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The benefits of adding tags to products or other entities such as suppliers is to make searching and filtering easier on reports.
Tags can also be used to filter products when creating custom discounts.

To add a tag to a product, follow these steps:

          1.       In your back office click “Products”

          2.       Search for a product you wish to add a tag to

          3.       Select this product and click “Edit Selected Products(s)”

          4.       Click the tag icon at the top of page

          5.       Type in the desired tag name

          6.    A drop down will appear once typing is finished - click this to generate the tag  

          7.       Click “Save”

Also see: Tags that are useful