Glossary

This eBook is intended for a broad range of eCommerce  professionals like online retailers, trainee digital marketers and those who are new to eCommerce who need guidance on different terms and eCommerce concepts.

We define, in simple language, the most relevant concepts and terms used every day in the eCommerce ecosystem. It also covers different metrics, and other digital jargon that can seem complex for someone unfamiliar with eCommerceContact the Store Manager if you don't understand a particular term, or have a new suggestion.

A/B Multivariate Testing

Multivariate testing is a process by which more than one component of a website may be tested in a live environment. It can be thought of in simple terms as numerous A/B tests performed on one page at the same time. A/B tests are usually performed to determine the better of two content variations; multivariate testing can theoretically test the effectiveness of limitless combinations. The only limits on the number of combinations and the number of variables in a multivariate test are the amount of time it will take to get a statistically valid sample of visitors and computational power.
  • Multivariate testing is different from A/B testing in a few small but important ways. First of all, A/B testing uses one original and one variable version of a feature, whereas multivariate testing takes into account a number of variables tested simultaneously. Another big difference, albeit debatable, is that A/B testing is reserved for major changes, such as an entirely different landing page or design, while multivariate testing makes many smaller adjustments to an already existing page.
  • For example, your checkout process may be causing a lot of trouble for visitors, and there are a number of different issues with it that aren’t determinable with just one test. In this case you might decide to implement a multivariate test that takes into account the mandatory form fields of the checkout page, the prominence of the shipping and handling policy, the colour of the backdrop, and a new progress bar above each page of the checkout. The results come in with the combination that caused the most successful checkouts, and this is the one you choose to implement.

Abandoned Basket/Cart

An abandoned cart or basket is an incomplete transaction. (Basket is the common UK English term, while Cart is US English). This refers to visitors who add items to their online shopping cart, but exit without completing the purchase.
  • Shopping cart abandonment reasons can be caused by ergonomic difficulties in the buying process, need of an opinion before checking-out , high shipping costs or lack of trust. 
Advanced Search

Advanced search allows customers to used more advanced functions to control the results that are returned to them. For example, some people find this handy when they want to choose a gift within a particular price range. Or perhaps they searching for multiple models of one product.

Affiliate Marketing

Affiliate Marketing is a technique where other publishers and websites will promote your business. Basically the way it works is that an affiliate is rewarded every time a visitor, customer or sale for your business is generated through an advertisement on their web site. There are many different ways compensation is provided, but the concept remains consistent—you pay them for generating business for you.
  • Affiliate marketing is seen as a cost-effective, results-driven way to encourage sales by motivating individuals to earn money through commission. As long as someone has a website and can post a link to a company’s site, they can earn commission based on how many people followed the link and made a purchase.
Alt Text

Alt text (alternative text) is a word or phrase that can be inserted as an attribute in an HTML (Hypertext Markup Language) document to tell Web site viewers the nature or contents of an image. The alt text appears in a blank box that would normally contain the image. Alt text is useful when an image link is not available because of a broken or changed URL or some other issue.

Alternative Payment Options

Not everyone is able to pay by credit card, and some people prefer to pay by one payment type. Allowing multiple payment options removes one barrier to creating a sale. Alternative payments refers to payment methods that are used as an alternative to credit card payments. Most alternative payment methods address a domestic economy or have been specifically developed for electronic commerce and the payment systems are generally supported and operated by local banks. Each alternative payment method has its own unique application and settlement process, language and currency support, and is subject to domestic rules and regulations.

Analytics

Analytics is the systematic computational analysis of data or statistics. Analytics is a multi-dimensional discipline. There is extensive use of mathematics and statistics, the use of descriptive techniques and predictive models to gain valuable knowledge from data - data analysis. It is especially valuable in areas rich with recorded information, analytics relies on the simultaneous application of statistics, computer programming and operations research to quantify performance. Analytics often favors data visualization to communicate insight.

API

(Application Programming Interface) A language and message format used by an application program to communicate with the operating system or some other control program such as a database management system (DBMS) or communications protocol. APIs are implemented by writing function calls in the program, which provide the linkage to the required subroutine for execution.

