How do you organize your merchandising categories?

1 Step 1: Define your product attributes

The first step is to identify the main attributes that distinguish your products from each other. These could be based on features, benefits, uses, prices, styles, or any other criteria that are relevant to your target market. For example, if you sell clothing, you might use attributes such as gender, size, color, material, occasion, or season. You can use a spreadsheet or a software tool to list all your products and their attributes.

2 Step 2: Group your products into categories

The next step is to group your products into categories based on their attributes. You can use a hierarchical structure, where you have a main category, subcategories, and sub-subcategories, or a flat structure, where you have only one level of categories. The best option depends on the size and diversity of your product range, as well as the ease of navigation and search for your customers. For example, if you sell books, you might use a hierarchical structure with main categories such as fiction, non-fiction, children, or genres, and subcategories such as authors, titles, or formats.

3 Step 3: Assign a name and a code to each category

The third step is to assign a name and a code to each category. The name should be clear, concise, and descriptive of the products in the category. It should also be consistent with the language and expectations of your customers. The code should be unique, alphanumeric, and easy to remember and use. It should also follow a logical order and reflect the hierarchy of your categories. For example, if you sell electronics, you might use a code such as E01 for the main category of TVs, E01.01 for the subcategory of LED TVs, and E01.01.01 for the sub-subcategory of 32-inch LED TVs.

4 Step 4: Review and refine your categories

The final step is to review and refine your categories. You should check if your categories are complete, accurate, and up to date. You should also evaluate if your categories are relevant, attractive, and profitable for your customers. You can use data and feedback from your sales, inventory, marketing, and customer service channels to measure the performance and potential of your categories. You can also use market research, competitor analysis, and industry trends to identify new opportunities and challenges for your categories. Based on your findings, you can add, remove, merge, or split your categories as needed.

Organizing your merchandising categories is not a one-time activity, but a continuous process that requires regular monitoring and adjustment. By following these four steps, you can create a merchandising category system that suits your business goals and customer needs.

5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?