5 Key Insights on B2B Product Categorization
Getting Started
Introduction
Introduction
At first glance, you might assume that B2B ecommerce sites, with their extensive product offerings, would be champions of organizing and categorizing products. However, based on our research at OutreachRight, that’s far from the case.
Many B2B businesses appear to have overlooked the importance of proper product categorization, which is concerning. This is particularly true given that for many B2B websites, their category structure is the primary navigation mechanism—aside from search bars.
After analyzing the product categorization strategies of over 500 B2B ecommerce sites as part of our B2B research at OutreachRight, we've identified a pattern of both best practices and common pitfalls. Below, we share five simple ways successful B2B businesses are approaching product categorization.
1. MECE Sub-categories
Successful B2B companies ensure that their product sub-categories are Mutually Exclusive and Collectively Exhaustive (MECE). In other words, every product should fit into one category without overlap, and no category should leave out any product.
By adhering to the MECE principle, companies avoid customer confusion. Imagine shopping for industrial tools and finding the same product listed under two completely different categories. The customer journey should be as streamlined and efficient as possible.
Example
Companies like Grainger and Fastenal excel at structuring their categories with precision. Each product clearly belongs to only one category, which ensures a seamless and efficient browsing experience.
2. Rule of Three
The best B2B ecommerce platforms limit themselves to a maximum of three category layers in their main navigation. Any more than this, and users may feel overwhelmed. Keeping it simple and digestible allows users to find what they need faster.
Example
Platforms like Uline showcase only up to three layers of categories in their dropdown menus. For instance, under "Packaging Supplies," you might have "Boxes" as the second layer, and "Corrugated Boxes" as the third. This structure ensures clarity and simplicity.
3. Three Seconds to Comprehend
A well-structured product categorization should take less than three seconds to comprehend. This "three-second rule" is a good benchmark for whether your categories are intuitive. If a user can navigate your site with ease, they are more likely to stay and make a purchase.
Example
MSC Direct achieves this with concise, descriptive category names that allow customers to quickly understand the available options. With a clean and logical layout, it only takes a few seconds for users to find what they need.
4. KISS Navigation
For B2B businesses with large catalogs, it’s crucial to follow the Keep It Simple, Stupid (KISS) principle. Avoid overly complex category names and opt for clarity instead. Straightforward navigation helps users move through your site with ease.
Example
Ferguson simplifies navigation by using clear, to-the-point names for their categories. Their use of straightforward language ensures that even less tech-savvy users can easily find what they’re looking for.
5. Cross-Categories with Purpose
Cross-categorization can be a powerful tool when used strategically. Instead of confusing users with products in multiple categories, focus on emphasizing specific traits across categories where it makes sense.
Example
Staples Business Advantage effectively uses cross-categorization by placing office supplies in both "General Supplies" and "Sustainably Sourced" categories. This approach helps customers looking for eco-friendly options to find them easily across different product lines.
At OutreachRight, we understand that effective product categorization can make or break the user experience. With the right approach, you can guide your customers seamlessly through your catalog, improve conversions, and reduce bounce rates.
At first glance, you might assume that B2B ecommerce sites, with their extensive product offerings, would be champions of organizing and categorizing products. However, based on our research at OutreachRight, that’s far from the case.
Many B2B businesses appear to have overlooked the importance of proper product categorization, which is concerning. This is particularly true given that for many B2B websites, their category structure is the primary navigation mechanism—aside from search bars.
After analyzing the product categorization strategies of over 500 B2B ecommerce sites as part of our B2B research at OutreachRight, we've identified a pattern of both best practices and common pitfalls. Below, we share five simple ways successful B2B businesses are approaching product categorization.
1. MECE Sub-categories
Successful B2B companies ensure that their product sub-categories are Mutually Exclusive and Collectively Exhaustive (MECE). In other words, every product should fit into one category without overlap, and no category should leave out any product.
By adhering to the MECE principle, companies avoid customer confusion. Imagine shopping for industrial tools and finding the same product listed under two completely different categories. The customer journey should be as streamlined and efficient as possible.
Example
Companies like Grainger and Fastenal excel at structuring their categories with precision. Each product clearly belongs to only one category, which ensures a seamless and efficient browsing experience.
