may decide to abandon their search altogether or turn to another retailer that offers clearer categorization.
To avoid such scenarios, retailers must ensure that their products are accurately labeled and organized into appropriate categories so that customers can easily navigate through them.
Increased Bounce Rates
Bounce rate refers to the percentage of visitors who leave an eCommerce website after viewing just one page without taking any further action (such as making a purchase). Poor product categorization can contribute significantly to high bounce rates since customers may be unable to quickly locate what they need or become too frustrated with navigating through irrelevant products.
According to Baymard Institute's research report on eCommerce usability issues published in 2020 [1], 25% of US online shoppers abandoned orders due to "too complex checkout processes", which includes difficulties in finding desired products related with poor product categorizations.
For instance, suppose someone visits an online clothing store intending only buy winter coats from its seasonal clothing category but finds summer dresses mixed up there as well due incorrect labeling at first glance . They might get confused regarding whether this store carries winter coats at all or not then leave soon without exploring much pages even though the store actually does carry winter coats. In this case, the retailer loses a potential customer due to poor product categorization.
Lower Conversion Rates
Conversion rate refers to the percentage of visitors who take a specific action (such as making a purchase) on an eCommerce website. Poor product categorization can reduce conversion rates because it creates unnecessary friction and confusion for customers, preventing them from finding what they need quickly.
According to research by BigCommerce [2], 44% of online shoppers said that site navigation was their biggest frustration when shopping online. If products are not correctly categorized or labeled, customers may struggle with navigation and leave without making a purchase.
For example, suppose someone intends to buy headphones online but finds them mixed up in miscellaneous category instead of electronics category at first glance due incorrect labeling. They might get frustrated while navigating through irrelevant products like books or furniture under miscellaneous categories instead of directly going into electronics categories which results in reduced probability of purchasing headphones from same website as there is more friction involved than expected.
To prevent such scenarios and increase conversion rates, retailers must ensure that their products are correctly categorized and searchable using keywords relevant to customer searches.
Common Categorization Mistakes
Effective product categorization is essential for the success of an eCommerce business. However, there are common mistakes that online retailers often make when it comes to organizing their products into categories. These mistakes can negatively impact sales and lead to a frustrating customer experience. In this section, we'll explore some of the most common categorization errors and provide real-world examples.
Vague Category Names
One of the most prevalent mistakes in product categorization is using vague category names. When customers visit an online store, they expect intuitive categories that allow them to quickly locate what they're looking for. If category names are too general or unclear, it can be difficult for customers to find what they need.
For example, imagine you run an electronics store with a category called "Accessories". This may seem like a logical catch-all for various items such as phone cases or chargers, but it doesn't provide any context about which devices those accessories belong to. A better approach would be creating subcategories under "Accessories" based on device type such as "Phone Accessories", "Tablet Accessories", or "Computer Accessories".
Another example could be a clothing retailer with just one main category titled “Clothing”. This generic title does not give customers any indication of what types of clothing are available on your site - from casual wear to formalwear? Women's wear only? Men's wear only? Customers may feel overwhelmed by having too many options without clear guidance on where each item belongs in terms of styles or gender-specific categories.
By providing more specific subcategories under broader headings like “Clothing” or “Accessories”, you help your customers navigate through your site more easily and increase the likelihood that they will purchase something.
Inconsistent Categorization Across Products
In addition to vague category names, inconsistent categorization across products is another mistake commonly made by online retailers. Consistency in naming conventions allows shoppers searching within different areas of your website (e.g., search bar, category filters) to easily find all products related to a particular term.
For example, imagine you sell outdoor gear and have two categories: "Camping Gear" and "Hiking Equipment". If you list some tents under “Camping Gear” and others under “Hiking Equipment”, customers may become confused about which category they should be looking in for their desired product. Consistency in categorization is key here - if one tent goes into the camping gear section, then the other tents should go there as well.
Another example could be an eCommerce business that sells office supplies with one category titled "Stationery". Inconsistent naming conventions can lead to confusion among shoppers who are searching for specific items such as pens or notebooks. Instead of using one broad title, it would be more effective to break down subcategories based on item type such as "Pens", "Notebooks", or even by brand.
By ensuring consistent categorization across your website, you create a clear and easy-to-navigate shopping experience for your customers.
Lack of Subcategories
Finally, another common mistake made by online retailers is not having enough subcategories within major categories. When creating categories on your site, it's important to consider how granular you want each section to be so that customers can find exactly what they're looking for without feeling overwhelmed with too many options.
For instance, suppose you run a pet store with just a single main category called “Pets”. This main heading alone doesn’t provide any information about what types of pets are available on your site - dogs? cats? birds? fish? By creating subcategories based on types/breeds (e.g., dogs > small breed > pugs), shoppers can quickly locate specific products while still seeing other relevant items nearby without overwhelming them with too many choices at once.
Another example could be an eCommerce business selling skincare products but only has two main categories - "Face" and "Body". This limited categorization can make it hard for customers to navigate your site, especially if they are looking for something specific like a facial cleanser or moisturizer. By adding more subcategories such as “Cleansers”, “Toners” or “Moisturizers” under the face category, you create an intuitive browsing experience that helps shoppers find exactly what they need.
Solutions for Improving Product Categorization
Effective product categorization is crucial for a successful eCommerce business. Here are some actionable steps to improve your product categorization:
Conduct a Categorization Audit
The first step in improving product categorization is to conduct an audit of your current system. This involves reviewing all the categories and subcategories you currently have, analyzing whether they make sense, and identifying areas that need improvement. You can also assess how easy it is for users to navigate through the categories.
During the audit process, you should consider using data analytics tools to get insights on user behavior and search queries on your website. This will help you identify which products are most popular with customers or which categories may need further refinement.
Use Customer Feedback
One of the best sources of information about what works (and doesn't work) in terms of product categorization is customer feedback. Try reaching out to customers who have recently made purchases from your site, or ask them for their opinion when they're browsing.
You can use surveys or feedback forms on your website to gather this information. Some key questions might include: Were you able to find what you were looking for? Was the category structure clear? Did anything frustrate you while browsing?
By incorporating customer feedback into your analysis, you'll be able to see where there's room for improvement in terms of how products are categorized.
Implement User-Friendly Categorization Systems
Once you've identified areas that need improvement based on both internal audits and customer feedback, it's time to implement user-friendly systems that make navigating through products easier.
Consider implementing filters such as price range or color options so users can quickly narrow down their search results according to their preferences. Make sure each category has clear descriptions so users know exactly what kind of products belong there.
Additionally, limiting the number of subcategories within each main category will help avoid confusion among shoppers who may not understand which subcategory certain items belong under.
Overall improvements in product categorization can lead to higher sales, increased customer satisfaction, and a more efficient user experience. By conducting an audit of your current system, gathering customer feedback, and implementing user-friendly systems, you'll be well on your way to improving product categorization for your eCommerce business.
Conclusion
In conclusion, having a well-organized product categorization system is critical for eCommerce businesses. Poorly categorized products negatively impact the customer experience and can lead to lost sales. To avoid this, businesses should take the time to carefully plan and implement their product categorization strategy. This involves understanding their customers' needs and preferences, ensuring consistency across all categories, and regularly reviewing and updating the system as needed. A well-organized product categorization not only improves the shopping experience but also helps with search engine optimization (SEO) efforts by making it easier for search engines to crawl and index your website's pages. Ultimately, investing in a solid product categorization system will pay off in increased conversions, higher customer satisfaction, and ultimately more revenue for your eCommerce business.