If having a conversion with an eCommerce professional has left you scrambling for a dictionary, you aren’t alone! In an industry that’s relatively new and constantly evolving, professionals have started to use words with pre-existing definitions in new ways, or even invented terms themselves. From describing functionalities, to basic business strategy, the vernacular of an eCommerce professional is robust to say the least.
Here at Demac Media we realized that in some of our interactions that the terms we throw around with ease and drop daily in-office, are practically unheard of by those who may just be tapping into this exciting industry. If our tech-talk has your head spinning, we’d like to make your life a little easier by bringing you our eCommerce Glossary of Terms and Definitions for Merchants. A read-through of the glossary might help you gain better insight to how our industry operates, or better yet, to use this blog post as a quick reference guide for the times when a phrase throws you off your A-game!
Related: The Anatomy of an eCommerce Site
eCommerce 101 & Strategy
Software & Technology
Design and UX
Shipping and Fulfilment
eCommerce 101 & Strategy
eCommerce vs Commerce
‘eCommerce’ is the abbreviated version of “Electronic Commerce”. Where the word ‘Commerce’ is a general more inclusive word that describes transactions and interactions from multiple channels both online and offline.
Business to Business (B2B)
The business model and process of one company selling to another.
Business to Consumer (B2C)
The business model and process of a company selling to direct consumers
Business to Business to Consumer (B2B2C)
The business model of when B2B companies create digital strategies and go directly to a business where there is a known engagement with customers, or go directly to consumers themselves.
Bricks and Mortar
A business that has a physical store location (or multiple locations) where merchandise can be purchased.
A person or company that buys goods in large quantities from various vendors with the intention of selling them to resellers who then sell to direct to consumer. Distributors and wholesalers usually work together as channel partners.
A person or company that makes goods for sale.
Customer Lifetime Value (CLV) or Lifetime Value of a Customer (LTV)
The prediction of future revenue, net profit and value that a customer will generate during the entire relationship with a merchant.
Only one metric in a series of other measures that asses the health of your eCommerce business. It is calculated by dividing the number of people who complete a particular action by the number of visitors to a particular page/process.
Conversion Rate Optimization (CRO)
The process of improving the user experience of a website with the goal of increasing the percentage of visitors that convert into customers.
A holistic approach to eCommerce growth. It is about user centric design, technical implementation, applied statistics, web analytics, and most importantly a dedication to continuous improvement through a cycle of testing and learning. It requires a curiosity to constantly identify new opportunities for improvement, develop hypotheses, and test solutions.
Landing Page Optimization
The process of creating, monitoring and tweaking landing pages to maximize the conversion of traffic.
A research and data based, semi fictional representation of your ideal customer.
Targeting your most profitable customer and those with the highest profit potential. These can include frequent shoppers, high average order values, few returns, customers that provide reviews, responsive customers (ie. respond to special offers and promotions).
A/B Testing (aka Split Testing)
A/B testing splits traffic into two different variations of a site. This allows marketers to test how specific changes impact behaviour on a site, independent of things that can also impact behaviour like promotions etc.
Shopping Cart Abandonment
The term applied to a customer after they browse a site, add products into their shopping cart, and at checkout leave the merchant’s site without completing their purchase.
A buzzword and strategy where individuals use creativity, analytical thinking and social metrics to sell products, gain exposure and grow by exploiting low cost and innovative alternatives to traditional marketing.
The ability to sort and group together products on a category page.
Strategies that encourage customers to keep coming back to your store to purchase more goods by creating positive, personalized and fun buying experiences.
The day that follows Thanksgiving Day in the United States and traditionally, starts the Holiday shopping season. Retailers typically offer promotions and major discounts on all products in their stores (both online and offline). The majority of physical retailers also adjust their opening hours to encourage an early shopping ‘frenzy’.
Cyber Monday is the term used to describe the Monday after Black Friday. As Black Friday is traditionally known for in-store discounts and promotions, Cyber Monday was created to encourage consumers to shop online. However, retailers take advantage of the whole weekend, by beginning their promotions (both online and offline) on Black Friday through until the end of Cyber Monday.