2. Rule of Three
The best B2B ecommerce platforms limit themselves to a maximum of three category layers in their main navigation. Any more than this, and users may feel overwhelmed. Keeping it simple and digestible allows users to find what they need faster.
Example
Platforms like Uline showcase only up to three layers of categories in their dropdown menus. For instance, under "Packaging Supplies," you might have "Boxes" as the second layer, and "Corrugated Boxes" as the third. This structure ensures clarity and simplicity.
3. Three Seconds to Comprehend
A well-structured product categorization should take less than three seconds to comprehend. This "three-second rule" is a good benchmark for whether your categories are intuitive. If a user can navigate your site with ease, they are more likely to stay and make a purchase.
Example
MSC Direct achieves this with concise, descriptive category names that allow customers to quickly understand the available options. With a clean and logical layout, it only takes a few seconds for users to find what they need.
4. KISS Navigation
For B2B businesses with large catalogs, it’s crucial to follow the Keep It Simple, Stupid (KISS) principle. Avoid overly complex category names and opt for clarity instead. Straightforward navigation helps users move through your site with ease.
Example
Ferguson simplifies navigation by using clear, to-the-point names for their categories. Their use of straightforward language ensures that even less tech-savvy users can easily find what they’re looking for.
5. Cross-Categories with Purpose
Cross-categorization can be a powerful tool when used strategically. Instead of confusing users with products in multiple categories, focus on emphasizing specific traits across categories where it makes sense.
Example
Staples Business Advantage effectively uses cross-categorization by placing office supplies in both "General Supplies" and "Sustainably Sourced" categories. This approach helps customers looking for eco-friendly options to find them easily across different product lines.
At OutreachRight, we understand that effective product categorization can make or break the user experience. With the right approach, you can guide your customers seamlessly through your catalog, improve conversions, and reduce bounce rates.
Transform your B2B ecommerce—join OutreachRight now for tailored solutions and innovative product categorization!
Schedule a free consultation call today!
Transform your B2B ecommerce—join OutreachRight now for tailored solutions and innovative product categorization!
Schedule a free consultation call today!
Transform your B2B ecommerce—join OutreachRight now for tailored solutions and innovative product categorization!
Schedule a free consultation call today!
Transform your B2B ecommerce—join OutreachRight now for tailored solutions and innovative product categorization!
Schedule a free consultation call today!
What is a Product Category?
What is a Product Category?
A product category refers to a group of similar products that share related characteristics. It acts as a label that summarizes the type of products underneath it. For example, "Car Tires" could be a category containing winter and summer tires of different sizes. Additionally, tires could be a sub-category within a larger category like "Cars" in an auto shop.
The Good, the Bad, and the Product-Category-Mesh
Many B2B ecommerce sites attempt to categorize their products, which is a great first step. However, instead of creating a clear structure, they often bundle products into a chaotic, disorganized product-category-mesh.
While some shops do create categories, they leave them in a jumbled state with no defined structure. This results in an overwhelming number of categories—sometimes over 1,000—with no clear linkages to help customers navigate the assortment unless they rely solely on the search function.
This random bundling often leads to category overlaps, leaving users unsure where to start. For instance, consider a tool manufacturer’s site—an electric saw could be found under "Electrical," "Power Tools," "Hand Tools," "Cutting Tools," or "Machinery," creating confusion and frustration for the buyer.
If this is the worst practice, let us see how some companies managed to turn this for the better.
A product category refers to a group of similar products that share related characteristics. It acts as a label that summarizes the type of products underneath it. For example, "Car Tires" could be a category containing winter and summer tires of different sizes. Additionally, tires could be a sub-category within a larger category like "Cars" in an auto shop.
The Good, the Bad, and the Product-Category-Mesh
Many B2B ecommerce sites attempt to categorize their products, which is a great first step. However, instead of creating a clear structure, they often bundle products into a chaotic, disorganized product-category-mesh.
While some shops do create categories, they leave them in a jumbled state with no defined structure. This results in an overwhelming number of categories—sometimes over 1,000—with no clear linkages to help customers navigate the assortment unless they rely solely on the search function.
