Primary Product Hierarchy or Back Bone Taxonomy

Having discussed with a wide range of retailers as well as a lot of their suppliers, we have discovered that taxonomy is a very diverse concept: while some companies have thousands of sub-sub-sub-sub-categories and gazillions of attributes, others simply don’t have anything clearly stated on how their products should be organized, classified or described. But what exactly is taxonomy when it comes to retail? To us, it groups the three tools that help categorize and break down the characteristics of a product:

- the category tree (how can I group my products by nature?)

- the attribute list (what additional information on my product can I give?)

- the attribute value list (what are the most common values for a given attribute?)

Through our discussions with 20 retailers and more than 80 of their suppliers, we have found out that about

-23% do not have a fixed category tree

-49% do not manage a proper set of attributes for their products

-68% do not use a list of values.

In any retailer the objective has always been to standardise product information and to foster more efficient information exchange between e-commerce parties – both suppliers and customers. Please note that most of the retailers will have dual category trees, one for their back/middle office solution often manifesting in the MDM Tool as the Primary Product Hierarchy or Backbone and one for their website, the Web Selling Taxonomy.

There are a few differences. In the Backbone Taxonomy tree, a given product will only be in one category while on the website a product might be in several categories, to enhance its visibility. Also, the website categories might be frequently changed based on performance monitoring and/or strategic decisions, while the back-office category tree should be more rigid and less often changed, and hence should be designed as robust and comprehensive as possible from the start. The website will always be a partial reflection of the organisation of the core category tree. The number, names and accuracy of the categories and attributes should match the size, organisation and maturity of the company.

Easier transfers: If you are a manufacturer or a supplier, providing the right classification information and a list of characteristics as extensive as possible to your retailers also simply makes sense in order to ease the customer’s journey to your products. You might not have the exact same category tree with your retailers, or the same attribute names but if you give them a clear and organized set of categories and description of your products, you’ll save their time and ensure your products are given the exposure they deserve.

Stronger reporting: For any company, identifying the over or under performing divisions is a vital necessity. When you’re a retailer, it all starts with a proper product classification, doesn’t it? The more accurate it is and the more efficient, decision-supporting and value-creating your reporting will be. And trust us, you’ll save time. A lot.

Better product page: the category tree may be the backbone tool helping a customer to get to your product, but the attribute list will definitely make them buy (or not) your product. And whether it’s the power of that set of speakers or the length of the cord of that rice cooker, at some point, there is someone out there who is going to ask. It’s always better to have the answers ready.

Better Onsite classification and search: if you manage an e-commerce website, you’ll be aware that facet or filter attributes and search bar efficiency are key to your customers’ experience, and to your conversion rate. The backbone taxonomy drives the filter attributes of categories and makes finding the right product easier.

Now let us discuss what would be the best practices for product taxonomy, how to build an efficient category tree or how to differentiate between what’s category material and what should be treated as an attribute.

First of all, a bit of vocabulary about product taxonomy. There are three main tools :

- The category tree (also known as product hierarchy): it helps group products by nature in a set of hierarchized categories.

Example: Home > Home Appliances > Kitchen > Cooking > Rice Cookers

- The attribute list (also known as facets, dimensions or refinements): additional information attributes, used to qualify the products in a same category. When applied to a product, an attribute will require a value.

Example: Bowl capacity, colour, type of sole …

- The value list: for some attributes, the finite, predefined set of possible values, for Booleans (yes/no) or rich attributes

Example: Blue, 1.5 litres, 220V, strong, …

Each attribute will apply to several categories, and have various values. Values are linked to one and only attribute.

Understanding the relationships between those three tools is essential to the understanding of taxonomy design. What will follow is a set of advice based on our experience and research and intended to help the would-be and the seasoned taxonomists in their designing or revamping of product classifications.