Average Order Value (AOV)

Average Order Value is a basic but fundamental metric for eCommerce that allows you to track the average amount each customer is spending during a transaction over a specific time frame. It represents the value of an average order within a period of time. It is quite simply calculated by dividing Revenue by Number of Orders in a specific Period of Time.
  • Optimising AOV is one of main sources to increase revenues. It is affected by many things, including the quality of traffic you are attracting to your site and the user experience when they arrive there. eCommerce companies should focus on analysing AOV - especially by way of comparing the different AOVs of different channels and visitor groups - to acquire a top-level overview of their site’s performance over time.
Best Sellers

A best sellers list provides customers with an insight into which products other customers are purchasing. If trying to choose a technical product such as a digital camera a customer would be tempted to buy the most popular, or best selling product, rather than spending time researching the nuances of the different models available.

Breadcrumb Navigation

Breadcrumb navigation is used to help keep track of a viewer’s location within a website - normally a visualised hierarchy of directory pages with arrows showing the direction of navigation. They are a way for users to navigate back to where they were before, as well as jump back several stages in one click, and typically show up at the top of a page when you are delving further into subcategories. 

Bounce Rate

Represents the percentage of visitors who enter the site and "bounce" (leave the site) rather than continue viewing other pages within the same site.
  • Bounce rates tend to reflect non-relevant traffic - people who arrive and find the site is not for them - or usability issues such as slow page loading time.

Browser

Short for website browser, this is a software application that allows users to connect and interact with information on the internet. A browser displays information gathered and organized for users which was sent from a server to display a webpage.

Call to Action (CTA)

Words that urge the reader, listener, or viewer of a sales promotion message to take an immediate action, such as "Write Now," "Call Now," or (on Internet) "Click Here." A retail advertisement or commercial without a call-to-action is considered incomplete and ineffective.
  • Understanding the importance of CTAs will help your messaging stand out and allow your visitors to know exactly how they should act. A product page or advertisement without a strong call to action will be less likely to lead to a sale or other conversion (for example signing up to a newsletter if that’s what you want them to do).
Checkout

eCommerce sites all have checkout pages that allow customers to fill in their personal details and credit card information in order to complete a purchase.
  • The checkout process is undoubtedly one of the most important aspects of a sale. The length and ease of the process, as well as how much information you provide during the different stages can have a big influence on whether a visitor will complete the process or abandon their cart.
  • A one page checkout is what you should be aiming for and always include a guest checkout option.
Click-through Rate (CTR)

Click-through rate (CTR) is a way of measuring the success of an online advertising campaign for a particular website as well as the effectiveness of an email campaign by the number of users that clicked on a specific link. It is an essential performance indicator for online marketing. For example, if 5 people clicked on an advert or CTA out of a total of 50 page views, the click-through rate would be 10%.

Concurrent Visitors

Concurrent visitors refers to the number of users active on your website at the same time. This can be used to monitor the real-time response to marketing campaigns and to test your maximum load on your server.

Content Management System (CMS)

A content management system (CMS) is a computer program that allows publishing, editing and modifying content as well as maintenance from a central interface. Such systems of content management provide procedures to manage workflow in a collaborative environment. These procedures can be manual steps or an automated cascade. Its main purpose is to avoid the need to hard code, and increase the productivity when making changes to your website. In eCommerce it is highly likely that the eCommerce platform you are using will include CMS software in it.

Conversion

A conversion happens when a person successfully takes an action on a website that is linked to further action down the customer funnel. It does not necessarily have to mean a successful purchase of a product; it can alternatively mean that a viewer clicked on an ad that took them to a new promotional page. In general however, eCommerce conversions do indicate completed transactions.

Conversion Funnel

The conversion funnel is the step-based model for sales and marketing. It describes the track a consumer takes through an Internet advertising or search system, navigating an eCommerce website and finally converting to a sale.

It tracks the path to conversion for a specific action, which in eCommerce is typically a transaction, after visiting the site from a particular marketing channel or other source.

It is important to understand your company’s conversion funnel in order to understand how well each aspect of the funnel is working and where there is room for improvement. Optimising your eCommerce funnel will enable a steady increase in conversion rates and revenue.

A conversion funnel differs from the customer lifecycle stages in that the funnel is linear and meant to express measures of customer experience at particular points on the conversion path.

Conversion Rate

The conversion rate is the number of visits to your website that result in a successful completion of a particular action or event. Traditionally, for eCommerce, the action is a transaction. It is used to describe the act of converting site visitors into paying customers. Although different sites may consider a "conversion" to be some sort of result other than a sale. One example of a conversion event other than a sale is if a customer were to abandon an online shopping cart, the company could market a special offer, e.g. free shipping, to convert the visitor into a paying customer. A company may also try to recover the abandoned through an online engagement method such as proactive chat in an attempt to assist the customer through the purchase process.

