eCommerce Terminology You Need to Know

September 25, 2014 Shane Gamble

For beginners, competing in the ecommerce space seems like a fairly simple concept. Create or find a product that customers value, provide this product using an ecommerce platform, and finally sit back and watch the money pile up. Seems pretty straightforward, right?

Many retailers are deterred from moving to the online marketplace because of the (seemingly) complex terminology and language used. Many of the terms take on different meanings than their original intention, which can cause a great deal of confusion. For example:

  • Spider – “Gross! Even on the Internet you can’t get away from those things!”
  • Cookies – “I never thought I could satisfy my sweet tooth while on the computer!”

Maybe my examples are a bit of a stretch, but you get my point.

It’s crucial to speak the language of ecommerce before you enter the online marketplace. Here’s a list of the need-to-know terms that will allow you to participate in the ecommerce conversation. Understanding how and when to use these terms will start you on the path to opening the online store you had always envisioned.

Technical Terms

Application Programming Interface (API): The interface that gives developers access to develop tools for a specific platform.

Business Process Execution Language (BPEL): A language for specifying business behaviors using Web services, it is a standard produced as part of the OASIS XML standards. BPEL is itself two specifications, an abstract version for describing business processes from a modeling standpoint, and an executable version that can actually perform business processes in conjunction with a BPEL processor.

Caching: the storage of web files on a computer or server so they can be accessed quicker by the end user.

Choreography: The talking between different components of an ecommerce system across different companies and vendors.

Content Management System (CMS): a system that allows website owners to make text and picture changes to their ecommerce store with little or no technical knowledge. (e.g. WordPress)

Cookies: HTTP, or browser, cookers are small bits of info a website sends and stores on a user’s browser. This info is sent back to the server every time the user visits the website again, to alert the server of that user’s previous activity. These are used in ecommerce for ad targeting, dynamic website content based on user signals, and saving shopping carts.

Directory: a search service that arranges the web pages in it’s database into categories and subcategories.

Domain Name: a user friendly name that represents a location on the Internet.

Doorway Page: a page made specifically to rank well in search engines for particular keywords. An entry point through which visitors pass to reach your web site’s main content.

Electronic Data Interchange (EDI): The process of sending a message across a network in order to perform financial transactions.

Federation: Multiple independent web services that cooperate as a single system.

.GIF: image file format used widely on the web.

Hit: any request for any file located on the web.

Hyperlink: a link from a hypertext file or document to another location or file, usually activated by clicking on a highlighted word or image on the screen. (Example)

Hypertext Markup Language (HTML):a standardized system for tagging text files to achieve font, color, graphic, and hyperlink effects on web pages.

JavaScript: a scripting language used in the development of web pages. Refers to client side web programming.

.JPG/.JPEG (Joint Photographic Experts Group): image file format used widely on the web.

Link Text: the text (words) used to create a hyperlink.

Log file: the files that maintain a record of the requests for resources on your website.

Luhn Algorithm: an algorithm used for credit card number generation and validation.

META tags: tags that describe various aspects of a web page. META Keywords, META Title, META Description are the most commonly used.

.PNG (Portable Network Graphics) – a raster graphics file format that supports lossless data compression. It was created to improve upon the GIF format and is the most used lossles image compression format on the Internet.

Spiders: software used by search engines to locate new Web pages for their document databases.

Secure Socket Layer (SSL): technology for encrypting data sent over the internet. SSL certificates are used to verify the authenticity of an ecommerce site’s encryption standards.


General Internet Terms

Banners: Form of prevalent internet advertising on many sites.

Etailing: Virtual storefronts which act as a catalogue of products and includes a shopping cart system to enable customers to purchase online.

Phishing: Using a fake website or download to take user information, targeting login credentials.

Pop-up-ad: an ad that automatically opens a new browser window.

Responsive Web Design: a website design approach that is aimed at creating sites to provide an optimal viewing experience (easy reading, navigation, minimization of resizing, panning, and scrolling) across a range of devices (e.g. mobile phones, tablets, laptops, desktop computers)

Search Engine: a program that indexes web documents and attempts to match those documents with search words or phrases by an end user (e.g. Google, Bing).