A term that was invented by eBay in 2007 to describe its best sales day in December. It usually occurs on the 2nd Monday of December.
Free Shipping Day
A one-day event that occurs on the third Monday of December. On this day, participating merchants and retailers offer free shipping on in-stock items that guarantees the delivery of orders by Christmas Eve
The last Saturday before Christmas Day. It acts as a major driver of revenue for retailers being that it occurs on the last full weekend ahead of Christmas. It also marks the end of the shopping season that most consumers believe begins on Black Friday. Super Saturday lives up to its name, as it offers consumers major one-day sales in an effort to accumulate more revenue during the holiday season.
Also known as Sofa Shopping, this refers to consumers shopping online with a laptop or mobile/tablet device while on a couch or in bed during later evening hours, usually between 8pm – 12am.
The act of visiting a Brick and Mortar store to see a product but instead purchase it online. Consumers do this to be able to touch and feel a product before buying and then seek out a better price online.
Monitor shopping is a play on the term “window shopping”. Consumers are now using their computers and mobile devices to surf the web much like they use to peruse malls and window shop, only now it involves browsing various online stores without buying anything.
The use of social networks and social interaction (e.g. Facebook, Twitter, Pinterest, etc) to encourage consumers to buy products and services online. This term was coined by Yahoo in 2005, but the concept was further developed by David Beisel who explained that if a friend or someone you know is recommending you to buy a product or service, you are more likely to buy it.
Software and Technology
A collection of hardware and software systems that support your eCommerce ecosystem. This can include your servers, what you’re running on your hardware, the configuration and security of those elements and ensuring its availability and access online.
Automating costly manual business processes by syncing a merchant’s eCommerce platform with other business systems such as an ERP system, accounting and inventory management softwares.
Enterprise Resource Planning (ERP) Software
Integrated business management software that helps organizations automate processes related to product planning, manufacturing, marketing and sales, inventory management, finances, shipping and human resources.
Point of Sale (POS) System
Where retail transactions are completed. Traditionally they comprised of cash registers, as well as a debit/credit card reader. However modern POS systems can offer merchants more complex functionality such as inventory management, CRM, financials, warehousing etc.
Warehouse Management System (WMS)
A software application that supports day-to-day operations in warehouse. It controls the movement and storage of goods and processes the associated transactions which can include receiving, tracking stock levels, picking, packing, and shipping.
Inventory Management Software
A software application that tracks inventory levels, orders, sales and deliveries. I can also be used in a B2B setting for manufacturing where it can be used to create work orders, bill of materials and other production related documents.
3rd Party Logistics (3PL)
A firm that provides outsourced supply chain management and logistics services to its customers.
A comprehensive web based ERP solution that helps to manage a business’ operations, finances, eCommerce and customer service.
A service that allows individuals or companies the ability to make their websites accessible on the internet. A web host provides space on a server that is owned or leased by customers for use and connectivity to the web.
How to categorize and structure information such as labelling systems, navigation systems and search systems.
An agreement, or contract that determines the use and/or redistribution of software. Licenses can either be proprietary or free and open source.
Software as a Service (SaaS)
Software or applications that are hosted by a vendor and made available, on-demand through the cloud.
A term given to software whose original source code is made available to the public, and it may be modified, changed and/or redistributed.
An open source eCommerce platform that allows merchants and developers to create rich and flexible eCommerce websites. The customization and functionality of Magento can be further enhanced through Magento Connect, a massive extension marketplace. Magento is also backed by a global community that has sparked a passion where its members continuously share, improve and learn about the platform, pushing Magento to new frontiers and causing it to evolve over time.
A SaaS based eCommerce platform that makes commerce better for everyone. Merchants both large and small utilize Shopify to manage every aspect of their business from products to orders, selling online, in retail stores and on the go. From custom templates to fresh designs, Shopify can easily turn your vision into reality and helps eCommerce businesses launch in no time.