This fundamental metric is incredibly important in eCommerce as it is directly related to revenue and should be measured as a KPI. Benchmark conversion rates vary per industry. Some, like online flower sellers, can achieve 20% or higher. For retail fashion, average rates vary from 1-3%.

Cookie

A message given to a Web browser by a Web server. The browser stores the message in a text file. The message is then sent back to the server each time the browser requests a page from the server.

The main purpose of cookies is to identify users and possibly prepare customized Web pages for them. When you enter a website using cookies, you may be asked to fill out a form providing such information as your name and interests. This information is packaged into a cookie and sent to your Web browser which stores it for later use. The next time you go to the same Web site, your browser will send the cookie to the Web server. The server can use this information to present you with custom Web pages. So, for example, instead of seeing just a generic welcome page you might see a welcome page with your name on it.

Coupons, Rebates, Promo Codes

A coupon, rebate and promo code is a voucher that entitles customers to receive a discount off a particular product. They incentivise customers to go ahead with purchase, and can be time-limited.

Cross-Sells

Cross-sell is a marketing term for the practice of suggesting related products or services to a customer who is considering buying something. Amazon, one of the most popular online stores, reported that a whopping 35% of their sales last 2006 came from cross-sells. If you're buying a book on their store, for example, you may be shown a list of books similar to the one you've chosen or books purchased by other customers that bought the same book you did. A search on a company's store for bed linens might also bring up listings of matching draperies. The most ubiquitous example of cross-sell is likely the oft-spoken fast food phrase: "Would you like fries with that?"

CSS

Short for Cascading Style Sheets, a new feature being added to HTML that gives both Web site developers and users more control over how pages are displayed. With CSS, designers and users can create style sheets that define how different elements, such as headers and links, appear. These style sheets can then be applied to any Web page.

Customer Acquisition Cost

Customer Acquisition Cost is the cost associated in convincing a customer to buy a product/service. This cost is incurred by the organization to convince a potential customer. This cost is inclusive of the product cost as well as the cost involved in research, marketing, and accessibility costs. This is an important business metric. It plays a major role in calculating the value of the customer to the company and the resulting return on investment (ROI) of acquisition. The calculation of customer valuation helps a company decide how much of its resources can be profitably spent on a particular customer. In general terms, it helps to decide the worth of the customer to the company.

Customer Experience

The phrase used to describe the relationship a customer has with a business. Customer experience refers to the total of all experiences the customer has with the business, based on all interactions and thoughts about the business. Customer experience is an integral part of customer relationship management (CRM), and it is important to businesses because customers who have a positive experience are more likely to become repeat customers and loyal customers of the business.
  • Many eCommerce businesses are now using some type of technology to personalise customers’ experiences on their websites. Some programs are designed to determine where a customer is from, what they have previously purchased or what they have in their shopping basket.
  • You should personalise your company’s interactions wherever you can to optimise the experience on an individual level. This will lead to higher customer retention and easier shopping.
Customer Life Cycle

Customer Life Cycle is a term used to describe the progression of steps a customer goes through when considering, purchasing, using, and maintaining loyalty to a product or service. The stages are not set in stone and differ between different companies and industries. However, normally the stages are as follows:

1. Visitor
2. Lead/Contact
3. Customer
4. LTV - Lifetime value
  • This model helps marketing make decisions about how to acquire and retain customers, as well as having a better understanding of their behaviour throughout a period of time.

Customer Lifetime Value

Customer Lifetime Value is defined as the dollar value of a customer relationship, based on the present value of the projected future cash flows from the customer relationship. Customer lifetime value is an important concept in that it encourages firms to shift their focus from quarterly profits to the long-term health of their customer relationships. Customer lifetime value is an important number because it represents an upper limit on spending to acquire new customers.

This measure is essential as it provides a deeper understanding of how much a particular customer may be worth over time and not just during a single purchase. It also can determine whether marketing should allocate more resources to upholding this relationship or not.

In its most advanced form you can use predictive CLV to determine the value you expect an individual to have over their future lifetime with your company.

Customer Retention

Customer retention is the activity that a selling organization undertakes in order to reduce customer defections. Successful customer retention starts with the first contact an organization has with a customer and continues throughout the entire lifetime of a relationship. A company’s ability to attract and retain new customers, is not only related to its product or services, but strongly related to the way it services its existing customers and the reputation it creates within and across the marketplace.

