Decoding eCommerce Jargon: A Comprehensive Guide to the Language of Online Retail

April 10, 2024

In the fast-paced world of eCommerce, staying ahead means not only understanding the latest trends but also navigating a landscape filled with industry-specific jargon. From marketing strategies to technical terms, the eCommerce space has its own language that can be both confusing and overwhelming. To help you decode the mysteries of eCommerce, let's explore some key jargons that are commonly used in the industry.

  1. Conversion Rate Optimization (CRO): CRO refers to the process of optimizing a website or landing page to increase the percentage of visitors who take a desired action, such as making a purchase. Strategies may involve A/B testing, improving user experience, or refining the checkout process.

  2. B2B and B2C: B2B stands for Business-to-Business, where transactions occur between two businesses, while B2C stands for Business-to-Consumer, involving transactions between a business and individual consumers.

  3. Dropshipping: A fulfillment model where a store doesn't keep the products it sells in stock. Instead, when a product is sold, the retailer purchases the item from a third party and has it shipped directly to the customer.

  4. Omnichannel: An approach that provides customers with a seamless shopping experience across multiple channels, such as online stores, mobile apps, and physical retail locations.

  5. SaaS (Software as a Service): SaaS refers to a software distribution model where applications are hosted by a third-party provider and made available to customers over the internet. Many eCommerce platforms operate on a SaaS model.

  6. SEO (Search Engine Optimization): SEO involves optimizing a website to rank higher in search engine results, leading to increased visibility and organic traffic.

  7. Shopping Cart Abandonment: This occurs when a visitor adds products to their online shopping cart but leaves the website before completing the purchase. eCommerce businesses often employ strategies to reduce cart abandonment rates.

  8. CMS (Content Management System): A CMS is a software application that allows users to create, edit, and manage digital content. In eCommerce, CMS platforms are crucial for maintaining and updating product information.

  9. Fulfillment Center: A facility used by eCommerce businesses to store inventory, pack orders, and handle shipping logistics. Outsourcing fulfillment to a third-party center is common to streamline operations.

  10. Cross-Selling and Upselling: Cross-selling involves recommending additional products related to the one a customer is interested in, while upselling involves encouraging customers to purchase a higher-end product or upgrade.

  11. PCI DSS Compliance: Payment Card Industry Data Security Standard (PCI DSS) compliance ensures that eCommerce businesses handle and store customer payment information securely.

  12. Chargeback: A chargeback occurs when a customer disputes a credit card transaction, leading to a reversal of the sale and a return of funds to the customer.

  13. ARPU (Average Revenue Per User): ARPU is a key metric that calculates the average revenue generated by each user, helping businesses assess customer value and make strategic decisions.

  14. KPI (Key Performance Indicator): KPIs are measurable values that demonstrate how effectively a business is achieving its objectives. Common eCommerce KPIs include conversion rate, customer acquisition cost (CAC), and customer lifetime value (CLV).

Navigating the eCommerce space becomes much more manageable when armed with a solid understanding of these jargons. As the industry continues to evolve, staying informed about the latest terms and concepts will empower businesses to adapt and thrive in the dynamic world of online retail.