A Cheat Sheet of 60+ Ecommerce Terms
Every business and industry has its language. Ecommerce and digital retail are no different. But in the world of startups or small business, you might be wearing many hats: owner, IT chief, and marketer, to name just one possible combination.
To make sure you can promote and market your business successfully, it’s important to understand the terms that you will need to translate—both for others inside your business and for suppliers and other contractors you work with.
Plus, these terms are critical in understanding how the business is thriving and where you might need to do more (or less) to woo, convert, and keep customers.
More than likely, you will rarely use these terms in outward communications or direct marketing efforts, but they are essential for you to help plan, activate, and succeed with your marketing campaigns and ongoing customer engagement tactics.
To that end, here’s a quick guide to the 63 terms that will help you thrive in ecommerce:
A way to let search engines and site visitors know that a webpage moved to a new address. Customers who bookmarked your old webpage will be redirected to the new one.
A/B testing (or split testing)
A/B split testing is a simple process that lets you compare two versions of a webpage so you can determine the most effective strategy. You show Version A and Version B to groups of would-be customers during the same time frame to learn which approach nets the higher conversion rate.
Address verification service (AVS)
A service that credit card processors implement to verify that the billing addresses of your customers match the addresses on their credit card statements.
A marketing strategy in which your ecommerce business partners with online publishers so that they will promote and endorse your products and send customers to your website. Typically, the affiliate receives a fee for every website visitor or sale generated from the promotion.
This Google Analytics report summarizes and ranks the importance of marketing channels in a consumer’s conversion journey. It helps you identify the channels responsible for generating leads and visits to your website so you can nurture would-be customers and convert them.
In Google Analytics, you want to find out which channels—direct, organic search, referral, email, paid search, other advertising, social, and display—account for your sales. Here are seven common attribution models:
- Last interaction model: The last channel that the customer interacted with before buying receives 100% of the credit for the conversion.
- Last nondirect click model: All direct traffic is ignored in this model, which credits 100% of the conversion to whatever interaction the customer had before making a purchase.
- Last AdWords click model: The last AdWords ad that the customer interacted with before buying receives 100% of the credit for the conversion.
- First interaction model: The first channel that the customer interacted with before buying receives 100% of the credit for the conversion.
- Linear model: Every channel that the customer interacted with before converting receives an equal share of the conversion credit.
- Time decay model: This one gives most of the credit to the channels the customer interacted with in the time nearest to the sale.
- Position-based model: This model attributes 40% of the conversion credit to the first interaction, 40% to the last interaction, and the remaining 20% equally across any interactions that occurred between the first and last interactions.
The process when your customer’s credit card issuer gives permission and allows a payment transaction to proceed.
Average order value
This is the typical amount that your customer spends when visiting your digital storefront. Learn how to increase your average order value here.
Here’s how to calculate average order value:
[Sales Revenue] / [Number of Orders Taken] = Average Order Value
Average time on site
The typical amount of time your visitor spends on your website within a specified time frame.
The address used on a customer’s credit card statement.
The percentage of visits to a website where visitors leave after viewing a single page.
Bundling (or product bundling)
The grouping of related products or services as a package or solution, often offered at a reduced price, to encourage conversion.
Business to business (B2B)
Online transactions in which an online business sells products or services to other businesses.
Business to consumer (B2C)
Online transactions between a merchant and a consumer.
A Google Analytics metric that looks at the number of products purchased relative to the number of times the customer viewed product detail pages.
Here’s how to calculate buy-to-detail rate:
[Unique Purchases of a Product] / [Product Detail Page Views] = Buy-to-Detail Rate
Call to action (CTA)
Call to action (or CTA) is an advertising and marketing tactic that involves providing instruction to the target audience to persuade them to take an action, such as “visit now,” “learn more now,” “subscribe now,” and “get access now.”
Cart abandonment rate
Cart abandonment rate is an online shopping metric that shows the rate of potential customers who leave a site before completing their purchases compared to all the shopping carts created. Learn how to improve yours here.
Here’s how to calculate cart abandonment rate in two steps
Step 1: [Completed Purchases] /[ Shop Carts Created x 100] = Percentage of Successful Transactions
Step 2:  – [Percentage of Successful Transactions] = Cart Abandonment Rate
A Google Analytics metric that looks at products added to a customer’s cart relative to views of product detail pages.
Here’s how to calculate cart-to-detail rate:
[Times a Product Is Added to Cart] /[ Product Detail Page Views] = Cart-to-Detail Rate
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.
Click-to-open rate (CTOR)
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.
Here’s the how to calculate click-to-open rate:
[Unique Clicks] / [Unique Opens] x 100 = Click-to-Open Rate
An analysis of customer behaviors, during a specified time frame, of a subset of your ecommerce customers that have been segmented from all your visitors based on shared characteristics.
When you transform an online store visitor into a paying customer.
A Google Analytics metric that details the events that your customers follow to conversion. It’s called a funnel because a percentage of visitors leave your website at each event along the journey. At conversion, there are fewer potential customers than there were at the start.
Conversion rate looks at the percentage of online store visitors who become paying customers. More on improving your conversion rates here.
Here’s how to calculate conversion rates:
[Paying Customers] / [Unique Visitors to Your Site] = Conversion Rate
Conversion rate optimization (CRO)
CRO is a marketing effort to drive conversions by improving an ecommerce website’s layout, content and design, landing pages, and sponsored search ads.
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.
When a seller offers additional products that complement, enhance, or relate to a product being sold is cross-selling. For example, mobile phone coverage plans with a mobile phone. More on cross-selling and upselling in this guide.
