Shop Circle e-commerce glossary
An A-Z of the most up-to-date terminologies for e-commerce merchants, brands, innovators, and experts.
Also known as split testing; the practice of presenting half of a set of users with an alternate version of a visual e-commerce element — such as a a website, an e-mail, an app interface — with the goal of testing a particular variable and evaluating whether or not the alternate page achieves a higher conversion rate.
API (application programming interface) system
The enabling of an e-commerce platform to connect services to other applications, facilitate communication and share data. API systems have a wide range of capabilities for e-commerce brands and merchants, including managing and updating product catalogs, customizing checkout experiences, authenticating transactions, and many more.
A unique URL containing the affiliate's ID, username, or other personal identifier, allowing brands or merchants to record the traffic sent to their website.
The process of earning a commission by promoting another company’s products in an online setting. Merchants and brands find a product or service they like, promote it to others, and earn a profit for each completed sale.
A multinational technology company with several different focuses, including e-commerce, cloud computing, digital streaming, and artificial intelligence. Amazon is the world’s largest online retailer, marketplace and cloud computing service.
The action in the Order Tagger Shopify app of automating the classification of orders, products, or customers based on specific business criteria.
An e-commerce transaction of products, services or information that is conducted between companies — such as a manufacturer and wholesaler, or a wholesaler and a retailer — rather than between a company and individual consumer.
An e-commerce model that moves or sells products or services directly from a company to an individual end user, who purchases them for personal use.
Also known as buy-online-deliver-from-store; a method of fulfillment that treats physical store spaces as fulfillment centers, leveraging existing store inventory to complete orders. BODFS can help e-commerce retailers not only increase speed of delivery, but also reduce the need to discount merchandise at the end of season or end of life.
Also known as buy-online-pickup-in-store; an e-commerce option that allows customers to make online purchases and pick up the order in person, from a designated customer service or pickup area, inside or outside a brick-and-mortar store.
Also known as buy-online-return-in-store; an e-commerce option that allows customers to make purchases online and have them delivered to their residence, with the added ability to return the items at a physical store — even if it’s a location they’ve never visited — if they’re unsatisfied with the items.
Also known as buy-online-ship-to-store; a backend e-commerce process that allows items to be shipped directly from a warehouse, and then customers can pick them up in-store. This ensures that retailers will never be out of stock, while also reducing store footprint size and eliminating the need for third-party delivery services.
A feature of the Video Background Shopify app that allows users to replace the background of an existing element with a video.
Solutions made up of the best products of each category. E-commerce companies can then integrate them to suit their specific goals and address pain points, rather than choosing a large, single-vendor solution. This allows for specialization and offers a wider range of innovative capabilities, while optimizing output in the process.
An e-commerce platform that provides software as a service (Saas) services to retailers, including online store creation, search engine optimization, hosting, marketing and security for businesses.of all sizes.
The percentage of website visitors that leave without taking a specified action, such as making a purchase, clicking on a link, or filling out a form.
The process of creating an identity for an e-commerce company in the mind of a consumer. Branding can be made up of several components, including a company's logo and overall visual design, its mission and core values, and its tone of voice.
A subscription model where brands and merchants offer a selection of products that customers can choose from, as well as configure how many items customers can add. This model allows for more customization and control, while also ensuring subscriptions remain fresh and interactive.
CIAM (customer identity & access management)
Also known as customer identity & access management; a system that securely captures and maintains persistent customer profile data, authenticating legitimate users while denying access to potential threats.
Also known as Cascading Style Sheets; a method of adding stylistic instructions to the back-end code of an e-commerce website. CSS defines the appearance and positioning of individual elements of the website, allowing for design changes over time.
A marketing instruction that indicates the next step a marketer wants its audience to take. This can be sales-focused — such as instructing the viewer to click a button to complete a sale — or be marketing funnel-focused — suggesting that the viewer subscribe to a newsletter or learn more about its products or services.
