Ecommerce Terms

A/B Testing

(also known as split testing) is a process of showing two variants of the same web page, marketing campaign, etc. to different segments of consumers at the same time and comparing which variant drives more conversions.

consumer touchpoints

(e.g. web, app, in-store)

Bottom of the Funnel

Bottom of the Funnel is referred to as a transaction phase or purchase stage of the online buying process. At this stage the visitor has done all the research and is about to make a purchase. Bottom of the Funnel if preceded by the 'Top of the Funnel' which means product/service comparison stage and the 'Middle of the Funnel' which means validation stage.

Brand Marketing

Brand marketing promotes your products or services in a way that highlights your overall brand. The goal of brand marketing is to link your identity, values, and personality with communications to your audience.

Business Intelligence

Business intelligence (BI) leverages software and services to transform data into actionable insights that inform an organization's strategic and tactical business decisions. BI tools access and analyze data sets and present analytical findings in reports, summaries, dashboards, graphs, charts and maps to provide users with detailed intelligence about the state of the business.

conversion rate

Businesses want visitors to take action (also called a conversion) on their website, and the rate at which a site can drive this is called its "conversion rate."

Buyers Persona

Buyers Persona is a representation of your prospective customer based on market research and real data of your existing customers. While preparing a buyers persona its important to consider their journey, behavioral pattern, demographics, goals etc.

Consumer Insights

Carefully evaluated information about your current and potential customers. They come from a combination of quantitative and qualitative research and data analysis.

customer experience

Defined as the quality of interaction between your customers and your company. The impressions you leave with your ecommerce website visitors will largely determine whether they will return, how much they spend with you, and how long they'll remain your customers. The customer experience isn't limited to your ecommerce storefront — you have to think omnichannel. It encompasses every touchpoint across the customer journey, from the shopping experience to checkout and on through communications about shipping and delivery.

direct traffic

Direct traffic consists of website visitors that come to your website by typing the URL into their browser, rather than coming from another website, a search engine, or social media.

distributed commerce

Distributed commerce is when potential customers are able to purchase products embedded within existing ecommerce content. Customers can buy what they see without leaving the platform/page they were browsing on.

Distribution Center

Distribution centers are a key part of the distribution chain for products, order fulfilment, and storing produced goods prior to their shipment to wholesale, retail or customers.

dropshipping

Dropshipping is the process of an online store working with wholesale suppliers for the delivery of products by passing them shipping information about each customer order.

CPM

Stand for cost per mille or 1,000 impressions; refers to the cost of displaying an advertisement one thousand times (known as "impressions"). The CPM pricing structure is used for some display ads and is an important metric for ecommerce businesses that maintain affiliate networks

ASIN

Stands for Amazon Standard Identification Number; a unique 10-character alphanumeric identifier for a product on Amazon (for example B07ZB5C3ZM). It is linked to an unique SKU/EAN/ISBN code and used as a reference to manage catalogue attributes, prices and inventory of a product.

BFCM

Stands for Black Friday and Cyber Monday. Two key holidays for online retailers.

ATC Rate

Stands for add to cart rate; the percentage of visitors that add items to the shopping cart.

ACoS

Stands for advertising cost of sale; a metric used to measure the performance of an Amazon Sponsored Products campaign. ACoS indicates the ratio of ad spend to targeted sales and is calculated by this formula: ACoS = ad spend ÷ sales.

AMS

Stands for amazon marketing services; the built-in pay-per-click (PPC) platform where you can get your products visible to relevant consumers based on products, keywords and the consumers' interests (such as viewing habits.) AMS allows you to create advertisements that will be visible on various parts of Amazon such as sponsored product listings on search results, headline search ads in search results, and product display ads.

AWS

Stands for amazon web services; an ecommerce cloud computing solution.

API

Stands for application progamming interface; a set of clearly defined methods of communication among various components of a system, providing building blocks to enable you to access eCommerce application functions without requiring a hard coded integration e.g. adding an 'add to basket' button into blog pages hosted on a 3rd party CMS like Wordpress.

AR

Stands for augmented reality; an enhanced version of reality created by the use of technology to overlay digital information on an image of something being viewed through a device (such as a smartphone camera).

AOV

Stands for average order value; an eCommerce metric that measures the average total of every order placed with a retailer over a defined period of time. The formula for calculating AOV is revenue divided by number of orders. AOV is one of the most important metrics for online stores to be aware of, driving key business decisions such as advertising spend, store layout, and product pricing.

ASP

Stands for average selling price; refers to the price a product is typically being sold for across distribution channels or markets.

ATV

Stands for average transaction value; the average dollar amount that a consumer spends with your business in a single transaction.