This random bundling often leads to category overlaps, leaving users unsure where to start. For instance, consider a tool manufacturer’s site—an electric saw could be found under "Electrical," "Power Tools," "Hand Tools," "Cutting Tools," or "Machinery," creating confusion and frustration for the buyer.
If this is the worst practice, let us see how some companies managed to turn this for the better.
5 Rules for Best Product Categorization
5 Rules for Best Product Categorization
#1 - MECE Sub-Categories
For B2B shops with complex catalogs, categorizing products into main, sub, and sub-sub categories can be a powerful way to avoid disorganization. Categories should follow the MECE (Mutually Exclusive, Collectively Exhaustive) principle. This means categories should not overlap, but they must cover all products.
Example: Indiamart effectively segments its vast catalog into six distinct business areas, such as Building & Construction or Electronics & Electrical. Each area is then further divided into high-level product categories like "Solar & Renewable Energy Products" or "Office Automation Products," ensuring a logical and exhaustive breakdown of products.
#2 - Rule of 3
A common theme in successful B2B ecommerce sites is the "Rule of 3." Most sites cap their categorization layers to three: a main category and two sub-levels. This approach simplifies navigation while maintaining structure.
Example: Morgan Sports uses this strategy effectively with 8 main categories, each broken into two sub-levels. For instance, you can navigate through Functional Fitness > Strength Equipment > Dumbbell Sets & Dumbbell Racks. This ensures a clean navigation experience, with no more than three levels deep. For sites with larger assortments, additional product filtering, as demonstrated by Blake Envelopes, can provide better search experiences deeper in the grid.
#3 - 3 Seconds to Comprehend
An overly complicated category structure can overwhelm customers. Ideally, users should be able to comprehend product categories within 3 seconds. Structuring categories by attributes such as product type, application, or format can make it easier for customers to find what they need quickly.
Example: Blake Envelopes excels at making categorization intuitive. By breaking down their catalog based on size, color, and type, they allow customers to effortlessly find products through visual elements and quick classification.
#4 - KISS (Keep It Simple Stupid) Navigation
Even with large and complex catalogs, the KISS principle can keep navigation simple. Instead of over-complicating with fancy visuals or creative titles, some B2B brands organize their catalogs by product type or alphabetical order, streamlining the user experience.
Example: Alibaba.com, a massive B2B marketplace, employs this principle, sticking to no more than three product category layers. Despite their immense range, the site uses simple alphabetical sub-categories, making it easier to browse thousands of products.
#5 - Cross-Categories with Purpose
Though the MECE principle governs the overall categorization, cross-categories can also help highlight specific traits across different categories. The most common types of cross-categories include:
Most Popular: Categories based on sales data.
Discounts: Products on sale, either site-wide or targeted.
New Arrivals: Highlighting the latest additions to the product catalog.
These cross-categories are highly effective for targeting specific business goals, such as showcasing new products, boosting clearance sales, or focusing on fast-moving inventory. More "exotic" cross-categories can also add value, such as Delivery Time (seen in DHgate) and Trending Searches (seen in Snapdeal and Made-in-China.com).
#1 - MECE Sub-Categories
For B2B shops with complex catalogs, categorizing products into main, sub, and sub-sub categories can be a powerful way to avoid disorganization. Categories should follow the MECE (Mutually Exclusive, Collectively Exhaustive) principle. This means categories should not overlap, but they must cover all products.
Example: Indiamart effectively segments its vast catalog into six distinct business areas, such as Building & Construction or Electronics & Electrical. Each area is then further divided into high-level product categories like "Solar & Renewable Energy Products" or "Office Automation Products," ensuring a logical and exhaustive breakdown of products.
#2 - Rule of 3
A common theme in successful B2B ecommerce sites is the "Rule of 3." Most sites cap their categorization layers to three: a main category and two sub-levels. This approach simplifies navigation while maintaining structure.
Example: Morgan Sports uses this strategy effectively with 8 main categories, each broken into two sub-levels. For instance, you can navigate through Functional Fitness > Strength Equipment > Dumbbell Sets & Dumbbell Racks. This ensures a clean navigation experience, with no more than three levels deep. For sites with larger assortments, additional product filtering, as demonstrated by Blake Envelopes, can provide better search experiences deeper in the grid.
