Why Does Product Classification Matter

Accurate product data is an essential part of a consumer’s purchasing decision. From search results to conversions, brand awareness, product benchmarking, and final purchase, clarity, availability, and clear product information help customers make purchasing decisions.

That’s why it is important to organize and categorize product information for customer service. The process of classifying data into groups or classifications requires the use of classification standards, which are regarded as a system for organizing product data that allows retailers to easily classify all types of products and services according to the specific characteristics or attributes that form a hierarchy. What’s more, product classification can work wonders for your warehouse organization if you run a hybrid ecommerce business. It’s time to end those mix-ups and provide a great experience to both your b2b and b2c customers.

What Is Product Classification?

Product classification divides products into four categories based on the consumer buying behavior and similarity to other products and competing brands. Categorizing products into these various categories helps marketers implement better strategies and direct efforts based on consumer expectations for that product class. Product data is unstructured in its raw form. Each vendor uses a different structure and vocabulary to describe their products.


Everything you need to know about product distribution. Goods or products are classified as manufactured or manufactured goods. Consumer goods are produced for the personal use of end-users, and manufactured goods are manufactured for industrial use. There are many products that can be classified as industrial and consumer goods, such as typewriters and office supplies. Traditionally, marketers categorize products according to three characteristics: durability, relevance and usability.  View website for more information as well.

Products can be classified as follows: 

  1. Consumer goods 
  2. Manufactured goods.

Some types of consumer goods are:

  1. FMCG 
  2. Shopping products 
  3. Special products 
  4. Impulse products 
  5. Essential products.

Some types of industrial goods: 

  1. Raw materials
  2. Materials and manufacturing parts 
  3. Furniture 
  4. Auxiliary equipment 
  5. Distribution 
  6. Services.

Specialty products classification

There’s also classification for specialty products that are bought rather infrequently. These items tend to be durable, costly products, like high-end appliances or jewelry. They often involve personal sales or authorized dealerships. Interested consumers have limited options because only a few vendors have them available in stock.

Unsought goods classification

These are the things that people don’t purchase on impulse or aren’t that excited to get hold off. Some examples are life insurance and fire extinguishers. When individuals do buy these items, they do it out of a sense of danger or fear. Another reason to buy unsought goods is that the old ones ran out in supply, which often happens with products like batteries. When running a campaign for unsought products, remind customers that buying your items is key to get a better sense of security.

Shopping goods classification

These are products that people characteristically compare on the grounds of price, quality, style, and sustainability during the choosing and buying process. Some examples of these goods are automobile, appliances, and apparel. You can divide these goods into heterogenous and homogenous products. A consumer sees the latter as similar in quality but knows that the difference in price and nature are enough to validate comparisons. The buyer gets the price from the seller. But when it comes to heterogenous items like furniture and clothing, the features are more important than anything else. Whoever is selling the heterogenous items has to stock a high-quality, wide range to satisfy the needs of the customer. 

Why Product Classification is Important?

Standards are important as they help save business costs associated with mismanaged product information. But saving is only one aspect of the coin. The main benefits are:

  • Buyers and sellers speak the same language across regions or countries.
  • Product data processing becomes simpler, ensuring the accuracy and accuracy of the data.
  • Helps companies streamline reports by product category
  • It helps retailers make the most of their product information to help consumers make the right purchase.
  • It serves as a guide for implementing the standard if the enterprise does not yet have an internal distribution system.

A successful process of grouping information or products is necessary for an organization to set up an appropriate level of management to maintain the integrity and consistency of knowledge. It is also very useful for users who want to find the information they need through the right search.

Product distribution plays an important role in your website’s conversion rate and has a direct impact on your customers’ purchasing decisions. The applied standards can be reproduced from data sources on the Internet, making it easy to organize and display product information in various categories and modules. Accurate classification also improves compliance and helps organizations comply with GDPR, HIPAA, FERPA, and other data protection rules. In short, product classification standards help businesses organize product information back and forth. Many parties benefit from the right product grouping.

Reasons to Automate Your Product Classifcation 

Product Data Quality

Product data quality is an important issue when grouping and classifying products. Product information must be accurate, complete, and standardized before it can be distributed and distributed. That’s why ProductMatch has data cleansing and standardization features that help retailers and manufacturers clear product information from inconsistencies and duplications before merging them into a classification scheme. You can read a detailed guide to product data quality here.

Relying on Manual Methods

Most retailers still have teams that use spreadsheets to manually sort product data. This is not only counterproductive, but it also compromises product data quality. Replication can fail, or problems with font and standardization can occur, causing problems for subsequent applications and processes. Companies need automated solutions to classify and classify product data. In fact, you can’t afford to spend days manually entering codes for each product or building a taxonomy.

Time and resource constraints

Businesses are usually overwhelmed by the amount of streaming data coming in every day. You don’t have time to review each product and decide on the right category or hierarchy. Most classifications occur on an intuitive basis or on predefined systems that have not been updated for years. Time and personal constraints prevent companies from investing in the accuracy of product data, leading to poor analytics, costly errors, and low conversion rates.

External education

This allows marketers to directly observe and learn beyond industry initiatives, but it offers significant advantages in creating an appropriate marketing mix (e.g. marketing strategy) for products with similar characteristics and consumer behavior. This should lead to more innovation and reduce the likelihood of an inefficient marketing mix.

For example, a soft drink vendor may be looking at a chocolate bar vendor approaching a marketing mix. Even if you are not a direct competitor, you will face similar marketing challenges and you will be able to easily apply successful campaigns in one industry to another. Similarly, charities (junks) can view marketing initiatives in insurance markets (including junks) as ideas for their own marketing programs.

Understanding consumer behavior

This classification system for consumer products is based primarily on the user’s interaction with the product, as well as the design elements/attributes of the product. That is, the choice of the retailer, whether or not the buyer will buy it, the level of information received before the purchase, brand importance, price category, etc. As you can see, the consumer goods distribution system is based on the four components of the marketing mix.

How a product company meets product classification criteria

ProductMatch Enterprise is one of those automated machine learning solutions designed to support product classification for various distribution standards. It is designed to automatically classify products and generate classifications based on the original description. Process UNSPSC data and indexing using machine learning and natural language processing techniques.

Additionally, resellers and manufacturers can:

  • A simple interface allows you to organize, repair, summarize and associate menus.
  • Ensure automated product classification based on UNSPSC standards
  • Create custom deployment standards
  • Accurate and efficient management of product data
  • Save time, resources, and money
  • Recognize millions of rows of semi-structured or unstructured product information.


What makes ProductMatch truly powerful is an integrated software framework. Users can perform critical data quality tasks such as profiling, data cleansing, data preparation, and data matching to ensure that data is the desired quality for deployment. When you’re ready to work, our team will help you create product classifications and implement standard code for each product.


Electronic trading platforms have tremendous potential. However, product data must be efficiently modeled and presented to help businesses cope with the growing influx of information. Product or content managers should not exceed 30% of their time manually structuring, categorizing, redistributing, and optimizing large amounts of data to describe their products. In this era of automation, these dreaded and repetitive tasks need to be automated so that team members can focus on really important things like user experience, business potential, and future growth.