Customer retention is more than giving the customer what they expect, it’s about exceeding their expectations so that they become loyal advocates for your brand. Creating customer loyalty puts ‘customer value rather than maximizing profits and shareholder value at the center of business strategy'. The key differentiator in a competitive environment is more often than not the delivery of a consistently high standard of customer service.
  • It is essential for every eCommerce company not only to acquire new customers but to keep those who have already converted and make them into loyal, repeat consumers. Most companies spend more money on acquiring new customers than keeping those they already have, failing to realize that repeat customers are more likely to add significantly to a company’s revenue.

Customer Service

Customer service is simply the service you provide to your prospects and customers across all stages of the customer life cycle. It is the provision of service to customers before, during and after a purchase.

Great customer service can take an eCommerce company’s revenue and customer retention sky high simply by nurturing a customer’s experience before, during and after the purchase to ensure satisfaction.

Companies that foster a good working relationship with customers are also more likely to get recommended to others because customers - especially in the UK -are used to receiving mediocre service from online retailers.

Dimension

Dimensions are qualitative attributes of a particular object, they are used to describe that object in greater depth. This is used very regularly when deploying analytics platforms to analyse your data.

For example a product - an object of data - can be given different dimensions such as product category, SKU & product name. These dimensions describe your products so you can perform deeper analysis.

Direct Traffic

Direct Traffic is the flow of visitors onto your site who type your page URL directly into their search bar at the top of their internet browser. Typically, people measure direct traffic by looking at the HTTP referrer for each page view: when you visit a page, your browser usually records the referrer that sent you to the page; if no referrer is recorded then it should mean that you either typed in the name of the page or visited via a bookmark. This metric is important to follow because it indicates the number of people who are familiar enough with your company and website that they don’t need to search for it. They are typically amongst of your highest value customers. 

eCommerce

eCommerce or electronic commerce  is used to describe business that is conducted over the Internet using any of the applications that rely on the Internet, such as e-mail, instant messaging, shopping carts, Web services, UDDI, FTP, and EDI, among others. Electronic commerce can be between two businesses transmitting funds, goods, services and/or data or between a business and a customer.

eCommerce Platform

The basic definition of an e-commerce platform is ‘a software that enables transaction via the internet’. These platforms have quickly developed into comprehensive, all encompassing online retail solutions. Allowing retailers to target, capture, engage and retain customers, through not just the traditional web store, but also via offline, mobile and social media channels.

There are a growing number of eCommerce platforms on the market, and so it is important that you select a platform that corresponds most closely to your company’s needs. You should ask yourself about the relative size and growth that your eCommerce store will see in the future as well as what specific functions are needed to market your products or services.

Email Customer Service Alerts

Service Alerts keep your customers up-to-date with the progress of their order through your fulfillment system.

Exclusives

Creating exclusive offers relies on the scarcity marketing model. This is a psychological principle that shows that if you go to two different websites that offer the same product, you will be more likely to buy one that is seen as more limited or rare. The exclusivity, or scarcity, of the offer can be made through limited the time the product is available, limiting the number of products available or limited the customers you can buy the product.

Exit Percentage

Exit percentage or exit rate tells you how many people leave your site from a particular page. Every visitor that comes to your site eventually leaves it in one way or another. This statistic tells you which pages they are leaving from. To calculate the exit rate, Analytics looks at the total number of exits from each page in relation to the total number of page views for that particular page. It then divides the exits by the page views and calculates the percentage.

This measure can help you understand your website’s user activity and bring to light a particular problem. A high exit rate for a completed transaction page is ideal, whereas on the homepage the exit percentage should be a lot smaller because its purpose is to channel traffic into other areas of your website.

Fraud

Electronic fraud is the crime of using an internet scheme meant to mislead or withhold information from an individual or company in order steal information, money or products.

eCommerce fraud has slowly risen alongside the growth of eCommerce in general, which costs companies many millions of pounds each year. It is inevitable, and systems and software should be put in place to try and minimise this as much as possible. Having a secure website and checkout process is a necessary first step.

Friction

Friction is a term used in the UX/UI design of websites to indicate problem areas in the road to checkout and purchase. It relies heavily on behavioural studies and takes into account technology like eye-tracking software to indicate where advertisements, CTAs and other information should be ideally placed. The less friction there is in a website, the easier the road to conversion.

Fulfillment House

A company that specializes in providing fulfillment services on behalf of a product owner. In addition to providing storage facilities, a fulfillment house accepts, fills, and ships orders.

Many eCommerce companies will enlist the help of a fulfillment house in order to improve efficiency with the least expenditures and hassle.

