Become fluent in eCommerce metrics and terminology

A collection of glossary metrics, KPIs, and terms sourced from real eCommerce practitioners and personalization experts.

Director of Marketing, Dynamic Yield

The meteoric rise of personalization in eCommerce has created a new language for retail marketers to become fluent in if they want to understand how to implement the best omnichannel experiences. Here are some of the most important terms that eCommerce practitioners have to be familiar with.

Personalization Engines – Personalization engines apply context about individual users and their circumstances to select, tailor and deliver messaging such as content, offers and other interactions through digital channels in support of three use cases — marketing, digital commerce and customer experience. [Continue reading…]

Omnichannel Retailing – Omnichannel retailing is the practice by which a variety of channels are integrated and leveraged to influence a customer’s purchase decision. [Continue reading…]

Customer Data Platform (CDP) – A Customer Data Platform (CDP) is a marketer-operated system used to collect, connect, and unify data from the multiple sources and touchpoints associated with the journey a user takes with an organization. [Continue reading…]

Data Management Platform (DMP) – A data management platform is employed to analyze and activate first and third party data for smarter on-site and off-site experiences and campaign planning. [Continue reading…]

Customer Experience Management (CEM) – Customer experience management (CEM or CXM) is the process in which a company tracks and analyzes the different interactions and touchpoints a customer shares with a brand throughout the customer journey. [Continue reading…]

Customer Relationship Management Platform (CRM Platform) – A Customer Relationship Management Platform (CRM Platform) refers to the technology a company employs to manage interactions with a customer, capturing key information generated during those engagements. [Continue reading…]

POS System – Commonly associated with the cash register at the checkout counter in a retail store, POS systems operate and process transactions made across a variety of different industries. [Continue reading…]

Product Detail Page (PDP) – A product detail page (PDP) is a web page on an eCommerce site that presents the description of a specific product in view. The details displayed often include size, color, price, shipping information, reviews, and other relevant information customers may want to know before making a purchase. [Continue reading…]

Product Listing Pages (PLPs) – A product listing page (PLP) is a page on a website that presents a list of products based on a category or search query. This page is an essential element of the eCommerce experience as it funnels site visitors to product detail pages and closer to conversion. [Continue reading…]

Accordion Checkout – Accordion checkout is an approach to eCommerce website design in which each checkout step expands as you progress. A fusion of one-step checkout and multi-step checkout, accordion checkout is gaining popularity among top eCommerce sites after being popularized by Apple and Sephora. [Continue reading…]

One-Step Checkout – One-step checkout (also known as one page checkout) is an approach to eCommerce website design in which the entire checkout process is completed using a single form on one page. [Continue reading…]

Multi-Step Checkout – Multi-step checkout (also known as multi page checkout) is an approach to eCommerce website design in which the checkout process is spread over multiple pages. [Continue reading…]

Amazonization – The phenomenon of “Amazonization” refers to the wholesale disruption occurring across retail and eCommerce thanks to the leviathan-like presence of Amazon.com. Amazonization represents the spiritual successor to “Walmartization” that occurred across North America in the 1990s and early 2000s. [Continue reading…]

Retail Apocalypse – The term “retail apocalypse” refers to the perceived decline of brick and mortar retail in the United States due to the meteoric rise of eCommerce. While several iconic American retailers such as Sears and J.C. Penny have struggled mightily since the global financial crisis, overall evidence for the retail doomsday is mixed. [Continue reading…]

Macro Segmentation – Macro segmentation refers to the practice of dividing online traffic into a few sub-groups of visitors who differ from each other in one or two basic attributes such as location, gender, or an identified browsing pattern. [Continue reading…]

Micro Segmentation – Micro-segmentation refers to the practice of dividing online traffic into numerous small groups of visitors who share common interests and online browsing patterns. [Continue reading…]

Shopping Cart Abandonment – Shopping cart abandonment refers the process in which a shopper adds an item to the cart but leaves the site without completing checkout. The average shopping cart abandonment rate is around 68%. [Continue reading…]

Social Proof – Social Proof is a psychological phenomenon where people assume the actions of others in an attempt to reflect correct behavior for a given situation. In essence, it’s the notion that, since others are doing it, I should be doing it, too. [Continue reading…]

Conversion Rate – Internet marketers use conversion rates to measure how many website visitors perform a specific action. This could be completing a purchase, joining a mailing list, requesting more information, etc. [Continue reading…]

