The Ultimate E-Commerce Dictionary: Simplifying the Language of Online Business

E-commerce has its own unique language. If you’re new to the space or just want to brush up on your knowledge, this glossary has you covered. We’re breaking down every term you need to know, from SEO and A/B testing to dynamic pricing and information architecture, and explaining why it matters for your business.

The Glossary: A-Z

A

• Above the Fold: The visible portion of a webpage before scrolling.
  • Benefit: Prime real estate for CTAs and engaging content to capture immediate attention.
• A/B Testing: Comparing two versions of a webpage or campaign to see which performs better.
  • Benefit: Increases conversions through data-driven optimisation.
• Accessibility: Designing websites usable by everyone, including people with disabilities.
  • Benefit: Expands your audience and ensures legal compliance.
• ACoS (Advertising Cost of Sale): A metric measuring the efficiency of ad spend.
  • Benefit: Helps refine ad budgets for better ROI.
• Affiliate Marketing: Promoting products and earning a commission on sales.
  • Benefit: Low-risk, performance-based marketing strategy to expand reach.
• API (Application Programming Interface): Tools allowing apps or systems to communicate.
  • Benefit: Enables seamless integration between platforms.
• Attribution Window: The time period during which a conversion can be credited to a marketing channel.
  • Benefit: Optimises marketing by identifying effective channels.
• Average Order Value (AOV): The average amount spent per order.
  • Benefit: Tracks customer spending habits and identifies upselling opportunities.
    
    

B

• Below the Fold: The part of a webpage visible only after scrolling.
  • Benefit: A space for detailed, secondary information that complements above-the-fold content.
• Bounce Rate: The percentage of visitors who leave after viewing one page.
  • Benefit: Signals issues with content, UX, or relevance.
• Basket Building: Strategies to encourage customers to add more items to their cart.
  • Benefit: Increases average order value and reduces per-item shipping costs.
• BOGO: "Buy One, Get One Free" promotional deals.
  • Benefit: Drives impulse purchases and clears inventory.
• Buyer Persona: Fictional representations of ideal customers based on data and research.
  • Benefit: Refines marketing and product development by focusing on customer needs.
    
    

C

• Call-to-Action (CTA): Text or buttons encouraging specific user actions, like "Buy Now."
  • Benefit: Guides users to key conversion points.
• CLV (Customer Lifetime Value): The total revenue a customer is expected to generate over their lifecycle.
  • Benefit: Helps allocate budgets and prioritise retention strategies.
• Churn Rate: The percentage of customers who stop buying over a period.
  • Benefit: Indicates customer satisfaction and the effectiveness of retention strategies.
• Conversion Funnel: The journey from initial visit to completing a purchase.
  • Benefit: Identifies barriers to purchase and improves UX.
• Conversion Rate: The percentage of visitors who take a desired action.
  • Benefit: A key metric for evaluating marketing and site performance.
• CRO (Conversion Rate Optimisation): Improving elements to boost conversions.
  • Benefit: Maximises revenue without increasing traffic.
• Cookies: Small data files that track and personalise user experiences.
  • Benefit: Enables targeted ads and tailored experiences.
• Cost of Goods Sold (COGS): The direct costs of producing products.
  • Benefit: Essential for calculating profit margins.
• Cross-Selling: Recommending complementary products to customers.
  • Benefit: Increases average order value and customer satisfaction.
    
    
    

D

• Dynamic Pricing: Adjusting prices based on demand, competition, or inventory.
  • Benefit: Maximises profitability by responding to market conditions.
• Detail Page: The product page displaying all key information.
  • Benefit: Optimising this page increases conversions.
• Dropshipping: A fulfilment method where suppliers handle inventory and shipping.
  • Benefit: Reduces overhead costs and simplifies operations.
    
