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What is a product category?

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Product category definition

A product category is a way for businesses to group and organize products or services they sell. When products are categorized, it is easier for customers to find what they’re looking for on a website and employees to quickly refer to and find a product. 

Categories tend to be organized in a hierarchy tree structure since many products will overlap between categories. You can break down product categories as small as you want, but that can be overwhelming for browsers on your website. Use your customer journey map to see where they are most likely to click through and set up your categories accordingly. 

Products can be categorized in various ways, from product type and features to customer needs. Many brands will include these multiple categories on their website so you can look for a general product type or search specifically for a feature or use case.

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Why is it important to create product categories?

Product categories help your promotion efforts

You can better promote connected products when you group similar products into categories. This helps customers find multiple products that complement each other — potentially increasing sales for multiple products. 

Easy navigation = a higher conversion rate

If your products are easy to find, the right customers will see them. Nobody wants to browse a website for a specific product only to find unrelated things pop up in the search. If your customers can’t find what they’re looking for, they’re more likely to spend their money elsewhere.

But if your product categories are clear, concise, and well organized, customers are more likely to find what they want — leading to higher conversion rates.  

What are some examples of product categories?

Skincare brands are a great place to look to see different product categories. Skincare brands will have a category for each product type (cleanser, toner, moisturizer, etc.) but may also categorize by skin type (oily, dry, combination, etc.). 

Clothing stores have categories for men, women, and children but then further break down those into subcategories, such as tops, outerwear, and bottoms. Alternatively, they might have sections for workwear, formal wear, and loungewear and categories of individual items within those sections. 

Even at the grocery store, items are in their product categories with signs for each category. There is a flow through the store as you walk down the aisles with similar products sitting together. 

You’ll also find a hierarchy to where products sit on shelves. Big brands and mid-range items sit on the middle shelves right at your eye line, premium brands get the top shelves, and store-brand and inexpensive items sit on the bottom shelves. 

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A comprehensive look at what product management is and how to distinguish what good product management looks like.

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General FAQ

What is a product category in marketing?
A product category is a way for a business to group similar items together for customers to find them, whether in a store or on a website.
Why are product categories important?
By grouping similar items together, customers are more likely to spend more time on your website, resulting in a higher conversion rate. The easier your website is to navigate, the more likely they will purchase from you.

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