E-commerce, or electronic commerce, has revolutionized the way businesses operate and consumers shop. This guide will demystify the key terms you need to understand to navigate the world of online retail.

Core ecommerce concepts

• E-commerce: The buying and selling of goods or services over the internet.
• Online store: A virtual platform where products or services are displayed and sold.
• Shopping cart: A virtual container where customers place items they intend to purchase.
• Checkout process: The series of steps a customer goes through to complete a purchase.
• Order fulfillment: The process of packing and shipping products to customers.
• Payment gateway: A service that authorizes payments between a buyer and a merchant.\

 

Key metrics and analytics

• Conversion rate: The percentage of website visitors who complete a desired action, such as making a purchase.
• Average Order Value (AOV): The average amount spent per transaction.
• Customer Lifetime Value (CLTV): The total revenue a customer generates throughout their relationship with a business.
• Cart abandonment rate: The percentage of customers who add items to their cart but don’t complete the purchase.

 

Marketing and sales terms

• SEO (Search Engine Optimization): The process of improving a website’s visibility on search engine results pages.
• PPC (Pay-Per-Click): An advertising model where advertisers pay for each click on their ad.
• Email marketing: Sending commercial messages to a group of people using email.
• Social media marketing: Promoting products or services through social media platforms.
• Affiliate marketing: A partnership where individuals or businesses promote other companies’ products in exchange for a commission.
• Upselling: Encouraging customers to purchase a higher-priced or upgraded version of a product.
• Cross-selling: Suggesting additional products to customers based on their initial purchase.
• Remarketing: Displaying ads to people who have previously visited your website.
• Customer Acquisition Cost (CAC): The cost of acquiring a new customer.
• Return on Investment (ROI): The measure of the profitability of an investment.

 

Logistics and fulfillment

• Inventory management: The process of tracking and controlling product stock levels.
• Order management: Handling customer orders from placement to fulfillment.
• Shipping and delivery: Transporting products from the seller to the customer.
• Returns and refunds: The process of handling customer returns and issuing refunds.
• Dropshipping: A fulfillment method where the seller doesn’t keep products in stock but instead transfers customer orders and shipment details to a third-party supplier.
• Warehouse Management System (WMS): Software used to manage and control warehouse operations.
• Supply Chain Management (SCM): Overseeing the movement of products from raw materials to the end consumer.

 

Payment and fraud prevention

• Chargeback: A reversal of a credit card transaction.
• Fraud: Unauthorized use of a payment card or other financial instrument.
• Tokenization: Replacing sensitive data with a unique identifier.

 

Customer service and support

• Customer Relationship Management (CRM): Software for managing customer interactions and data.
• Help desk: A department that provides technical assistance to customers.
• Live chat: Real-time text-based communication with customers.

 

Website optimization and design

• User Experience (UX): The overall experience a user has when interacting with a website.
• User Interface (UI): The look and feel of a website.
• Conversion Rate Optimization (CRO): The process of increasing the percentage of website visitors who complete a desired action.
• Above the fold: The content visible on a webpage without scrolling.
• Call to Action (CTA): A prompt that encourages a desired action.
• A/B testing: Comparing two versions of a webpage to determine which performs better.
• Bounce rate: The percentage of visitors who leave a website after viewing only one page.
• Landing page: A standalone webpage designed to achieve a specific goal, such as generating leads or sales.

 

Emerging trends

• Social commerce: Buying and selling products directly through social media platforms.
• Subscription box: A curated selection of products delivered on a recurring basis.
• Headless commerce: Decoupling the frontend of an ecommerce website from the backend.
• Personalization: Tailoring the customer experience based on individual preferences.
• Augmented Reality (AR) and Virtual Reality (VR): Immersive technologies enhancing the shopping experience.

Other important terms

• Customer journey: The complete experience a customer goes through from initial awareness to post-purchase.
• Product page optimization: Improving product pages to increase sales and conversions.
• Checkout optimization: Streamlining the checkout process to reduce cart abandonment.
• Mobile commerce (m-commerce): The buying and selling of goods and services through mobile devices.
• Microsite: A standalone website with a specific focus.
•  Squeeze page: A type of landing page designed to capture email addresses.
• Popup: A window that appears on top of the current page.
• Overlay: A semi-transparent layer placed over a webpage.