B2B

Stands for business-to-business; a form of transaction between businesses, such as one involving a manufacturer and wholesaler, or a wholesaler and a retailer. Business-to-business refers to business that is conducted between companies, rather than between a company and individual consumer.

B2C

Stands for business-to-consumer; refers to the process of selling products and services directly between a business and consumers who are the end-users of its products or services. Most companies that sell directly to consumers can be referred to as B2C companies.

BNPL

Stands for buy now, pay later; credit payment that allows you to purchase goods, but pay for them either later or by instalments.

BOGO

Stands for buy one, get one free; a type of promotion for sellers.

BOPIS

Stands for buy online pickup in-store; allows customers to shop online—through a website or mobile app—and pick up the items in-store. Also known as click-and-collect, this fulfillment option is perfect for consumers looking for a fast and convenient way to get what they need. They can choose a convenient store location and time to pick up their items.

CTA

Stands for call-to-action; a request or call for customers to take the desired action. This action could be anything - from subscribing to a newsletter to booking a slot in a webinar, making a purchase, availing a service, and so on.

CRAP

Stands for can't realize a profit. If, based on Amazon algorithms, a product is deemed CRAP, it means there is a reason it won't realize a profit: Shipping costs, too much inventory, pricing issues, etc. can result in this designation.

CTR

Stands for click through rate; a ratio that shows the number of clicks on a specific link or ad to the total number of visitors browsing through that page or ad. CTR is measured for a webpage, advertisements or links in emails which helps to determine the success of online marketing campaign. The CTR helps online retailers to understand the effectiveness of keywords and performance of the ads or email campaigns.

CTOR

Stands for click-to-open rate; this measure reflects the effectiveness of the message and content in your email in getting recipients to click through and find out more about your business or offer. How to calculate click-to-open rate: [Unique Clicks] / [Unique Opens] x 100 = Click-to-Open Rate

CSV

Stands for comma seperated values; A CSV or a comma-separated file is a file-type that stores data in a tabular form. They look like a general spreadsheet but have a .csv extension. These files are extremely important to export or import large amounts of data, which, in the case of your online store, could be information regarding customers, products, inventory and more. The CSV file format makes it easy to export, import and convert, and can be used to coordinate among different arms of your business. For instance, receiving data from the manufacturing unit to send to the finance division of your company.

COTS

Stands for commercial off the shelf eCommerce package; a solution that is made available for other organizations to use when they pay a license fee.

CPG

Stands for consumer packaged goods; items used daily by average consumers that require routine replacement or replenishment, such as food, beverages, beauty, and household products.

CMS

Stands for content management system; technology that enables ecommerce teams to create, edit, manage & publish content to a website e.g. landing page banners.

CRO

Stands for conversion rate optimization; a process of enhancing the user experience of a website to improve the chances of convincing the visitors to complete their online goal.

COGS

Stands for cost of goods sold; refers to the direct production costs of the goods sold by a company. In simple terms, it describes how much it costs to produce a product that is being sold. COGS include direct raw material and labour expenses, but exclude indirect cost components, such as marketing expenses and shipping fees.

CPA

Stands for cost per acquisition; a marketing metric that measures the aggregate cost to acquire one paying customer on a campaign or channel level.

CPI

Stands for cost per install; CPI campaigns are specific to mobile applications. In a Cost Per Install campaign, publishers place digital ads across a range of media in an effort to drive installation of the advertised application. The brand is charged a fixed or bid rate only when the application is installed.

CPL

Stands for cost per lead; a digital marketing pricing model whereby the advertiser pays a pre-established price for each lead generated. In eCommerce, CPL is often utilized by businesses who sell subscription services or high-value products.

CAC

Stands for customer acquisition cost; the average amount of money you spend in obtaining a customer. CAC is calculated by adding the marketing & sales spend for a given period and dividing that by the number of customers gained during that given period.

CRM

Stands for customer relationship management; a technology for managing all your company's relationships and interactions with customers and potential customers. The goal is simple: Improve business relationships to grow your business. A CRM system helps companies stay connected to customers, streamline processes, and improve profitability.

DSP

Stands for demand side platform, an automated buying platform, where advertisers and agencies go to purchase digital ad inventory. Examples of ad inventory include banner ads on websites, mobile ads on apps and the mobile web, and in-stream video. DSPs are integrated into multiple ad exchanges. See: Programmatic Advertising.

DPV

Stands for detail page views; metric showing the number of impressions of a single detail page.

DTC

Stands for direct-to-consumer; a term that means when brands sell directly to their end customers without selling through a retailer, distributor, wholesaler or other outlet.

eCPM

Stands for effective cost per thousand impressions (technically, "effective cost per mille").; eCPM helps compare media with different pricing methods by converting everything to a common metric. This can be helpful when you have a mix of ad buys denominated in cost per impression, cost per click, cost per lead, cost per action, fixed-price sponsorship, or other pricing methods. Sometimes, eCPM is used to refer to revenue per thousand impressions on the publisher's side.