Search Engine Optimization (SEO): the process of building web pages target towards getting higher rankings in search engines.

URL (universal resource location): location of a resource (web page, file, image) on the Internet. (e.g. sweettooth.wpengine.com)

Web Browser: a software application that allows you to view resources (primarily HTML web pages) on the Internet (e.g. Google Chrome, Internet Explorer).

Web Design: the creation and coordination of information on a website.

Web Hosting: a computer that is always connected to the internet and provides access to web resources for a website.

Web Resource: any HTML file, image or other computer file that can be reached through a URL.

Website Traffic: the number of visitors and visits to your website. Can be measured in hits, page hits, or unique visitors.


Results/Tracking Terms

Abandonment: when a user visits your site but does not fulfill the desired action (e.g. making a purchase, signing up for newsletter).

Affiliate Tracking: software that tracks clicks, sales, or other performance measures to determine revenue sharing or commission.

Average Resolution Time: Average time taken to resolve a customer problem.

Average Time on Site: the average amount of seconds a user spends on your site. Based off of all site visitors within a given time frame.

Bounce Rate: the percentage of people who view one page on your site, then exit without clicking through to a second. Can be calculated for all pages on your site (i.e. could have higher bounce rates on some sites than on others).

Call-to-Action (CTA): action requested by marketing content.

Click-through: the act of clicking on an online advertisement (generally a banner) to the advertiser’s website.

Click-through Rate: the total impressions delivered versus the people who clicked. This can be measured for calls-to-action, product listing, and any other form of link on the site).

Conversions: a percentage of users who complete an action divided by users who are presented with an opportunity to complete it. This is often tracked on all forms of Inbound Marketing (e.g. email open rates, PPC ads). Conversion rates can be tracked over a specific period of time (i.e. month to month) or on a rolling measurement (i.e. average across time).

Customer Lifetime Value: the total value of a customer to an organization over the life of the customer.

Day Part Monitoring: tracking when visitors attend the site.

Keyword: a word used to perform a search.

Key Phrase: a phrase used to perform a search.

Keyword Density: on a web page, the keywords as a percentage of indexable text on the webpage.

Keyword Research: the search for keywords related to your website. The analysis of which words or phrases are used by visitors to locate sites similar to yours. The analysis of which keywords or phrases will yield the highest return on investment.

Link Popularity: a measure of the quality and quantity of sites that link to your site.

Longtail Keywords: keywords containing more than one word. Comprise more than 70% of searches.

Order Tracking: the process in which a customer views the progress of their order leading up to delivery. Usually, a tracking code is provided to the client when a purchase is completed.

Organic Search Results: the non-paid listings displayed as a result of a key phrase search using a search engine. Featured, pay-per-click, and sponsored listings are generally used by less than 40% of search engine users. This means organic search placement is twice as effective as paid search results.

Pageviews: the total number of times a page on your site is loaded.

Product Affinity: products that are usually purchased together.

Product Relationship: products that are viewed frequently by the same user.

Unique Visitors: total number of individuals who visit your site. This does not track the number of times an individual visits the site.

Uptime: the percentage of time a website is live.


Merchant Specific Terms

Address Verification Services (AVS): a service provided by credit card companies to verify that a customer’s billing address is the same as that given during an ordering process.

Affiliate: any website of business that provides links or sales to your site through their own marketing efforts.

Affiliate Marketing: partnerships between ecommerce platforms and online publishers, where the publisher endorses/reviews/features a product and is compensated based on ecommerce performance. Some affiliates are paid for a mention, some are paid commensurate with traffic driven back to the eCommerce site, some are paid on actual sales generated.

Auto Responder: an automatic email sent to a customer when they do something (e.g. place an order, abandon a shopping cart).

Basket: part of shopping cart software which lets online buyers choose items to buy. At the checkout, the software calculates the total cost of delivery and taxes, and takes the buyer to a payment procedure.

B2B: selling products or services to other businesses.

B2C: selling products or services to end consumers.

Channel Conflict: conflict that arises from inconsistencies among a merchants different channels. Such as, price differences in store versus online.

