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Sharpen your eCommerce vocabulary with eCommerce glossary
Every word has its impact. Learn every jargon in eCommerce and how it helps the business.
Average Order Value (AOV)
AOV is the average amount a customer spends on your eCommerce website. This helps brands identify their biggest spenders. It can be calculated by: (Sales Revenue])/ (Number of Orders Taken) = Average Order Value
Abandoned Cart
When a customer adds items to their online shopping cart but leaves the website without completing the purchase.
A/B Testing
A method of comparing two versions of a webpage or app against each other to determine which one performs better.
Average Transaction Value (ATV)
ATV, or Average Transaction Value, represents the typical amount of money a customer spends in one transaction with your business. To determine ATV, you divide the total sales revenue by the total number of transactions:
ATV = Total Sales Revenue / Total Number of Transactions.
Bundling
Offering several products for sale as one combined product or package.
Back Order
An order for a product that is temporarily out of stock but will be delivered when available.
Buyer Persona
A buyer persona is a fictional character that embodies your ideal customer. This persona reflects the demographics, traits, and behaviors of someone who would gain the most from your product or service.
Boy Box
The section on a product detail page where customers can begin the purchasing process by adding items to their cart.
Brick-and-Click
A business model that integrates both offline (brick-and-mortar) and online (click-and-mortar) presences.
Customer Lifetime Value (CLTV)
The total worth of a customer to a business over the entirety of their relationship.
Conversion Rate
The percentage of visitors to an eCommerce site that completes a desired action, such as making a purchase.
Cross Selling
A sales technique where a seller encourages the customer to purchase additional, related products.
Channel Conflict
A situation where different sales channels compete against each other, potentially harming overall sales.
Click-through-Rate (CTR)
The percentage of people who click on a link or advertisement after seeing it.
Customer Acquisition Cost (CAC)
The total cost required acquire one customer for an eCommerce store.
Dropshipping
A retail fulfillment method where a store doesn’t keep the products it sells in stock. Instead, it purchases the item from a third party and ships it directly to the customer.
Dynamic Pricing
A pricing strategy where prices fluctuate based on market demand, competition, and other factors.
Demand Forecasting
The practice of predicting future customer demand using historical data and analysis.
Direct-to-Consumer (DTC)
This is a business strategy where a company directly markets, creates, sells, and delivers products to consumers.
eCommerce Platform
A software application that allows businesses to create online stores and manage their sales, marketing, and operations. Some examples are Shopify, WooCommerce, Magento, etc.
Email Marketing
The use of email to promote products or services, foster relationships with customers, and build brand loyalty.
Exchanges
The process where customers opt to swap an item they purchased from an eCommerce site for a different item.
Eyeball Tracking
Technology used to measure where and how long a user looks at different parts of a webpage.
Fulfillment Center
A warehouse where products are stored, packed, and shipped to customers.
Fraud detection
Systems and processes used to identify and prevent fraudulent activities in online transactions. Sometimes, effective returns solutions like EcoReturns also detect fraudulent returns for online stores.
Fulfillment by Amazon (FBA)
A service offered by Amazon where sellers send their products to Amazon’s fulfillment centers, and Amazon handles storage, packaging, and shipping.
Flash Sales
A discount or promotion offered by an eCommerce store for a very short period.
Freemium
A pricing strategy where a basic product or service is provided free of charge, but premium features are offered at a cost.
Gross Merchandise Value (GMV)
The total value of merchandise sold over a given period of time via a customer-to-customer exchange site.
Gateway
A service that processes credit card payments for eCommerce transactions.
Gross Margin
The difference between revenue and the cost of goods sold (COGS), expressed as a percentage of revenue.
Group Loyalty
A loyalty program where brands join hands with each other to reward customers. This type of loyalty program ensures higher redemptions of loyalty points and also helps brands acquire new customers.
Headless Commerce
An eCommerce solution where the front-end is decoupled from the back-end, allowing for more flexibility in design and user experience.
Hyperlocal Marketing
Marketing that targets customers within a very specific, localized area.
Inventory Management
The process of ordering, storing, and using a company’s inventory.
Inventory Turnover
A ratio showing how many times a company’s inventory is sold and replaced over a period.
Intelligent Personalization
Using AI and machine learning to deliver personalized content and recommendations to users.
In-stock Rate
The percentage of items in stock compared to the total number of items listed.
Just-in-Time (JIT)
An inventory strategy where materials are ordered and received only as they are needed in the production process.
Job Lot
A product or group of products produced or purchased as a single unit or group.
Keywords
Keywords are precise terms used in online marketing to encapsulate the main idea of your website, post, or product.
Key Performance Indicators (KPIs)
Measurable values that demonstrate how effectively a company is achieving key business objectives.
Landing Page
A standalone web page created specifically for a marketing or advertising campaign.