EDI

Stands for electronic data interchange; the electronic interchange of business information using a standardized format; a process which allows one company to send information to another company electronically rather than with paper.

ERP

Stands for enterprise resource planning; enterprise application that enables the business to handle complex data and process flows to automate back-office functions related to like product planning, reporting & financial reconciliation.

3PL

Stands for third-party logistics; third-parties that businesses use to outsource distribution, warehousing, and/or fulfillment services.

CLV

The lifetime value of a customer, or customer lifetime value, represents the total amount of money a customer is expected to spend in your business, or on your products, during their lifetime. This is an important figure to know because it helps you make decisions about how much money to invest in acquiring new customers and retaining existing ones.

Clickstream

The pathway that a user takes through their online journey. It is usually focused on a single website and generally shows how the user progressed from search to purchase.

Churn Rate

The percentage of customers or subscribers who cut ties with the company or from the services in the given period of time. So it is basically the revenue or customers lost during a specific period (typically a month), by unsubscribing from the services. Churn Rate is also called Attrition Rate.

bounce rate

The percentage of visitors that leave a webpage without taking an action, such as clicking on a link, filling out a form, or making a purchase.

Agile Project Management

Agile project management is an iterative development methodology that values human communication and feedback, adapting to change, and producing working results.

Big Data

Big data refers to large data sets that must be analyzed by computers to reveal patterns and trends. Businesses can leverage big data to gain insight into customer behavior, for example.

3D and 360 degree photography

3D and 360 degree product photography allows people to rotate, pinch, and zoom in on your products in high definition to see every detail and virtually "touch" your products.

endless aisle

A brand's ability to present its full catalog of products and accessible content online. Consumers have the ability to order products from any business at any time. In response, retailers want to host the widest array of product selection in order to provide consumers an endless aisle of products on their retail site rather than risk losing the sale to another website with the content.

Brick and Mortar

A business that has a physical store that customers can go to rather than just having an online presence.

Chatbot

A chatbot is a computer program that simulates conversation with human users to complete some sort of service. An online retailer's chatbot talks with customers about their products. Chatbots for eCommerce companies are typically designed to complete buyers' purchases.

digital assets

A digital asset is anything used to represent your brand, from product photos and stock photos you incorporate into your website to videos and GIFs you use on social media. A digital asset is also the font libraries you use in branded materials, your brand guide, and even your brand's mission statement, pillars, and copy.

Display advertising

A display ad, also known as a banner ad, is a form of online paid advertising that is typically a designed image or a photo and copy. Viewers can then click on the image with the promotion to then be taken to the corresponding landing page.

Conversational commerce

A form of eCommerce where brands and consumers communicate through live representatives and AI assistants in order to explore offerings, make transactions and receive services or help with their purchases.

Category Page

A landing page for a specific group of products.

Chargeback

A reversal of a completed credit card transaction—typically because a customer disputes a charge and the merchant's bank refunds the value of the transaction.

Brand Management

A series of techniques used to increase the perceived value of a product or service.

Content Marketing

A type of marketing that involves the creation and sharing of online material (such as videos, blogs, and social media posts) that does not explicitly promote a brand but is intended to stimulate interest in its products or services.

A+ content

A+ content is available for first party (1P) vendors on Amazon and features high quality images. In short, A+ content better conveys the value of the product through the use of multimedia.

Cart abandonment

Abandonment is used to describe a visitor on a web page who leaves that page before completing the desired action. Cart abandonment is when customers add items to their online shopping cart but exit the website without making a purchase.

Acquisition Marketing

Acquisition marketing refers to bringing in new customers - or convincing people to buy your products. It is a process used to bring consumers down the marketing funnel from brand awareness to purchase decision.

earned media

All the content and conversation around your brand or product that has been created by somebody else and published somewhere other than your owned channels. Earned media can include press coverage, social media mentions, shares and retweets, product or company reviews, and blog posts authored outside your company.

Amazon Vendor (1P)

Amazon acts as the retailer, and you operate as a wholesale supplier to Amazon.