Conversion Rate Optimization (CRO) – Conversion Rate Optimization (CRO), in its simplest form, is finding ways to constantly improve the conversion rate on your website. It’s the method of using analytics, user feedback, a/b testing and more to improve the user experience and increase engagement. [Continue reading…]

Customer Lifetime Value (CLV) – Customer Lifetime Value is an estimation of the amount of revenue a customer will generate over the course of their relationship with your brand. It is a highly useful method eCommerce marketers use to estimate marketing costs and analyze an acquisition strategy. [Continue reading…]

Average Order Value (AOV) – In eCommerce, Average Order Value (AOV) measures the amount that is spent every time a customer places an order on a website or app. AOV can help you understand whether customers tend to order more expensive or less expensive products, the amount of products they typically order, and how much each transaction costs in relation to the transaction itself. [Continue reading…]

Average Revenue Per User (ARPU) – Average Revenue Per User (also known as Average Revenue Per Visitor or ARPV) is the average amount of revenue each user brings to your business. [Continue reading…]

Customer Acquisition Cost (CAC) – Customer acquisition cost refers simply to the average cost of convincing a customer to buy your product or service. It differs from cost-per lead (CPL) metric in that it does not only measure interest in buying a product but looks at what it actually costs to drive a conversion. [Continue reading…]

Cost of goods sold (COGS) – Cost of goods sold or COGS is the accumulated total of all business costs used to create any products or services which have been sold. An important metric on financial statements, when subtracted from gross profit, COGS helps measure a business’ profitability and evaluate efficiency. [Continue reading…]

Gross Merchandise Value (GMV) – Gross merchandise value is a business metric commonly used in eCommerce which measures the total volume of sales over a certain period of time, such as on a quarterly or annual basis. [Continue reading…]

Gross Profit – Gross profit refers to the total amount that a business earns in net sales after deducting or taking into account all of the variable costs and expenses associated with providing its services and goods such as discounts, allowances, raw materials, factory overhead, etc. [Continue reading…]

Bounce Rate – Let’s say a user lands on a page on your website and then exits the page without viewing additional pages. This is what the industry refers to as a bounce. Therefore, bounce rate would be the calculation of the percentage of visitors who visited a particular website and navigated away from it after only viewing one page. [Continue reading…]

Call to Action (CTA) – Typically, a “call to action” or “CTA” is a clickable item on a web page, which directs visitors down a conversion path. Most CTAs are links, images, banners and/or other graphical elements that users opt to click to either learn more information, supply user information and/or proceed with a purchase. [Continue reading…]

Recommendation Engine – A recommendation engine refers to the technology used to tailor which pieces of content or particular products will be shown to an individual while they interact on a brand’s digital properties. [Continue reading…]

Merchandising Rules – Merchandising rules are manual conditions that can programmed into an automated product recommendation engine. Merchandisers may require the ability, for example, to pin a specific item or to include or exclude a particular set of items from the automated recommendation results. [Continue reading…]

Collaborative Filtering – Collaborative filtering is an approach to product recommendations in which recommendations are made based on a user’s product interaction history combined with the interaction history of all other users on a site. Collaborative filtering collects and analyzes massive datasets of user behavior and activities, and mines that data to predict who will purchase what. [Continue reading…]

Affinity-Based Recommendations – For online retailers with large product catalogs, or publishers with large content feeds, affinity-based recommendation is a powerful method to make compelling product recommendations when and to whom they matter most. Affinity-based personalization algorithms gather behavioral data on consumers which are used to develop rich, multi-dimensional affinity profiles for every individual site user. [Continue reading…]

Bought Together Recommendation Strategy – “Bought Together” is a Product Recommendation strategy that recommends complementary products that are typically purchased together with the product currently viewed. [Continue reading…]

Triggered Emails – Triggered emails, also known as behavioral emails or transactional emails, are those sent automatically based on pre-defined events or conditions met by an individual through certain behaviors, actions, or other signals. [Continue reading…]

Open-Time Email Product Recommendations – Open-time email recommendations, also known as real-time product recommendations, refers to personalized email recommendations that are made and render upon the opening of the email by each individual recipient. [Continue reading…]

Systems of Insight (SoI) – Systems of Insight refers to the technology which aims to support and improve the customer experience through the consumption, collection, and analysis of data from the combined sources of traditional “systems of record” and “systems of engagement.” [Continue reading…]

Systems of Engagement (SoE) – Systems of Engagement (SoE) refers to the technology adopted by an organization to help facilitate and orchestrate the customer journey via more personalized, seamless interactions across the various touchpoints. [Continue reading…]