Logistics
The detailed coordination of a complex operation involving many people, facilities, or supplies.
Landed Cost
The total cost of a product once it has arrived at the buyer’s door, including the purchase price, shipping, duties, and taxes.
Localization
Adapting a product or content to a specific locale or market.
Loyalty Program
A way to reward loyal customers with special perks, discounts, redeemable points that can be used for future purchases, and so on.
Marketplace
A type of eCommerce site where multiple brands sell their products. Examples of marketplaces are Amazon, Walmart, etc.
Mobile Commerce
Also known as mCommerce, it is the buying and selling of goods and services through wireless handheld devices such as smartphones and tablets.
Multi-channel Retailing
Selling products on more than one sales channel (e.g., physical store, online store, mobile app).
Minimum Advertised Price (MAP)
The lowest price that sellers are allowed to advertise for a product by the manufacturer.
Niche website
Niche websites cater to a specific, smaller audience rather than a broad one. For instance, while dog owners represent a large market, corgi enthusiasts are a niche market, and corgi puppy owners form an even more focused niche.
Negative SEO
The practice of using unethical techniques to harm a competitor’s search engine rankings.
Omnichannel
A multi-channel approach to sales that seeks to provide customers with a seamless shopping experience, whether they are shopping online or in a brick-and-mortar store.
Order Management System
A system that helps track sales, orders, inventory, and fulfillment.
On-page vs Off-page SEO
On-page SEO includes strategies on a webpage to enhance its Google ranking, such as using targeted keywords in text, alt-tags, titles, headers, and URLs.
Off-page SEO involves activities outside your website to increase traffic and domain authority, like earning backlinks, guest blogging, participating in podcasts, and sharing visuals on social media that link back to your site.
Overhead Costs
The ongoing expenses of operating a business that are not directly tied to a specific product.
Organic Traffic
Organic traffic consists of visitors who arrive at your website through unpaid search results, usually from search engines like Google.
Open Box
Products that have been returned, inspected, and repackaged for sale at a discount.
Payment Gateway
A service that authorizes digital payments for online sellers. Examples of payment gateways are Paypal, Stripe, etc.
Pay-per-Click
An internet advertising model used to drive traffic to websites, where advertisers pay a publisher when the ad is clicked.
Private Label
Products manufactured by one company for sale under another company’s brand.
Paid Traffic
Traffic on the website that has come through advertisements.
Product Listing Optimization
Product listing optimization is the process of enhancing product pages to boost conversion rates, search visibility, and click-through rates, ultimately increasing sales.
Quality Assurance
The maintenance of a desired level of quality in a service or product.
Quick Response (QR) code
A type of barcode that can be scanned using a smartphone to quickly access information about products on your website.
Quicksand
A term used to describe when a website’s navigation design causes users to get “stuck” and unable to easily find their way to key product pages.
Returns
Returns in eCommerce refer to the process where customers send back purchased items for a refund, exchange, or store credit.
Reverse Logistics
The process of moving products from the customer’s address to the seller’s warehouse for the purpose of return or recycling.
Recommerce
The selling of previously owned products, often through online marketplaces.
Replenishment
The process of restocking products that have been sold or used.
Return on Ad Spend (ROAS)
This marketing metric calculates the revenue generated by a business for every dollar spent on advertising.
Search Engine Optimization
The process of optimizing a website to rank higher in search engine results.
Stock keeping Unit (SKU)
A unique identifier for each distinct product and service that can be purchased.
Share of Voice
Share of voice assesses the market presence of a specific brand in comparison to its competitors. SOV serves as an indicator of brand visibility and the extent to which you lead the conversation in your industry.
Store Credit
Store credit is a form of refund where the returned item’s value is credited to the customer’s account for future purchases.
Subscription Box
A recurring delivery of niche products packaged as an experience, often offered as a monthly subscription.
Supply Chain Management
The management of the flow of items, including all processes that transform raw materials into final products.
Third-party Logistics (3PL)
The use of third-party companies to outsource the brand’s distribution and fulfillment services.
Transactional Emails
Automated emails sent to customers following certain actions, such as order confirmations or password resets.
User Interface
User Interface (UI) refers to the layout and design elements that customers interact with on your website or mobile app
User Experience
User experience refers to how easily a user can interact with your site, product, or service.
Upselling
A sales technique where the seller invites the customer to purchase more expensive items, upgrades, or add-ons.
Voice Commerce
The use of voice recognition technology to search for and purchase products online.
Volume Discount
A discount given to buyers who purchase goods in large quantities.
Value-added Reseller
A company that adds features or services to an existing product and resells it as an integrated product.
Warehouse Management System
Software and processes that allow brands to control and administer warehouse operations from the time items or materials enter a warehouse until they move out.
Widget
A small application or tool that can be installed and executed within a web page.
Webrooming
The practice of researching products online before purchasing them in a physical store.