Fulfillment houses, depending on their size and services, can provide additional services such as keeping track of inventory, handling returns, informing customers of shipping status and product packaging.

Gift Centre / Suggestions / Guides

Some eCommerce stores curate a list of gifts for types of individuals. For example, a clothes store might curate a list of shirts for men, when coming up to Father’s Day.

Gross Profit Margins

A financial metric used to assess a firm's financial health by revealing the proportion of money left over from revenues after accounting for the cost of goods sold. Gross profit margin serves as the source for paying additional expenses and future savings. Without a steady gross profit margin, a company will not be able to expand and take risks in future investments.

The cost of goods sold is the cost to a company to make a unit of any particular product which includes labour, materials etc.

Guest Checkout

Guest checkout is an option provided during the checkout process that allows a user to bypass creating an account for a website in order to purchase a product. Many eCommerce sites have adopted this feature in line with best practice since it is so highly valued by first time customers, and minimises friction on the road to purchase.

HTML

HTML, or Hyper Text Markup Language, is a standard language used for the internet to instruct what colour, font size, graphics and hyperlinks a page should have. A new version, called HTML5, is the next major revision of this universal standard language.

Inbound Marketing

Inbound marketing is promoting a company through blogs, podcasts, video, eBooks, enewsletters, whitepapers, SEO, social media marketing, and other forms of content marketing which serve to bring customers in closer to the brand, where they want to be. In contrast, buying attention, cold-calling, direct paper mail, radio, TV advertisements, sales flyers, spam, telemarketing and traditional advertising are considered "outbound marketing". Inbound marketing earns the attention of customers, makes the company easy to be found and draws customers to the website by producing interesting content.

Inbound marketing is very effective at nurturing prospects into customers by ushering them along the customer life cycle with content that resonates with them personally.

Learning to use inbound marketing tools effectively will benefit many aspects of your eCommerce business, including brand equity and revenue. Inbound marketing is a lot less expensive than outbound and works towards lowering the cost of customer acquisition. It does, however, require a lot more effort and is very time consuming, but its ROI grows exponentially over time.

Inventory

The raw materials, work-in-process goods and completely finished goods that are considered to be the portion of a business's assets that are ready or will be ready for sale. Inventory represents one of the most important assets that most businesses possess, because the turnover of inventory represents one of the primary sources of revenue generation and subsequent earnings for the company's shareholders/owners. Tracking the amount of inventory a company has directly relates to revenue and purchasing decisions. The turnover of inventory should be tracked constantly to make sure enough product is always going out to avoid spoilage costs and warehouse storage overflow.

Keyword

A keyword is a word that acts as a flag or signifier for search engines to F define what a page is about. Using keywords (for example ‘dresses’) or key phrases (‘best deals on red dresses’) is a vital aspect of getting traffic into your site and standard SEO practices define which words are searched most often and consequently boost your site visibility in searches. Long tail keywords or phrases are those with very little search volume, but which consequently don’t have a lot of competition, so are easier to rank for.

Landing Page

Landing page is a single web page that appears in response to clicking on a search engine optimized search result or an online advertisement. The landing page will usually display directed sales copy that is a logical extension of the advertisement, search result or link.

Landing pages are often linked to from social media, email campaigns or search engine marketing campaigns in order to enhance the effectiveness of the advertisements. The general goal of a landing page is to convert site visitors into sales or leads. By analyzing activity generated by the linked URL, marketers can use click-through rates and conversion rate to determine the success of an advertisement.

Landing page experiences are important because they can determine how well an advertisement was placed and whether it was relevant to the target customers. This will affect advertising costs and placements. Landing pages need to be highly relevant to what an ad is actually promoting, so that a customer is not confused when they are redirected.

A good landing page that follows naturally from an ad and that compels customers to perform a desired action will in turn lead to higher conversion rates and customer satisfaction.

Marketing Attribution

Attribution is the process of identifying a set of user actions (“events”) that contribute in some manner to a desired outcome, and then assigning a value to each of these events. Marketing attribution provides a level of understanding of what combination of events influence individuals to engage in a desired behavior, typically referred to as a conversion.

Attribution models can be very complex and take into account factors like type of touch point (URL or print ad), visit length, number of pages viewed, and type of device used (computer, cellphone, tablet).

A simple example of an attribution model is one that splits the value of any conversion evenly between all marketing channels used prior to the conversion but after any previous purchase by the same visitor. A more sophisticated example would take into account touch points from the very start of that customer’s relationship with the company.