Chargeback: transaction debited against a merchant account, such as a return. Usually associated with a fee that is also debited from the merchant.

Commerce Service Provider (CSP): solutions partner that provides the system and services to establish the back-office infrastructure for online businesses.

Cost-per-click (CPC): online advertising payment process where payment is based on qualifying actions such as clicking on a banner or search engine listing.

Cost-per-thousand (CPM): cost of an ad per thousand impressions.

Digital Cash: money that never leaves the internet (e.g. Paypal, Bitcoin).

Disintermediation: The process of eliminating channels and selling product directly to the end customer.

Electronic Wallet: store credit card information on a computer in encrypted form and then can be used to pay in supported formats and sites.

Email Marketing: the use of email to promote or market your products or services.

Email Spam: unsolicited commercial email.

Forum: an online discussion where visitors may read and post information or comments.

Gateway: A computer that allows communications between networks. Used in ecommerce as an interface between merchant and bank.

Group Buying Model: people coming together over the internet to form a community and purchase something as a group.

High Risk Processors/Brokers: Institutions that issue merchant accounts to high risk endeavors, therefore allowing them to accept credit card payment. Used when the bank has too stiff requirements. Compensate risk by charging higher fees than traditional banks.

Home page: the opening page of your website.

Impression: any time a particular item, ad, or image is displayed to a user.

Inbound Link: a link from a site other than your own.

Interstitial Pages: ads that come up in between to desired pageviews.

Long Tail: the idea that small markets can be served on the aggregate by the internet and become profitable.

Merchant Accounts: an online bank account which accepts credit card payments; where payments made to an ecommerce store are submitted.

Merchant Identification Number: unique number that is used in conjunction with all transactions for a particular site/merchant.

Micropayment: the transfer of a very small amount of funds (cents) so that small transactions can occur.

mCommerce: with the growth of internet usage, mobile commerce (mCommerce) has also seen significant growth.

Navigation: generally referred to as the structure and process of moving from one page or section of a website to other.

Network Effects: the idea that something will become more valuable as the number of people using it increases. Facebook benefits from network effects.

Opt-in Email: a process for allowing people to request email from you.

Opt-out Email: a process for allowing people to request that you stop sending email.

Payment Gateway: an internet service that connects your ecommerce site with your Merchant Account. A gateway accepts your order information and connects to your Merchant Account to authorize and transfer funds.

Payment Threshold: the minimum accumulated commission an affiliate must earn to trigger payment from a program.

Pay-per-click: used to describe those search engine services that charge for creating visitors to your site. The cost of each visitor is determined either by a bid or flat fee that you are charged each time a search engine user clicks on a link to your site from these sponsored links.

Permission Marketing: marketing based on getting a users consent to receive information from your company or website.

Privacy Seal Programs: independent organizations that verify if an online companies privacy statement is verifiable and accurate.

Promo Code (or Discount Code): short, alphanumerical values which allow a user to access an otherwise hidden discount.

PurePlay Business: business completely designed for online, had no physical presence.

Reciprocal links: mutually agreed upon links between two sites.

Shopping Cart: refers to the portion of an ecommerce site that maintains a list of the products chosen by a visitor to a purchase. Can be stand alone or part of an ecommerce solution.

Single Sign-on: sign in information for a particular site is stored locally or over the web so that a returning user does not need to re-enter login information.

Third Party Payment Processor: some eCommerce platforms can accept payment through providers (e.g. PayPal).


3 Tips to Ensure you Master the eCommerce Language

1. Envelop Yourself in It

You cannot expect to read a few articles and declare your fluency. It takes time, effort, and exposure to the language in order to become an expert. Devote some time each day to learning the language – whether through blogs, social media, or simply searching terms that you have heard but do not understand.

2. Never Stop Learning

eCommerce is an ever-changing landscape – what was standard terminology 5 years ago is more than likely outdated today. With new concepts and terms being published daily, the knowledge of this language requires constant upkeep on your part.

3. Be Proactive!

Simply reacting to trends in the industry and learning terminology after-the-fact could cause you to fall behind. Those who are proactive and identify trends as they emerge will surely outpace their competition.

ecommerce terminology uses Smile CTA

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