Cohort Analysis

An analysis of customer behaviors, during a specified time frame, of a subset of your eCommere customers that have been segmented from all your visitors based on shared characteristics.

ecommerce platform

An application that provides core ecommerce functionality e.g. online shopping basket and checkout.

closed-loop marketing

Closed loop marketing is an effective method used by companies for analytics purpose and to achieve better insights into marketing campaigns that lead to ROI. This method involves collection of customer data from multiple channels, analyzing this data and using the information to create appropriate content for targeted groups of customers. This data involves information from marketing campaigns including your website, content offers, blogs, SEO tactics, emails etc. It is a data driven approach connecting end results of every campaign to the marketing initiative which in turn helps to understand its effectiveness.

conversion path

Conversion Path is a step-wise approach that involves converting anonymous website visitor into a known lead. The typical conversion path begins when a user arrives on the landing page, browses through series of page transitions and reaches the final state which is either a purchase or an abandoned session.

cookies

Cookies are small text files a website sends to a visitor's browser to store data related to that visitor's interactions with the website. These text files are sent back to the server each time the visitor accesses the website. Cookies are mainly used for ad and content targeting, and for saving shopping cart information.

copywriting

Copywriting is the act or occupation of writing text for the purpose of advertising or other forms of marketing. The product, called copy or sales copy, is written content that aims to increase brand awareness and ultimately persuade a person or group to take a particular action.

Curbside pickup

Curbside pickup is a service that enables customers to place an order in advance and pick up said order either without having to get out of their vehicles or without having to go inside the business itself. Not only is this method convenient, but it's also a contactless or low-contact way for consumers to patronize businesses.

customer loyalty

Customer loyalty is a measure of a customer's likeliness to do repeat business with a company or brand. It is the result of customer satisfaction, positive customer experiences, and the overall value of the goods or services a customer receives from a business.

ESP

Email service provider (Mailchimp, Klaviyo, Sendinblue, Omnisend, etc)

engagement rate

Engagement Rate is a metric that is used to measure how much a visitor gets engaged to the given piece of content or ad. It shows a percentage of the people who came to the site, noticed the ad or content and could engage with it.

email marketing

Engaging your audience with products and services promoted through email. These email lists usually consist of users that have signed up or expressed an interest in the site or organization.

back-end

Focused on how the site works (functionality).

Cross sells

Introducing similar items to customers who are currently viewing a product on the site or have already added it to their shopping cart to encourage sales.

Bundling

Product bundling is a marketing strategy that is widely used by businesses to make consumers buy more than they had planned. It normally involves offering various related products or services and selling them together at a reduced price. This technique can be quite attractive for customers who appreciate package discounts and can make it more difficult for consumers to compare prices. The set of products that you're offering must be is cheaper than buying the products separately. You want consumers to feel like they're saving by buying these kinds of packs so that they end up choosing them in the end. The main objective of this marketing technique is to create a set of products that provides more value together than apart.

CPC

Refers to the actual price you pay for each click in your pay-per-click (PPC) marketing campaigns.

Average Time on Sight

The average amount of time your visitor spends on your website within a specified time frame.

Bottom Line Growth

The bottom line is a company's net income, or the "bottom" figure on a company's income statement. More specifically, the bottom line is a company's income after all expenses have been deducted from revenues. These expenses include interest charges paid on loans, general and administrative costs, and income taxes. A company's bottom line can also be referred to as net earnings or net profits.

conversion funnel

The conversion funnel is a set of pages (like the checkout process or registration form) that leads to your conversion goal (like a product purchase or subscription). Most web analytics tools can be configured to allow you to visualize where your visitors are leaking from your conversion funnel.

digital shelf

The digital shelf is how and where a brand's product is displayed online, whether on a product description page on a retailer's site, third-party marketplace, mobile app, personal website or any other eCommerce channel. This is where digital consumers go to browse, discover and purchase products, similar to a physical retail shelf. For most retailers, the primary digital shelf is the search results page. This is where the majority of consumers look for items to purchase after inputting their direct inquiries into a search bar or filtering product choices based on their individual requirements. Other examples of digital shelves are category pages, curated product lists and new product release email campaigns.

conversion

When you transform an online store visitor into a paying customer.

Buy Box

The term Buy Box refers to the area on the Amazon product detail page where customers can choose to add products to their shopping cart.

customer journey

The term that describes the stages of a customer's experience with an online business, from the moment they first become aware of its products through the moment they complete a purchase.

content

The textual, visual, or aural content that is encountered as part of the user experience on websites. It may include—among other things—text, images, sounds, videos, and animations.

Affiliate Marketing

This is a 3-party marketing process when a publisher and an advertiser join forces to market to the consumer. A company/website takes on the task of promoting a service or a specific product. This is the role of the publisher. They use any form of banners, ads or links and creatively market the product or service to the user, or in this case the consumer. The advertiser is the party with the product. They pay the publisher, which is often a marketing firm, a fee or an arranged commission from everything sold.

Accessibility

Websites, tools, and technologies designed and developed so that people with disabilities can use them.

conversion

When the recipient of a marketing message performs a desired action. Conversion is a very important metric in the marketing funnel, but it does not always mean a purchase. Conversions can also happen prior to a sale and are an indicator that a prospect has moved down the sales funnel.