Merchandising

Merchandising is any practice which contributes to the sale of products to a retail consumer. At a retail in-store level, merchandising refers to the variety of products available for sale and the display of those products in such a way that it stimulates interest and entices customers to make a purchase. In eCommerce these practices are largely focused online. It includes pricing, advertising, visual display, product descriptions, customer reviews, and offers, among others.

Online Merchandising cannot be recommended highly enough as a way for eCommerce companies to attract the attention of customers and entice them to make transactions.

It is also important to understand when and how to merchandise your products and services. For example, certain seasons will call for different clothing in fashion retailers, such as coats for winter and shorts for the summer.

Metric

Metrics are measurements that can be applied to aspects of a dimension; they display data in a quantitative way and are used to analyse the raw data gathered from websites, apps etc in an actionable way.

Data such as click-through rates, total visits, page views, bounce rates, time per visit and exit percentages are all common metrics used in web analytics.

Mobile

The term ‘mobile’ is most commonly associated with mobile phones, however in eCommerce it now has a wider connotation that includes tablets and e-readers.

In marketing terms, mobile devices are essential channels to market for online retailers because more and more people get their product/service information and make transactions from these electronic devices.

Multi-Channel

Multi-channel marketing is the process of using many different channels, both online and offline, to target current and prospective customers. This may include email, social media, print ads, TV commercials, sponsorship, among a host of others.

The importance of multi-channel marketing is that it allows eCommerce companies to gain conversions from a variety of sources, and this heightened availability increases customer satisfaction and retention.

Multi-channel marketing also allows you to test other channels and find the best performing combination.

Multiple Ship-To Locations

Shipping to an alternative location other than the customer’s billing address. This allows customers to send products that they purchase either to a friend, or to their office, instead of home.

Non-Seasonal - Promotional Offers, Sales, or Specials

Non-seasonal promotional offers generate a bit of buzz and excitement in your store, and create a focal point for engagement with your customers. These promotions are not necessarily tied to a seasonal event such as Christmas or Valentines’ Day. They are usually plastered on the your store’s homepage, enticing visitors to learn more about the offer. Aimed at temporarily increasing sales, non-seasonal promotional offers can be utilised to rid of old stock, and reignite interest among your existing customers.

Omni-channel Marketing

Omni-channel marketing is very similar to multi-channel, but differs in one major aspect. Whereas multi-channel marketing just aims to interact with customers on multiple channels, omni-channel does this by creating a consistent and seamless experience across all channels and devices.

What this means is that you can walk into retail shop XYZ to try on a t-shirt, then look it up on their online store for a different color with your iPhone, purchase it online from an in-store iPad, and get it delivered to a nearby store so you can pick it up during your lunch hour.

Omni-channel marketing requires considerable financial and time commitment of resources, software and processes in order to create an optimal experience.

Sales, Marketing, and Customer Service teams must all be aware of up to date product news, inventories, marketing campaigns and deals, which requires sophisticated tracking software as well as seamless communication across the whole company.

Organic Search

Organic search is a marketing channel that attracts users via non-paid search results on search engines, the result of a visitor typing in a particular keyword or phrase. The results are displayed via search engines in a prioritised order based on the relevance of a search term to specific webpages on the internet.

Organic search results are improved via SEO techniques.

Outbound Marketing

Outbound marketing is different from the increasingly popular inbound marketing method in that it focuses on harder selling techniques such as cold calling, email campaigns, advertisements, print ads and sponsorship. These techniques attempt to catch the attention - literally ‘interrupt’ - the consumer rather than attracting them more naturally.

Gaining customers in this way has been a tried and true method for as long as advertising has been around.

Today we have to deal with a massive amount of information on a daily basis and consequently we have become very good at blocking out information. The result is that outbound marketing techniques no longer yield as much of a return on investment (ROI).

Pageview

A pageview is simply the successful completion of loading a webpage. After it is loaded, it is safe to say that the page has been viewed by the individual who requested it via their browser.

Marketing departments use this figure to determine how much traffic a specific page on a website is generating. Use cases include helping analyse the optimal placement of ads and finding pages that are achieving below average pageviews.

Paid Search

Paid search refers to any search process where results are dictated by payment from advertisers. However, many associate the term paid search with pay-per-click (PPC) advertising, a specific kind of business relationship where advertisers pay search engines or other Web hosts when ads are clicked, which gives the host entity incentive to display the ads as search results.

