The advantages of product categorization are many. It enables a company to make sure their stock is organized and easy to search through, which decreases the amount of time it takes to find the product you need. This is particularly advantageous for online stores with a relatively large range of product options, as well as for retail locations that have rows upon rows of products to browse.
Product classification also supports improved marketing initiatives, such as offering customers relevant options when they search for something. This in turn may increase conversions, which in turn may lead to increased revenues for the company.
Although the majority of online stores have digital methods of organizing their products, manual product classification can be beneficial for brick-and-mortar stores with a big selection of products in their inventory or stores that do not use an inventory control system such as barcode scanners or RFID tags.
The technique involves writing down all the things the shop offers and then placing them into categories that make sense to potential buyers. The categories should be in order from most to least expensive, with some degree of logical connection between them. For example, if you sell shirts, pants, and shoes, you might want to place them in the following order: ‘Tops’, ‘Denim’, and ‘Footwear’.
It is advisable to separate accessories and other items from the groupings above so that they will stand out more and appeal to more customers who are looking for them.
Product classification has the added benefit of simplifying purchasing decisions for customers who are browsing the store and unsure of which option would be best for them. This will increase conversions and also customer satisfaction, as it makes their experience with your store simpler and easier to understand.
The process can also help you identify gaps in your inventory that need addressing; this might give you insights into which items are popular with your customers or which you might want to add in the future. You can utilize this information when planning new items to sell or deciding whether a certain item needs some additional description so that it appeals more strongly to buyers.
Be able to determine a category for any of your products. Have a better product organization based on these product categories.