1. technology and computing
2. internet technology
3. ecommerce

“How to Win at Ecommerce”
How to Speak Ecommerce:
A Comprehensive Glossary for
Ecommerce Beginners
A publication by
academy
Who’s this book for?
This ebook is a beginners level glossary for a broad range of ecommerce
professionals, including new online retailers, trainee digital marketers and other
ecommerce newbies. It is focused on getting you and your team up to speed on
ecommerce lingo so that you can start talking the talk in no time.
This glossary defines 73 of the most relevant concepts and terms used every day
in the ecommerce ecosystem. In it we will cover different metrics, ecommerce
concepts, business terms and other digital jargon that can seem complex for
someone unfamiliar with ecommerce. However anyone involved in ecommerce
will, we hope, find them useful.
Happy reading!
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Analytics you can do something with!
If you’re struggling to get answers from your data, then Ometria is made for you.
Ometria is a powerful new ecommerce analytics platform that can be set up in
minutes. It offers valuable customer insights and product analysis, alongside a
KPI dashboard, real-time stats and an in-depth diagnostic review of your entire
customer journey.
• Helps you make more money by surfacing actionable insights
• Saves you time and makes your team more productive
• Gives you a truly holistic view of your ecommerce business
About the authors...
Written by Victoria Elizabeth
Victoria is a Content Writer and
Ecommerce Research Specialist at
Ometria. She manages the Ometria
Blog and writes about ecommerce
optimisation, website design, digital
trends and the latest ecommerce news.
Edited by Edward Gotham
Ed manages client relations and
consulting at Ometria as the Head of
ising
Ecommerce. He delivers results, util
as
a data driven mindset, across all are
ce
of ecommerce from strategic guidan
to more specific topics such as UI/UX
optimisation.
Designed by Djalal Lougouev
eur and
Djalal is a technology entrepren
Officer
a co-founder and Chief Financial
sign
at Ometria. He is the Head of De
and product management.
Introduction
Welcome, and thanks for downloading the Ometria Academy’s How to Speak
Ecommerce ebook! We have put together a detailed overview of common terms
and concepts you will need to understand if you are serious about becoming
proficient in ecommerce. Many of these terms have wider usage than just within
ecommerce, and many of them will already be familiar - so please forgive us if we
have included some of the more obvious terms.
But whether you are an ecommerce beginner or a more experienced practitioner
who would like a refresher, this glossary will help navigate the nuances and
jargon of ecommerce lingo. And plenty of jargon there is I’m afraid! However,
wherever possible we’ve tried to de-jargonise it into plain English. We welcome all
feedback, so let us know if we have missed any terms or details in our feedback
forum or by email.
Share this ebook!
A/B Mutlivariate Testing
A/B and Multivariate testing are types of comparative analysis that test
the performance of a website using two or more versions of a feature. An
example of A/B testing might be to trial, for example, a blue versus a red
call-to-action button on a homepage. The website traffic is divided up so that
some viewers will see red, some will see blue, and the version that sees the
most click-throughs is deemed the better option.
• 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 occurs after a
prospective customer has added items to their shopping basket/cart and
then leaves whilst in the checkout process.
• It is important to follow this metric to assess any issues with the checkout
process. Where are the friction areas? This will allow you to determine
the possible factors that went into abandoning their basket or cart, such
as lack of credit card options, too long of a process, or expensive shipping
and handling.
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Affiliate Marketing
Affiliate marketing is a performance-based method of attracting more sales
where third party partners (affiliate partners) are compensated for each sale
(commonly called CPA - cost per acquisition) or in some cases visitor (CPC cost per click) they drive into a website.
• 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, or alternative text to give it its full name, is a phrase used to
complement an image file which outlines in text for viewers what the image
represents. It is good practise which allows disabled visitors, who might not
be able to see images and who rely on aural aids, to access your site, as well
as provide an alternative way to understand an image where a viewer has
the choice to download the image, or where they are viewing the page with a
slow connection.
Analytics
Analytics is the process used to collect and organise patterns in data. While
in most cases analytics relates directly to digital analytics, strictly-speaking it
concerns all analyses of large amounts of information. It is especially useful
in business intelligence, and helps to inform and predict future courses of
action.
API
An API, or Application Program Interface, is a set of rules or tools for building
a software application as well as connecting sets of data together from one
application to another. A good API provides the building blocks for creating
programs that are consistent and can interact with each other.
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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.
• 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.