Payment Gateway

A payment gateway is an eCommerce application service provider service that authorizes credit card payments for e-businesses, online retailers, bricks and clicks, or traditional brick and mortar. It is required in combination with a merchant account to authorise payments for online retailers and websites. It is usually run by a third party and acts as a link between the merchant and a customer’s bank account. Payment gateways will process, verify and accept/decline credit cards as payment to a merchant.

Product Customisation, Personalisation

This function applies to the sale of products that fit naturally with customisation options, such as customising a computer with a particular hard drive size. Some novelty products also rely on customisation, such as adding the customer’s name to a t-shirt.

Product Ratings, Reviews

Product reviews provide social proof for an eCommerce store that their service and products have (or have not) been well received by previous customers.

Product Recommendation Engine

Product recommendation engines, or systems, use software to create personalised product recommendations based on previous transactions and user behaviour, which are subsequently promoted to users via email, websites etc. Amazon.com for instance, takes into account what you have in your basket and previous purchases together with what other people have bought with those items to recommend further products that you may like to view or purchase.

When implemented effectively, product recommendation engines are very successful - indeed essential if you want to create the best possible experience when people shop online.

Referral Marketing

Referral marketing is a method of promoting products or services to new customers through referrals, usually word of mouth. Such referrals often happen spontaneously but businesses can influence this through appropriate strategies, but in eCommerce it means incentivising third party online channels to refer visitors to your website. 

Referral marketing normally involves some payment or incentive to the referring channel.

There are ways that referral marketing can be promoted virally - like getting customers to refer friends - for example through such offers as ‘refer 5 friends and get 50% off your next order’.

Referral Traffic

Referral traffic is used to describe visitors to your site that come from direct links on other websites rather than directly or from search engines. For example, other sites that like what you have to say or sell may post a link recommending your site. You can also try to drive your own referral traffic by leaving links on other blogs or forums you have joined. Pay-per-click ads also count as referral traffic.. These referrals can be tracked using the domain names or pages that are directing that traffic, and ideally an eCommerce company, using analytics software, should keep track of these sources and the volume of traffic referred, as well as its quality and propensity to convert, so that they can accurately calculate ROI.

Return

A return is when, for whatever reason, a customer returns a purchase to the store for store credit, a refund or an alternative product.
  • This is an inevitable situation which must be prepared for and managed accordingly. Minimising returns is critical to long term success.
  • However, fashion retailers must understand their customers’ behaviour as well. Online shoppers will buy extra items and return the ones that didn't fit, so a good shipping and returns policy is vital to scaling an online fashion store.
  • Some cultures and countries typically see higher percentages of returns than others - for example Germany, where it is common practise to order a range of sizes and colours and return all but the right fit.
Revenue

Revenue is one of the top level eCommerce KPIs for managing performance. It is simply the total income received over a specific period of time, which in eCommerce is normally total online sales.

Revenue can be taken as a total value, or it can be subdivided according to time frames (daily, weekly, monthly). It can also be divided further into revenue per visit, or per customer, which is very useful for deeper analysis. Knowing how much revenue your company is making is a basic but important measure that can be compared against your strategic revenue goals, marketing techniques and expenditures to determine your company’s trajectory of success and areas of opportunity.

Monitoring revenue alone, however, can be misleading - it’s profit that really matters, and that requires taking into account margin.

Revenue Per Visit (RPV)

Revenue per visit is simply an average of how much a website makes in sales each time a customer visits your store.

Revenue per visit is a great metric to measure the relative performance of various marketing campaigns.

Search Engine Optimisation (SEO)

Search engine optimization is a methodology of strategies, techniques and tactics used to increase the amount of visitors to a website by obtaining a high-ranking placement in the search results page of a search engine (SERP) -- including Google, Bing, Yahoo and other search engines.

SEO helps to ensure that a site is accessible to a search engine and improves the chances that the site will be found by the search engine. Learning how to manage SEO is vital to attracting relevant traffic to your site.

Seasonal - Promotion offers, Sales or Specials

Seasonal promotions are tied to events or periods of the year, such as Christmas, Valentine’s Day, End of Financial Year, and even the start of Winter or Summer. They often showcase products or services, or a set of both that customers might find beneficial at the moment. For example, a store might offer free shipping for multiple orders during Christmas Season.

Segmentation

Segmentation is used regularly in analytics, and refers to the process of segmenting or dividing up your data into manageable groups. This allows you to focus on and analyse certain parts of your data such as previous customers, only traffic from paid search or even more complex segments.