#3 - 3 Seconds to Comprehend
An overly complicated category structure can overwhelm customers. Ideally, users should be able to comprehend product categories within 3 seconds. Structuring categories by attributes such as product type, application, or format can make it easier for customers to find what they need quickly.
Example: Blake Envelopes excels at making categorization intuitive. By breaking down their catalog based on size, color, and type, they allow customers to effortlessly find products through visual elements and quick classification.
#4 - KISS (Keep It Simple Stupid) Navigation
Even with large and complex catalogs, the KISS principle can keep navigation simple. Instead of over-complicating with fancy visuals or creative titles, some B2B brands organize their catalogs by product type or alphabetical order, streamlining the user experience.
Example: Alibaba.com, a massive B2B marketplace, employs this principle, sticking to no more than three product category layers. Despite their immense range, the site uses simple alphabetical sub-categories, making it easier to browse thousands of products.
#5 - Cross-Categories with Purpose
Though the MECE principle governs the overall categorization, cross-categories can also help highlight specific traits across different categories. The most common types of cross-categories include:
Most Popular: Categories based on sales data.
Discounts: Products on sale, either site-wide or targeted.
New Arrivals: Highlighting the latest additions to the product catalog.
These cross-categories are highly effective for targeting specific business goals, such as showcasing new products, boosting clearance sales, or focusing on fast-moving inventory. More "exotic" cross-categories can also add value, such as Delivery Time (seen in DHgate) and Trending Searches (seen in Snapdeal and Made-in-China.com).
Transform your B2B ecommerce—join OutreachRight now for tailored solutions and innovative product categorization!
Schedule a free consultation call today!
Transform your B2B ecommerce—join OutreachRight now for tailored solutions and innovative product categorization!
Schedule a free consultation call today!
Transform your B2B ecommerce—join OutreachRight now for tailored solutions and innovative product categorization!
Schedule a free consultation call today!
Transform your B2B ecommerce—join OutreachRight now for tailored solutions and innovative product categorization!
Schedule a free consultation call today!
Conclusion
Conclusion
Many B2B ecommerce companies overlook the importance of proper product categorization, even though it plays a vital role in site navigation. A well-structured product catalog can significantly enhance the customer experience and drive conversions.
To excel in product categorization, here are 5 essential rules I’ve gathered from the top-performing B2B ecommerce sites:
MECE Sub-Categories: Ensure product sub-categories are Mutually Exclusive and Collectively Exhaustive to prevent overlap and provide full coverage.
Rule of Three: Limit your site’s product categories to a maximum of three layers, especially in the dropdown navigation.
Three Seconds to Comprehend: Categories should be organized in a way that allows users to understand them within 3 seconds.
KISS Navigation: Keep the navigation simple and focused, even for large, diverse catalogs. Avoid cluttered visuals and focus on clear category names.
Cross-Categories with Purpose: Implement cross-categories thoughtfully to highlight specific traits, such as new arrivals, discounts, or popular items.
Mastering these rules will improve customer experience and simplify product discovery for your users, making your B2B ecommerce site stand out.
Many B2B ecommerce companies overlook the importance of proper product categorization, even though it plays a vital role in site navigation. A well-structured product catalog can significantly enhance the customer experience and drive conversions.
To excel in product categorization, here are 5 essential rules I’ve gathered from the top-performing B2B ecommerce sites:
MECE Sub-Categories: Ensure product sub-categories are Mutually Exclusive and Collectively Exhaustive to prevent overlap and provide full coverage.
Rule of Three: Limit your site’s product categories to a maximum of three layers, especially in the dropdown navigation.
Three Seconds to Comprehend: Categories should be organized in a way that allows users to understand them within 3 seconds.
KISS Navigation: Keep the navigation simple and focused, even for large, diverse catalogs. Avoid cluttered visuals and focus on clear category names.
Cross-Categories with Purpose: Implement cross-categories thoughtfully to highlight specific traits, such as new arrivals, discounts, or popular items.
Mastering these rules will improve customer experience and simplify product discovery for your users, making your B2B ecommerce site stand out.
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