Cart abandonment rate
The ratio of the number of abandoned shopping carts to the number of initiated transactions or completed transactions. Abandonment occurs when a potential customer drops out of the online checkout order process before completing the purchase.
An e-commerce strategy that streamlines the checkout process and removes every possible obstacle to completing transactions for customers. Optimization could include the elimination of distracting design elements and unnecessary steps.
The rate at which customers stop doing business with a company, or the measurement of a company’s loss in subscribers within a given period of time.
Click through rate (CTR)
A business metric that measures the number of clicks marketers or advertisers receive on their ads divided by the total number of impressions, or the number of times the ad is shown.
An approach that leverages cloud computing delivery models to build and run flexible, resilient and scalable applications that reside in dynamic environments — either public, private or hybrid clouds.
The concept of setting rules that cause an e-commerce business process to change based on customer input. When customers make certain choices or fulfill certain conditions, they are presented with further options or benefits through an “if this, then that” structure.
Content Management System (CMS)
A software platform that allows e-commerce companies to create, edit and publish content on their website with no coding required. Users can change the look and feel of the online store in several ways, including modifying product page layout, adding new sections to promote specific products or services, or adding promotional banners to the site. E-commerce CMS software can be SaaS or cloud-based — which is hosted and managed by the software vendor without a separate server — or open source, which is often self-hosted and gives users total control over the website’s functionality.
A visual representation of the different stages in a buyer’s journey towards making a purchase. The funnel also illustrates the gradual decline of the number of potential customers as they are guided along the conversion path. It’s often divided into “top of funnel” and “bottom of funnel” to drill down and identify specific opportunities where conversions can be increased through various marketing tactics.
The percentage of website visitors that complete a specific goal out of the total number of visitors.
Conversion rate optimization
An e-commerce strategy that aims to increase the percentage of customers who perform a desired action in a digital shopping experience. It is centered around calls-to-action, including purchasing a product, signing up for a service, clicking a link, downloading a file or filling out a form.
A sales strategy that encourages customers to spend more by buying a product or service that’s related to the one they’re already in the process of purchasing. Brands or merchants can identify products or services that satisfy additional or complementary needs that may be unfulfilled by the original item being purchased by the customers, or direct customers to products they are likely to have purchased anyway.
Customer Lifetime Value (CLTV)
The total amount a customer spends on an e-commerce company’s products or services over the entire duration of their relationship. CLV can be calculated by multiplying the average value of a purchase by the number of transactions per year by the average customer relationship length in years.
Customer account integration
The process of collecting and organizing customer account data from different databases into a single form, in order to more easily share information and enhance analytical capabilities for an e-commerce brand or merchant.
The personal, demographic and behavioral information that is either provided by customers while interacting with your e-commerce business, or collected from them to better understand their needs and engage with them in online and offline forms of communication.
The perceptions and impressions customers have of an e-commerce brand or merchant as they go through the buyer’s journey. This includes all the cumulative effects of the interactions with the brand or merchant’s digital channels, products, systems and employees, and how it impacts bottom-line factors like revenue.
The process by which a customer engages with a brand or merchant in order to achieve a goal, comprising the entire path of interactions with the product or service.
The process of dividing customers into groups based on common traits so that brands or merchants can tailor marketing efforts to each group effectively. Segmentation can be useful in both product development and communication, to create products and messages that resonate with specific customer subsets.
D2C (direct to consumer)
Also known as direct to consumer; an e-commerce strategy that allows brands or merchants to sell products directly to customers and bypass “middleman” organizations such as third-party retailers, resellers, or wholesalers.
The process of protecting digital information from corruption, theft or unwanted access throughout its entire lifecycle. Data security measures can be physical (hardware, storage devices, user devices) — or digital (software, administrative controls, policies and procedures).
A product or service sold online by an e-commerce brand or merchant that does not have a physical form.
An online database of digital objects that can be organized, searched and retrieved by users, either locally or remotely via a network. The library can include text, still images, audio, video, digital documents, or other digital media formats.