    
    

E

• E-Commerce Platform: Software like Shopify or WooCommerce that supports online stores.
  • Benefit: Simplifies managing sales, inventory, and marketing.
• Engagement Rate: The percentage of users interacting with your content.
  • Benefit: Measures content relevance and effectiveness.
• Email Marketing: Sending targeted emails to prospects and customers.
  • Benefit: Builds relationships and drives repeat purchases.
• Exit Rate: The percentage of visitors who leave a site after viewing a specific page.
  • Benefit: Identifies pages with potential UX issues.
    
    
    

F

• Flat-Rate Shipping: A fixed shipping fee regardless of weight or size.
  • Benefit: Simplifies costs for customers, reducing cart abandonment.
• Fulfilment: The process of picking, packing, and shipping orders.
  • Benefit: Efficient fulfilment improves customer satisfaction and loyalty.
    
    
    

H

• Heatmaps: Visual representations of user activity on a site.
  • Benefit: Identifies high- and low-engagement areas for optimisation.
    
    
    

I

• Information Architecture: The structure of content on your website.
  • Benefit: Makes navigation intuitive, improving user experience.
• Interactive Product Visualisation: Tools like 3D or AR that showcase products.
  • Benefit: Enhances customer understanding and confidence.
    
    

K

• Key Performance Indicator (KPI): Metrics to measure progress toward goals.
  • Benefit: Tracks success and identifies areas for improvement.
• Keywords: Words or phrases customers use to search online.
  • Benefit: Drives traffic and improves SEO strategy.
    

M

• Mega Menu: Dropdown menus displaying multiple categories and subcategories.
  • Benefit: Simplifies navigation and enhances user experience.
• Mobile-First Design: Designing for mobile devices before scaling to larger screens.
  • Benefit: Ensures seamless experiences for mobile users.
    
    

N

• Navigation: The system that helps users move through your website.
  • Benefit: Improves UX and increases time on site.
• Net Promoter Score (NPS): Measures customer loyalty.
  • Benefit: Helps identify promoters and detractors.
    
    

P

• Payment Gateways: Services like Stripe or PayPal for secure transactions.
  • Benefit: Builds trust and facilitates seamless purchases.
• Personalisation: Customising the shopping experience based on data.
  • Benefit: Improves relevance and increases conversions.
• PPC (Pay-Per-Click): Ads where advertisers pay per user click.
  • Benefit: Drives targeted traffic.
    
    

_R

• ROAS (Return on Ad Spend): The revenue generated per dollar spent on ads.
  • Benefit: Indicates the efficiency of ad campaigns.
• Responsive Design: Websites adapting to different screen sizes.
  • Benefit: Ensures usability across devices.
    
    
    

S

• SEO (Search Engine Optimisation): Techniques to improve search engine rankings.
  • Benefit: Drives organic traffic and reduces paid ad costs.
• Social Proof: Reviews and testimonials that build trust.
  • Benefit: Encourages new customers to purchase.
    
    
    

T

• Time on Page: The average duration visitors spend on a webpage.
  • Benefit: Measures engagement and content relevance.
• Trust Signals: Elements like reviews or SSL certificates that build credibility.
  • Benefit: Reduces hesitation and increases conversions.
    
    
    

U

• Upselling: Encouraging customers to buy a more expensive version or add-ons.
  • Benefit: Increases revenue per transaction.
• User Experience (UX): The overall interaction experience of a customer.
  • Benefit: Improves satisfaction and increases conversions.
• UTM Parameters: Tags added to URLs for tracking campaign performance.
  • Benefit: Provides granular insights into traffic sources.
    
    

V

• Value Proposition: The unique benefits of your product or service.
  • Benefit: Differentiates your brand and attracts customers.
    
    

W

• Web Analytics: Tools to measure and improve website performance.
  • Benefit: Provides actionable insights for optimisation.
• Wish Lists: Saved items for future purchase.
  • Benefit: Encourages return visits.
    

Key Takeaways

1. Understanding the lingo matters: Knowing the language of e-commerce helps you make better decisions.
2. Not all terms are intuitive: Definitions like CLV and CRO are game-changers when applied effectively.
3. A glossary is a tool, not just a reference: Use these definitions to identify gaps in your strategy.
   

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