A third party company appointed by a merchant to handle credit card transactions for merchant acquiring banks.
The online equivalent of a cash register connecting websites to credit card carriers so that online credit card transactions can be completed in real time.
Essentially a bank account used to hold funds obtained from a credit card purchase. Store owners have to apply for a merchant account.
Manual Payment Systems
Allow merchants to accept manual forms of payment e.g. Mail Order, Direct Deposit, and Cash on Delivery (COD).
The process of building a site from scratch and completing any necessary tasks before taking a site live. This includes everything from setting up your eCommerce platform to placing your installation on a server and ensuring its proper configuration, to skinning and setting up integration if needed and making sure your site is being indexed correctly on search engines.
The customization of a website. From adding modules to making a site perform different functions, to creating a theme for a site, development is all about the configuration, customization, and changing of architecture to suit a merchant’s needs.
Is a term given to signify a time period where no major changes get promoted to your website.
A programming language that can be interpreted by web browsers that allows for programatic manipulation of the browser window. This can be used to achieve common effects like modal windows and drop down menus, as well as perform more complicated operations, such as making requests to the server without refreshing the page.
A server-side, or back-end, programming language that is both powerful and easy to use for the web. It is one of the most popular languages used for the web and has been used to create many powerful web frameworks, including Magento.
A markup language commonly used to define configuration in a way that an application can interpret with ease.
Stands for Hypertext Markup Language, and is the a set of markup symbols or codes that tells a browser how to display a web page’s font, colour, graphics, and hyperlink effects.
Stands for Cascading style sheets which are rules that define the look and style of elements such as font size, weight, style, colour, width, height, border, alignment etc.
A text file that is a simple way to send and receive data which is both easy to read and process.
There are two local.xml files that are commonly used in Magento. The first is app/etc/local.xml which contains the main configuration for the Magento installation. This includes database connection configuration settings, cache configuration, session storage, encryption keys, and the admin (backend) URL path – this file is generated automatically when the application is installed via the installation wizard and should NEVER be modified unless the user has a full understanding of what they are doing. Also, since the file contains sensitive data, it should not be accessible via the web and set with proper permissions on the server. The second local.xml is used as a layout override file. This is located in app/design/frontend/[packagename]/[customthemename]/layout/ and should contain any and all layout modifications made to the base Magento theme. The best practice is to use ONLY this local.xml file for theme-specific layout modifications, rather than overriding magento default layout files. The two files share one notable thing in common (aside from their names and formats): both are the last configuration file loaded by Magento, meaning any configuration made in these files will overwrite any base configuration loaded previously. this is meant to allow the user full control and ensure their modifications actually take hold.
An individual that aims to achieve autonomous data synchronization between two points, in our case between Magento and a client’s ERP system. It is to ensure product/order data is in sync with each other between two systems.
Certified Magento Developer
An individual that has completed and passed the Magento Developer exam and can skillfully use all business processes in Magento such as: structure of a catalog, indexes, promotions, price generation logic, architecture of a checkout, payment/shipment methods, sales/order processing, forms/grids full functionality, API, widgets etc. Certified Magento Developers are able to make design decisions on the code level which include how to parse data files, steps of imports, data verification, etc.
Certified Magento Developer Plus
An individual that has completed and passed the second level of the Magento Developer certification. A Magento Certified Plus Developer can skillfully use Magento Enterprise and has delved into the details of its structure that many have not often explored, but which can give someone an advantage when implementing a site using Magento.
Certified Magento Front End Developer
An individual that has completed and passed their Magento Front End Developer exam and demonstrates an understanding of Magento’s theming components and the ability to modify the user interface according to best practices.
Certified Magento Solutions Specialist (MCSS)
An individual that has completed and passed their Magento Solutions Specialist exam and demonstrate an understanding of Magento’s functionality to eCommerce business goals according to best practices.
Project Manager (PM)
A technical/account manager who is the main point of contact for customers relating to project delivery and ongoing operations.