A software-enabled product or service that can be sold online — while not possessing a physical form or substance — and offers some form of value or utility to a customer.
Direct to consumer (D2C)
An e-commerce strategy that allows brands or merchants to sell products directly to customers and bypass “middleman” organizations such as third-party retailers, resellers, or wholesalers.
Direct to consumer ecommerce platform
The interface that e-commerce brands or merchants use to sell products directly to new customers, bypassing “middleman” organizations such as third-party retailers, resellers, or wholesalers.
The files offered by an e-commerce brand or merchant that can be transferred from its central server to a customer’s device via a link or other form of call-to-action on a website, email or app.
An order fulfillment method where an e-commerce brand or merchant purchases inventory as needed from a third-party wholesaler or manufacturer to fill orders, rather than keeping products in stock. This method requires less upfront capital than a traditional retailer model, and also generally has lower overhead expenses.
The software that allows e-commerce stores to convert manual tasks, processes or campaigns into automated versions that can be executed when needed. The automations can take several different forms, but each workflow still has the same goal of simplifying tasks.
The process behind getting an e-commerce order delivered after a customer orders it online. It includes processing the order, picking items and maintaining inventory, packing the order and shipping it to the customer’s selected destination.
E-commerce order management
The process used by e-commerce brands or merchants to manage and fulfill online orders, including order routing, shipping label printing, returns, and subscription management. By using an order management system, or OMS, products can make their way to customers with full visibility on the order through every step of the process.
E-commerce tech stack
The combination of the frontend and backend software, programming languages, frameworks, platforms, apps, and tools that, when layered on top of each other, create a fully operational e-commerce system.
A direct marketing channel that allows e-commerce brands or merchants to share new products, sales, or updates with customers on their email contact list. Marketing emails serve a specific purpose in the buyer journey, and can be promotional or informational in nature.
A type of e-commerce architecture that refers to the decoupling of the frontend — or consumer-facing — content of a store from the backend commerce capabilities. Separating the frontend — or “head” — from the commerce engine — or “body” — gives brands or merchants the freedom to use different technology for each end and customize each to enhance the shopping experience.
I, J, K
A business strategy that attracts and engages customers by creating valuable content and experiences specifically designed for them, while forming connections and solving problems.
A group of people in an industry that are well-respected within the industry and/or by the general public. They are able to impact other people’s beliefs or opinions, as well as help to ensure the success of a product or service by backing it or somehow lending their reputation to it.
Instant digital product delivery
A service which allows digital products to be delivered on a post-payment return page, such as a Thank You page. Customers are then able to download the digital products via an encrypted link instantly, after the transaction is completed.
An open-source e-commerce platform written in the scripting language PHP. After being acquired by Adobe in 2018, Magento is now known as Adobe Commerce.
Also known as m-commerce; the subset of e-commerce that involves the use of wireless handheld devices like smartphones and tablets to conduct commercial transactions via the internet, including buying and selling products and online banking.
The practice of providing an engaging and user-friendly experience for visitors accessing e-commerce websites from mobile devices. Brands or merchants can optimize a website for a customer’s specific device in several ways, including minimizing code and reducing redirects to boost page speed, designing more prominent navigation buttons, and prioritizing local search, among others.
The construction of the functions of an e-commerce platform from a set of interconnected components, rather than a pre-packaged system. This allows brands or merchants to be more innovative and scale their business more efficiently, with integrated backend modules — such as A/B testing or personalization engines — delivering a seamless experience through the buyer’s journey.
Off page optimization
All of the actions that e-commerce brands, merchants and users can take outside of the website to raise its ranking within search engines results pages. These actions include backlinks, social media marketing, brand mentions, and influencer marketing.
An e-commerce approach that uses multiple channels to offer customers a unified and cohesive experience across all digital, mobile, offline and in-person channels.
A sales and marketing approach that gives customers a fully-integrated shopping experience across multiple touchpoints, including online, mobile and brick-and-mortar channels.
On page optimization
All of the actions that e-commerce brands, merchants and users can take directly within the website to raise its ranking within search engines results pages. These actions include technical optimization, content, internal links and structure and design.
