The fifth level in a merchandise hierarchy, representing a more specific group of related products within a category (e.g., Floral Long Sleeve Blouses, Striped Long Sleeve Blouses, Solid Long Sleeve Blouses).

What is Subcategory?

A subcategory refers to a more specific classification within a broader product category or department. It represents a grouping of related products that share common characteristics, such as type, use, or function. Subcategories help customers navigate and locate products more easily and assist retailers in organizing their inventory for efficient management and merchandising.

How Subcategory works

  • Classification and Grouping: Retailers classify products into subcategories based on common attributes, such as product type, brand, or use. For instance, within the "Clothing" category, subcategories may include "Dresses," "Tops," and "Bottoms."

  • Facilitating Customer Navigation: Subcategories make it easier for customers to find the products they are looking for. Online or in physical stores, customers can navigate through these subcategories to narrow down their choices and locate specific items.

  • Merchandising and Inventory Management: Retailers use subcategories to organise their inventory, which helps with stock replenishment, visual merchandising, and marketing efforts. By grouping similar products together, they can plan promotions, create appealing displays, and manage stock levels more effectively.

  • Online and In-Store Search: Subcategories are especially important for online retail, where customers often use search filters and browse categories to find products. In physical stores, they guide shoppers to specific sections or aisles that contain related products.

  • Sales Analysis: Retailers use subcategories to track the performance of different product groupings. This data is valuable for understanding which subcategories are popular, which may need more marketing attention, and which require inventory adjustments.
In summary, subcategories are a foundational element in retail organisation, simplifying the shopping experience for customers and helping retailers manage and market their products effectively.

Pros of Subcategory

  1. Improved Customer Experience: Subcategories make it easier for customers to find and navigate products, leading to a more efficient and enjoyable shopping experience. By providing clear and structured paths to the items they're interested in, customers are more likely to make purchases and have a positive perception of the retailer.
  2. Efficient Inventory Management: Subcategories enable retailers to organise and manage their inventory more effectively. This aids in stock replenishment, visual merchandising, and inventory control, which can reduce stockouts and overstocking while optimising the allocation of resources.
  3. Targeted Merchandising and Marketing: Subcategories allow retailers to target their merchandising and marketing efforts more precisely. By grouping related products together, retailers can create promotions, displays, and advertising campaigns that are highly relevant to a specific product category, increasing the effectiveness of their marketing initiatives.

Cons of Subcategory

  1. Over-Complexity: While subcategories can improve organisation, having too many subcategories within a product category can lead to over-complexity. This can confuse customers and make navigation more challenging, especially on e-commerce websites with extensive inventories.
  2. Maintenance Effort: Creating and maintaining subcategories requires ongoing effort, especially for retailers with frequently changing product lines. It's essential to keep subcategories updated, which can be resource-intensive and time-consuming.
  3. Potential Misclassification: Misclassifying products into subcategories can result in customers not finding the items they're looking for or being directed to the wrong product sections. This can lead to frustration and a poor shopping experience.


Below you will find answers to common questions
How can we determine the most effective subcategories for organising our product inventory?
To determine effective subcategories, retailers should consider customer preferences and purchasing behaviours. Conducting market research and analysing sales data can provide insights into how customers naturally group and search for products. It's important to strike a balance between providing enough subcategories for organisation without overwhelming customers. Regularly reviewing and adjusting subcategories based on changing trends and customer feedback is also crucial for maintaining effectiveness.
What are the best practices for ensuring consistent and accurate product classification within subcategories?
Ensuring consistent and accurate product classification involves establishing clear guidelines for categorisation, including defining the criteria for each subcategory. Retailers should provide training and resources to employees responsible for product classification to maintain accuracy. Regular audits and reviews of product listings can help identify and correct any misclassifications, ensuring that customers can easily find the items they are looking for within the appropriate subcategories.