Project Management Professional Certification (PMP)
A credential that is the most important industry-recognized certification for project managers. This certification recognizes the competence of an individual to perform in the role of a project manager, specifically in leading and directing projects.
A parent product is a configurable product, and can have many different options. For example a configurable product could have multiple sizes and/or colours.
A child product is also called a simple product. A child product of a parent product will be one that has specific instances of various attributes. For example if you have a configurable product of a t-shirt, configurable by size, then 3 simple products are t-shirt small, t-shirt medium, and t-shirt large.
More than one product together, they all must be added to the cart together. Bundled products can have many configurable products together, and therefore consist of many simple products together. Therefore, when adding configurable products to your cart, you are actually adding the configurable product and simple child product.
Similar to bundled products, grouped products are more than one product together. Grouped products however can only consist of simple products. With a grouped product, the user can select which child products they want to add to the cart
The search bar usually located in the top right hand corner of a website. It is usually the second most visited area of any website.
A category listing page that is filtered by specific attributes, often by price or brand. Therefore only products by brand X will show if that filter is selected.
A list of items customers can create on a merchant’s online store where by they add products they want or wish to buy. It can be a point of reference for future purchases.
A special kind of wishlist, whereby customers create a list of items they would like to receive as gifts from family and friends
Magento’s online extension marketplace where merchants can find extensions to customize and enhance their online stores. It is the largest eCommerce application marketplace in the world. It consists of over 5,000 extensions both paid and free that help extend the core functionality of Magento’s platform.
A group of files that can customize, extend and enhance the core functionality of Magento’s platform. Specifically, extensions can improve customer experience, integrate your store to other applications, and help run your business which can ultimately help to drive more sales.
A plugin that can be installed (free or for a fee) that enables new features, or services for your Shopify store.
A gift card provider that issues and accepts gift cards.
Design and UX
Conversion Centric Design
It’s an in-house logic that drives all of our eCommerce design efforts. It starts with user-centric design and offering the most easy, intuitive and user-friendly shopping experience. It’s then evolved with sanity checks from our retail strategy department who focus on amplifying the assets that drive conversions and also deleting any potential barriers to purchase. The result is a beautiful, captivating design, and one that is rich with conversion methodology.
User Experience (UX)
User Experience (or UX) refers to how a person feels when interacting with a website, application, device, or other computing system. These perceptions are conceived based on the way the content, design and functionality affect the overall usability.
User Interface (UI)
A user interface (or UI) refers to the way in which you accomplish tasks within a website, application, device or other computing system. This could include buttons, fields, icons, menus, or any other elements the users interact with. The user interface has a great impact on the user experience.
An individual that plans the form and workings of a site before it’s built. They are not only responsible for creating a design that’s aesthetically pleasing to the target market, but more importantly a site that is functional and easy to use
Detects a user is viewing a website on a mobile device and redirects them to a different version of the design. It uses a slightly different URL – often, m.yoursite.com or mobile.yoursite.com. Usually the code will detect the user’s device and automatically re-direct them or it may offer the user a choice of switching to the mobile version.
Responsive is a method of building a fluid layout which shrinks and grows as a browser is resized. Unlike mobile websites detecting the device, responsive detects the dimensions and resizes the elements accordingly in order to give an optimized visual for the user. Responsive design can also make drastic changes once resized to mobile in order to adapt to the habits of mobile phone surfers (e.g. hidden menus or touch screen attributes).
A guideline for fluid and fixed width systems for all HTML blocks to follow. A grid consists of columns, whereby a block’s width is measured by said columns.
A representation of your business, that helps create or bolster your brand as well as build trust among your visitors to help convert them into buyers.
Grouping of products that have something in common.
A category within a category. Usually the child of a parent category. A general category, can have many subcategories.
Product Page (aka Product Detail Page)
Where site visitors make the decision to become a customer and is framed around 3 parts: how it’s designed for your customer, that less is more, and you should test everything. Your product pages should include calls to action, trust signals, a little friction (to make them linger), beautiful photography and unique and honest copy.