A transaction type triggered by a customer who has their card details saved on file with a brand or merchant. The details are then tokenized in order for the card to be charged without additional authentication whenever the customer makes a purchase by hitting a “pay” or “buy” button or carrying out a payment trigger action on the site or app.
The total number steps an e-commerce brand or merchant takes between receiving a new order and delivering the order to the customer. These steps include warehousing, selecting and packing the product, shipping and sending an email to the customer to inform them that the order is en route to their specified location.
P, Q, R
A form of digital advertising where the advertiser pays a fee each time one of their ads is clicked. PPC ads can come in a wide range of shapes and sizes, consist of text, images, videos, or a combination of the three, and appear on search engines, websites, social media platforms, and other commerce interfaces.
The process of dynamically showing customers content, product recommendations or offers based on their previous actions or stored data, such as browsing behavior, purchase history and intent, demographics, referrals, and device usage.
A model or method used by e-commerce brands or merchants to determine the optimal price for a product or service. A well-executed pricing strategy results in a good balance between increased profits and customer value.
A marketing strategy that enables e-commerce companies to group complementary products into a single unit that has a lower price than if sold individually. This allows brands or merchants to increase both sales volume and average order value, as well as decrease promotion costs.
The process of gathering information about a product's purpose in order to determine how to develop it according to market fit. This can be conducted through surveying customers at key stages in the product lifecycle — pre-launch, testing, feedback, soft launch, and post-launch — to understand their needs and demands.
Also known as reserve-online-pickup-in-store; an e-commerce option that allows customers to shop on a website, select and reserve items, and then come into a physical store location to decide whether or not to purchase the items. This gives customers the freedom to shop around and also help guarantee they will receive their desired items.
SEO (search engine optimization)
Also known as search engine optimization; the process of improving a website to increase its visibility when potential customers search for products or services related to your business in search engines.
SERP (search engine results page)
Also known as search engine results page; the list of results returned by a search engine in response to a specific word or phrase query. The listings include the URL, the linked webpage’s title, a brief description of the page’s content, and sometimes links to points of interest on the page.
A software solution that displays shipping rates and other details for customers who are considering making a purchase at an online store. This automates the shipping process in a way that would otherwise need to be manually calculated internally or by a 3rd-party shipping service.
A software solution that displays estimated shipping rates for customers who are considering making a purchase at an online store. The rate estimates are usually based on figures from 3rd-party sources.
The range of options that e-commerce brands or merchants can offer to customers regarding the shipping of their products.
A subscription-based e-commerce platform that provides a storefront for businesses to sell physical and digital products. Brands or merchants can build Shopify stores or sell through an existing website, social media, blog posts, emails, or an in-person Shopify buy button.
Shopify order tracking
A feature within Shopify that allows an e-commerce brand or merchant to manage online shipments and notify customers about the status of their orders at any time, providing shipment tracking, estimated delivery dates and any other relevant order information.
The labels used to categorize a range of Shopify-related items, such as products, customer data, orders, transfers and returns. These tags — invisible to the customer — allow e-commerce brands or merchants to easily organize, search and add filters to a drop-down menu, without losing any important information in the process.
Shopping cart optimization
The process of improving a shopping cart’s design and usability in order to increase conversion rates while lowering cart abandonment rates. Consistency and reliability in branding and layout through the buyer’s journey builds trust and delivers a seamless customer experience.
The process of selling products or services directly and entirely through social media. From research and development to checkout, customers can make their purchase without ever leaving their social media platforms.
T, U, V
A group of potential customers with shared characteristics — such as age, income level, lifestyle, or decision-making tendencies — that e-commerce brands or merchants identify as the most likely consumers of their product or service.
A sales technique that encourages customers to spend more by buying a premium or higher-end version of the item they’re in the process of purchasing. Upgraded products are often shown in the form of comparison charts to help customers visualize the greater value they will receive by ordering a higher-priced item.
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