Breadcrumb Navigation
Breadcrumb navigation is used to help keep track of a viewer’s location
within a website - normally a visualised heirarchy 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
The bounce rate is actually interpreted differently on different analytics
platforms, however the standard set by Google is the percentage of visits
to your website that only go to a single page in one session. However, they
do not take into account the time spent on a single page, so some analysts
like to reconfigure their analytics to set a time limit - for example, a bounce
can be defined by spending 10 seconds on a page before exiting. This does
not take into account visitors who come once and then leave their browsers
open - so there is no perfect way to calculate this!
• 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.
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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)
A call to action is a marketing technique that prompts visitors to complete a
desired action by displaying a bold and effective message, which commonly
revolves around clicking a button. Typically CTAs have messages like, “Buy
Now,” or “Sign Up Today.”
• 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.
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Click-through Rate (CTR)
The click-through rate is a measure of how many people clicked on a
particular link in relation to how many times it was loaded on a page. 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 clickthrough 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 is software used for uploading, creating
and managing content on your website, whether it be text, images, video
or audio. Its main purpose is to avoid the need to hardcode, 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.
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Conversion Funnel
The conversion funnel is the step-based model for sales and marketing.
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.
The main steps in a conversion funnel are:
1.
2.
3.
4.
5.
6.
Visit - visitor comes to your website.
Viewed listing - visitors viewed a product-listing page.
Viewed product - visitor viewed a product page.
Added product to basket - visitor added an item to their basket.
Started checkout - visitor views their basket to start the checkout process
Completed checkout - visitor completes the checkout process and
purchase an item(s).
• 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.
• 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%.
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Cookie
A cookie is a snippet of code, unique to each site or application interacted
with, that is stored in a user’s web browser whilst the user is browsing that
website. Every time the user loads the application or website, the browser
activates the cookie and sends the data stored in it back to the website or
application, to link the new session with previous activity by that user. In the
UK, websites are required by law to display their cookie information and ask
visitors whether they agree to accept cookies while they use the site.
CSS
CSS, or Cascading Style Sheets, are used to describe how a page should be
laid out and formatted. It differs from HTML in that it defines everything
other than the content of a page, focusing instead on layout, style,
background and colour.
Customer Acquisition Cost
Customer Acquisition Cost is the amount attributed to getting one new
customer, taking into account the cost of advertising, marketing, and sales
expenses to attract them. The customer acquisition cost is found by taking
the total spend on attracting customers divided by the amount of new
customers for a certain period. Where is starts getting useful for ecommerce
managers is where it is broken down into channels, so you can see which
channel provides the best return.
Customer Experience
In ecommerce the customer experience is generally referred to as the sum
of the ongoing experiences an individual has with a company and content
they display across all devices.
• 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.
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• 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 Lifecycle
The customer lifecycle is a model used by marketers that describes the
relationship between a customer and company over a period of time. The
stages are not set in stone and differ between different companies and
industries. However, normally the stages are as follows:
1.
2.
3.
4.
Visitor
Lead/Contact
Customer
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 the most accurate measure of a customer’s
economic value to a company over time. It can be used to determine a very
accurate return on investment (ROI) on marketing campaigns. Use the ratio
CAC:CLV (where CAC is Customer Acquisition Cost and CLV is Customer
Lifetime Value) to determine the maximum you are able to spend to acquire
a customer.
• 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.
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Customer Retention
Customer retention measures the number of active customers that your
company has at any time. This metric is used in conjunction with other
factors such as repeat visitor and conversion rates to assess the success of
marketing campaigns and determine what factors lead to ongoing customer
conversions.
• 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 lifecycle.
• 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.
• It is especially important to manage social media channels. How a
company deals with a complaint will often do more for its reputation
than other customer service issues. Where once a dissatisfied customer
would pass on their dissatisfaction to 4 or 5 others, on social media this
dissatisfaction can be amplified to thousands very quickly.
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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. 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 your highest value customers.
Ecommerce
Ecommerce or electronic commerce includes all buying and selling of
products taking place through electronic means. Today, this encompasses
channels such as social media, email and search through a growing number
of different electronic devices such as smartphones, telephones, laptops etc.
Ecommerce even pre-dates the internet - for example the first consumer
ecommerce transaction took place in the UK in 1984, with Tesco.
Ecommerce Platform
An ecommerce platform is software that includes comprehensive prebuilt functionality allowing you to more easily set up an online store. The
functionality of ecommerce platforms has evolved over the years to include
common features such as a CMS, shopping basket and more advanced
features like navigation tools, analytics, checkout pages, and inventory
management.