Customer lifetime value (CLV)
Customer lifetime value is the predicted revenue that a customer can generate for your business during all their interactions with your online store. More on increasing CLV here.
Discount code (or coupon, or promo code)
A code, usually a short series of numbers and/or letters, that online shoppers enter at checkout for special offers or discounts. Learn everything you need to know about discounts in this guide.
Discount rate is the fee that an online merchant pays to its third-party payment processor for processing credit card payments—typically a small percentage of each payment processed.
Drop shipping 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.
Promotion of your products and services to a targeted audience through email. Email marketing gets one of the highest ROIs when compared to other marketing channels. See how CM Commerce can enhance your ecommerce email strategy with automation and workflows.
Event-triggered emails are sent to subscribers based on specific events, such as a special offer tied to a subscriber’s birthday or wedding anniversary. Also known as transactional or automated emails. CM Commerce sends event-triggered emails with zero effort for any Shopify, WooCommerce, BigCommerce, or PrestaShop stores.
Fulfillment is the receipt, processing, packaging, and shipping of orders made through your online store. Learn more in our guide to automating fulfillment.
Gateway (or payment gateway)
An ecommerce service provider that communicates with your merchant account provider to authorize and process credit card payments.
Growth hacking is a marketing approach that blends analytics, traditional marketing, and product engineering to sell products, advertise services, and gain exposure rapidly. Read more about growing a store in this guide.
Inventory is a retailer’s or ecommerce store’s products on hand, waiting to be sold.
Keyword stuffing is an SEO technique that overloads a webpage with as many keywords as possible, often without context, to manipulate a site’s search engine ranking. This is typically much less effective in generating revenue than to focus on writing for your audience. Learn how to grow your site traffic organically in this guide.
A landing page is a single webpage on a site where a visitor arrives after clicking a link, often from an email. Such pages can exist to prompt a visitor to complete a call to action, such as signing up as an email subscriber or becoming a member of a special customer group.
A fee that some online auction websites charge sellers to list products or services.
Margin (or profit margin)
Profit margin is the difference between what a retailer pays for or spends to create a product and how much it earns on each sale of the product. More on creating a profitable store here.
Merchant account provider
Merchant account provider is an online account service provider that lets ecommerce businesses accept debit and credit payments, and temporarily holds the money until it’s transferred to the business’s bank account.
Mobile commerce (m-commerce)
The use of wireless electronic mobile devices such as cellphones, smartphones, and tablets to buy and sell products and services online.
The number of email subscribers who open the email you sent them.
The use of third-party vendors to support business needs to reduce overhead costs.
Partial shipment is when you send only part of an order to a customer and fulfill the order in multiple deliveries.
Google Analytics measures path length to summarize how long, in interactions, it takes visitors to your ecommerce site to become customers.
Payment Card Industry (PCI) compliance
PCI is a set of requirements to ensure you protect your customers’ credit card information when stored, processed, or transmitted.
Payment service provider
An ecommerce service that lets online stores accept and process multiple payment methods, such as credit cards, direct debits, bank transfers, and real-time online banking.
Pay-per-click (PPC) marketing
An advertising model in which the business pays only when someone clicks an ad and is directed to the retail website.
Point-of-sale (POS) system
POS is software that lets an online store accept transactions, manage inventory, add products, process payments, and send receipts digitally. For physical stores, this can also be a piece of machinery that has a register, till, and card reader.
A transaction wherein a customer authorizes an online store to automatically charge a credit card for regular delivery of products or services.
Search engine optimization (SEO)
SEO is a strategy, process, and tactic to improve an online store’s website content to make it easier for search engine bots to index the site and to drive up its search ranking. More on ecommerce SEO here.
Shipping is the transfer of a product from a seller’s warehouse to a customer’s delivery address.
A virtual representation of a shopping cart that lists the items that a customer has identified for purchase on your website. Learn about recovering abandoned cart revenue here.
Stock keeping unit (SKU)
SKU is a unique alphanumeric identification code for each product or service in your business’s inventory.
Google Analytics measures time lag to summarize how long, in days, it takes your website visitors to become customers.
Third-party payment processor
An external service that helps merchants accept and process online payments even without a merchant account, such as PayPal.
A transaction is simply a record of the actions taken for each order.
Turnkey refers to software sold as complete and ready to operate. CM Commerce offers turnkey workflows so you can sign up, turn on automation, and start gaining more revenue from email in no time.
Upselling is a technique to offer customers an opportunity to upgrade a purchase or to buy a more expensive version of a product to maximize the value of the purchase for the seller. Learn more about upselling to customers here.
Voiding is a transaction that cancels a purchase that has not been completed.
A set of strategic methodologies to collect, measure, analyze, and report website data to understand the behavior of visitors and customers so you can optimize the site experience and improve conversion.
Now that you know these terms, you’ll be more prepared to communicate with freelancers, learn from other blog posts, and take total control of your ecommerce email marketing.
From welcome emails to re-engagement campaigns and beyond, we seamlessly integrate with your ecommerce platforms—Magento, Shopify, and WooCommerce—so you’ll have all the features you need to exceed your goals.
CM Commerce features:
- Pre-made conversion campaigns to recover revenue from abandoned carts
- Follow-up segmented and personalized emails for cross-selling
- Product reviews that spotlight your happy customers and build trust (and sales)
- Automated feedback to increase repeat revenue
- Ready-to-go receipt templates or custom versions, coupons, and rewards with your branding