The page that displays all products and quantities within a customer’s shopping cart, and encourages them to click through to start the checkout process to finalize their purchase/order.
Order Confirmation Page
The page where details of a customer order is provided, and acknowledging next steps in their buying process, which is usually to state that the customer will receive an order confirmation email with the same details.
One Step Checkout
A fast and easy method to purchase. The idea is to get the customer through the checkout quickly, painlessly and avoid them having to load multiple pages or be overwhelmed by many steps. What it’s good for: lower price points, flash sales, tech savvy customers, frequent repeat purchases, and mobile shoppers.
Steps are broken up over multiple pages, with an indicator letting consumers know what step in the checkout process they are on and how many are left. This is meant to simplify the overwhelming checkout experience and allows customers to focus on one step at a time.
The hybrid between one step and multi-step, the checkout steps are broken up and live under headings all on one page. Only one section is shown at a time, while the others remain hidden. When step one is completed, step two is revealed, presenting the info in bite sized amounts without having to wait for a new page to load.
Single Click Checkout
Allowing customers to make an online purchase with a single click. Payment information, billing and shipping addresses must have already been previously entered.
The ability for a customer to checkout without have to create an account and password.
The process of displaying and promoting goods for sale either physically in a store, or virtually online.
Selling a related or complimentary product to a customer to entice a larger order value.
Enticing a customer to buy more expensive products, an upgrade or add-ons with the hopes of increasing their final order value.
A detailed account of what a customer has ordered in the past.
Special deals or discounts that are applied for a specific time period, and/or on certain products to entice customers to buy.
Outlines what product prices should change, and when, usually on a promotional basis. There are two kinds: catalog pricing rules and shopping cart pricing rules.
Catalog Pricing Rules
Change the price displayed on products when browsing a catalog on a site and applicable for as long as the rule is active. For example, a rule could be “All products in Category X are on Sale for Y% off”.
Shopping Cart Price Rules
Price changes based on the items in a user’s cart. These rules don’t activate until all conditions have been met. For example, “if purchasing from category X and category Y, offer Z discount”.
Shopping Cart Abandonment
The term applied to a customer after they browse a site, add products into their shopping cart, and at checkout leave the merchant’s site without completing their purchase.
Customer Ratings and Reviews
A summary of a customer’s liking or disliking of their buying experience with a merchant. This can relate to the company itself, the products purchased and/or their overall experience. These are usually listed underneath products with a rating system, found on forums, or social media. They can be critical in convincing other customers to buy, and conversely also quite powerful in they can deter potential customers from completing their transaction.
Shipping and Fulfillment
The process of receiving, packaging, and shipping orders.
Offer customers shipping at zero cost. However, “free shipping” isn’t actually free. Somebody has to pay for it, so merchants will need to either absorb those costs or increase the product prices to cover it. For some companies, this may not be the best option. In this case, merchants can use a form of free shipping such as “Free Shipping over X Amount” to at least ensure higher purchase orders.
Real Time Shipping Quotes (aka Live Rates)
Current estimated rates to ship an order to a customer based on their location.
Flat Rate Shipping
Charging a set amount for shipping an order. Merchants can offer standard flat rates for every kind of package or it can vary along ranges of weight, purchase order amounts, or delivery regions.
Real Time Shipping
When customers receive live quotes calculated based on what is in their carts. However, having to calculate shipping costs at the checkout lengthens the conversion funnel and longer conversion funnels mean lower conversion rates. Shopping cart abandonment can result from shipping price shock.
Managing the flow of goods where the retailer does not keep goods in stock. Customer orders and shipment details are transferred to either the manufacturer or a wholesaler, who ships the goods directly to the customer. Retailers that drop ship show customers their products by using “display items” in stores or by using a catalog or website of their products.
Search Engine Optimization (SEO)
Best practices for web content producers to help boost rankings for keyword search terms in the organic listings of a search engine results page
Search Engine Marketing (SEM)
Paid internet marketing used to increase visibility of websites in Search Engines.