Segmentation is vital for deeper analysis of your data and is one of the most valuable tools to gain deeper insight into your business.

Shopping Basket/ Cart

Although most internet users would recognize this term, the technical definition of a shopping basket or cart is a piece of software on a server hosting an eCommerce site that allows customers to group and save certain items together for eventual purchase.

Site Search

Site search or on-site search refers to the process of performing a search, like someone would on a search engine, but on a company’s website. The search field is normally located on the landing or home page and ideally on every page, and allows users to search for certain key terms, products or codes on an eCommerce site.

Optimising your company’s site search options allows customers to quickly and easily find what they already have the intention to seek out, and therefore are more likely to purchase.

It is worth performing regular tests on your site to see which keywords or products people are searching for.

SKU
A stock-keeping unit, or SKU, is an identification code that, in eCommerce, is used to uniquely identify an individual product. Any different attribute gets a different SKU, for example there are different SKUs for any colour or size variations of the same base product. SKU’s are often in the form of unique bar codes which can be scanned and used for inventory and accounting purposes.

It is important to track SKUs because this will allow you to see how many units you may have in warehouse versus how many in retailers, or how many of each color you may have in stock for a larger customer who wants to buy in bulk.

Supply Chain Management

Supply chain management (SCM) is the management of the flow of goods. It includes the movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption. Interconnected or interlinked networks, channels and node businesses are involved in the provision of products and services required by end customers in a supply chain.

Having good supply chain management is essential to any eCommerce company for reducing production costs while ensuring that products are being led efficiently from each point of production to retail sale.

Transaction

A transaction is an agreement between a buyer and a seller to exchange goods, services or financial instruments. This includes online sales through eCommerce sites but also includes retail and service exchanges. Transactions your company makes during a length of time (day/week/month) are a core factor in determining how much revenue you will produce for that period.

Up-Sells

Up-sell is a marketing term for the practice of suggesting higher priced products or services to a customer who is considering a purchase. The most ubiquitous example of up-sell is likely the oft-spoken (if ungrammatical) fast food phrase: "Would you like to super-size that?"

URL

A URL, or Universal Resource Locator, is the address of a page on the internet. It usually begins with http:// and allows a website to be located.

Visitors (Unique visitors)

The number of visitors is an important metric that tracks how many unique people have entered a website in one session. They are recognised through cookies, which can provide data on whether or not this is a new visit or a return visit in a defined amount of time. Visits are often grouped into ‘unique O visitors’ and ‘visits’ (see below) when tracked over a certain period. ‘Visits’ may count individuals more than once if they have visited more than once in P the time period, while ‘unique visitors’ counts them just once.

Visits

Visits are simply the cumulative quantity of sessions on your site over a defined period of time. A new session begins when someone loads one of your webpages and finishes when they exit your site.

Visits are instrumental to revenue. No visits means no revenue. However do not obsess over visits as sometimes it is more logical to focus on increasing AOV or conversion rate.

The goal is to get the highest quantity of visits at the lowest cost whilst maximising the relevance of the individuals you are attracting to ensure you maintain good conversion rates.

Web Analytics

Web analytics is the measurement, collection, analysis and reporting of internet data for purposes of understanding and optimizing web usage.

Web analytics is not just a tool for measuring web traffic but can be used as a tool for business and market research, and to assess and improve the effectiveness of a web site. Web analytics applications can also help companies measure the results of traditional print or broadcast advertising campaigns. It helps one to estimate how traffic to a website changes after the launch of a new advertising campaign. Web analytics provides information about the number of visitors to a website and the number of page views. It helps gauge traffic and popularity trends which is useful for market research.

Web Hosting

A web hosting service is a type of Internet hosting service that allows individuals and organizations to make their website accessible via the World Wide Web. 

Good web hosting is essential for eCommerce companies to ensure that their website performs well with traffic spikes, and minimises downtime.

Webmaster Tools

Webmaster tools help a website improve its site ranking in search engines. For example, Google provides statistics and alerts if a site is not performing optimally in search.

Website Traffic

Website traffic is the amount of visits that a website generates over the course of a specific time.

A steady stream of traffic to your site is a good indicator of healthy eCommerce activity, as well as brand awareness.

It is important to understand what times of day/week/year a website generates the most traffic so as to reduce the possibility of website crashes or slow running and uploading times.

Widget

A widget is a small piece of software or code that can be incorporated into a website, app or other technology asset. Widgets in eCommerce may include social media sharing, small analysis tools, advertisements, videos or other
simple functions.