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• 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.
Exit Percentage
The exit percentage is a metric that is used to calculate the percentage of
visitors that view a particular page and subsequently exit your site without
viewing another page.
• 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.
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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 fulfillment house is a company that specialises in accepting, filling and
shipping orders on behalf of another company as well as storing inventory.
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.
Gross Profit Margins
A gross profit margin is a ratio that measures the total revenue of a
company minus the cost of goods sold.
total revenue - cost of goods sold
total revenue
• The cost of goods sold is the cost to a company to make a unit of any
particular product which includes labour, materials etc.
• It is an important KPI because it measures the health of a company and
how much revenue they have left over for additional expenditures and
future savings. Without a steady gross profit margin, a company will not
be able to expand and take risks in future investments.
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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 a way to attract customers to your store through
creating and distributing ‘remarkable content’ which builds brand awareness
and utility. Inbound marketing uses blog posts, social media, video, ebooks,
SEO, video and other multimedia to attract people more naturally to their
product and inspire conversion. It differs from outbound marketing, which
uses techniques such as display advertising and cold calling which can be
classified as interruption marketing.
• Inbound marketing is very effective at nurturing prospects into
customers by ushering them along the customer lifecycle 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 alot more effort and is very time consuming, but its ROI
grows exponentially over time.
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Inventory
Inventory is the amount of goods that a company is holding in stock or in
progress of being stocked. 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
define what a page is about. Using keywords (for example ‘dresses’) or
keyphrases (‘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
Sometimes known as a ‘lead capture page,’ landing pages are pages on a
website that prospects are channeled to after clicking on a promoted ad or
URL. They are literally the pages visitors land on after clicking a link from any
marketing channel.
• 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.
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Marketing Attribution
A marketing attribution model is a model that credits or attributes a
conversion as a whole to an individual media channel, or as weighted parts
to different touch points (steps) involved in the conversion path. Simply put
it is a way to give credit where credit is due and determine a more accurate
level of ROI per channel. Consequently, you can analyse which areas of your
marketing techniques are doing well and which need improvement.
• 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 simply any practice that a company takes to sell a product
or service to consumers. 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.
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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, pageviews, 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 ereaders.
• 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
Multichannel 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, sponsorships,
among a host of others.
• The importance of multichannel 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.
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Omnichannel Marketing
Omnichannel marketing is very similar to multichannel, but differs in
one major aspect. Whereas multichannel marketing just aims to interact
with customers on multiple channels, omnichannel 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.
• Omnichannel 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 nonpaid 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 sponsorships.
These techniques attempt to catch the attention - literally ‘interrupt’ - the
consumer rather than attracting them more naturally.
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• 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 is a marketing technique that displays ads in paid listings
sections on search engine results pages in exchange for a fee per click (PPC
- paid per click). The price for paid searches is usually based on click-through
rates, which vary based on the popularity of the search engine queries you
wish to advertise on.
• On Google the paid listings appear at the top of search page results and
in the right hand column.
Payment Gateway
A payment gateway 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.
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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 form of word of mouth marketing, 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 the amount of people coming through to a company’s
website due to referrals from other online channels (see above). 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.
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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 etailers 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.
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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 fundamental tool for increasing your
company’s exposure to potential customers through search engines such
as Google and Yahoo. It is essentially the visibility that your company has
on an organic, or un-paid, search. The higher your company’s placement on
organic searches and the more times it comes up using various keywords,
the better the chances are that someone will find and click on your website
URL.
• Learning how to manage SEO is vital to attracting relevant traffic to your
site.
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.
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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, or SCM, is the management of all processes and
logistics required to produce, ship and sell a product to the end customer.
• A supply chain manager is in charge of tasks such as keeping track of
product production levels and making communication, shipping and
storing costs as economical as possible.
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• 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 any exchange of money for products or services. 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.
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
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
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.
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• 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 tracking, compilation, visualisation and analysis of data
from websites. This is used to optimise merchandising, marketing and the
entire user experience online.
Web Hosting
Web hosting is a service which stores your company’s website on an webconnected server and makes it accessible online.
• 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.
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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.
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Conclusion.
We welcome and encourage your feedback, as well as any ideas you have for
improving our glossary that we may not have covered here. Please feel free
to leave your opinions on our feedback forum or contact us by email:
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