Search Engine Results Page (SERP)
The listing page a user is directed to when performing a search on a search engine such as Google, Bing or Yahoo.
Internet marketing platform used for SEM on the Google search and display networks
Google Webmaster Tool
Allows webmasters to view the health status of their websites. This includes indexing status, page errors, server errors, organic keyword click through data and impressions.
Pay Per Click (PPC)
An advertising method for internet marketing where advertisers pay publishers for every click received on their ad.
Cost Per Click (CPC)
Same as PPC, the actual cost per click is factored into how much the advertiser bids on specific keywords and the relevancy of the ad to the landing page destination
Click Through Rate (CTR)
Percentage of people who clicked through an ad based on the number of impressions. Formula: Clicks / Impressions = Click Through Rate
Product Listing Ads
Display product images and prices in search engines results page (SERP)
Google Algorithm Updates
A public update released by Google that consists of a new algorithm that improves search results. Google Algorithms are usually named after animals, some famous updates include: Penguin, Panda, Hummingbird and Pigeon.
Search queries used to trigger search results organically or paid. One keyword represents a single search query, while keywords with two or more words are consider keyword phrases.
The practice of finding relevant and actual search terms to be used for content (ie. urls, blog posts, content pages, product descriptions etc). Keyword research is beneficial for elevating your search engine ranking.
Keywords that correlate to a company’s brand or product’s name.
These tags are used to define HTML headings. The H1 tag represents the beginning of a new section and incorporates your primary target keywords which should align with both your page title and URL.
A snippet of text displayed in the search engine results page under the clickable page title link. The Meta Description is a 160 character description of the destination landing page
Also references as the title tag, the page title appears in the search result pages, window title bars and bookmark lists. Page titles should be under 70 characters to comply with what Google displays in its search results.
A permanent redirect from one URL to another.
404 Error Page
A page that no longer exists.
List of pages of a website accessible to crawlers or users. Site maps are submitted to Google in order for websites to become indexed.
Communicating with your customers on a personal level directly to their inbox, by offering them promotional offers, content, or information on special events.
The number of individuals that open your email out of the total number of people that your email was sent to. This number is represented as a percentage.
The number of individuals that click a link or CTA within your email out of the total number of people that your email was sent to. This number is represented as a percentage.
When an individual removes themselves from an email database, and therefore stops receiving promotional content from a company. Unsubscribing is an act from an individual that is a consumer or individual that requests you do not contact them.
Call to Action (CTA)
Is a shape, button, text or image that instructs an individual with urgent phrases or words to perform an action. CTA’s are visually prominent and can be included on web pages, emails and on social media posts.
Canadian Anti Spam Legislation (CASL)
The Canadian Anti Spam Legislation came into effective as of July 1st 2014. It is a law that establishes rules for individuals and businesses (corporations and not-for-profits) sending commercial electronic messages to Canadians. These can include emails, SMS text messages, instant messages, and messages sent through social networks. It was intended to promote efficiency by establishing clear rules for consent in electronic communications. The most important factor impacting your email marketing program is consent and the type you have. There are two kinds of consent: Express and Implied. Express consent is when the recipient gives clear permission to email them. This could be checking a box as a customer creates an account asking to receive a newsletter. Implied consent is granted when there is an existing business or non-business relationship between the sender and recipient. A “business relationship” is one where a customer has made a purchase from the business or entered into a contract. If someone purchases something from a business, then that business can send commercial emails for 2 years from their purchase date under the Implied Consent criteria.
Abandoned Cart Emails
Emails that are sent to customers who abandon their shopping carts online, with hopes of luring them back to complete their purchase.
A way of paying for advertising and can cover PPC, social media marketing, traditional media buys etc. With Affiliate Marketing, you pay “affiliates” (people who promote your product) a commission. It’s done by tracking the traffic coming to your website from your affiliates and rewarding them if their incoming traffic results in a sale. You pay for marketing based on the performance of it. Some common types of affiliates are: loyalty programs, rebate sites, bloggers, email marketers, and social media profiles.