From understanding the various KPIs to explaining the subtleties of UX and design, we've covered all the bases to ensure you have a good understanding of the e-commerce ecosystem.
November 27, 2023
Understanding the language of e-commerce is key to evolving and growing your brand in this ever-changing industry. This article is your guide to mastering the vast array of acronyms you'll come across.
From understanding the various KPIs to explaining the subtleties of UX and design, we've covered all the bases to ensure you have a good understanding of the e-commerce ecosystem.
So, whether you're looking to improve your professional vocabulary, streamline your business operations or simply satisfy your curiosity, this article is your gateway to mastering the language of e-commerce.
In the e-commerce industry, marketing and advertising play a central role.
These strategies aren't just about promoting products; they're about building relationships, understanding customer behavior and leveraging data to make decisions.
The acronyms in this category represent essential concepts and tools for understanding digital marketing.
SEO (Search Engine Optimization): The process of optimizing a website to rank higher in search engine results pages (SERPs), increasing organic (non-paid) web traffic.
DA (Domain Authority): A search engine ranking score that predicts how likely a website is to rank on search engine result pages (SERPs).
PA (Page Authority): A score developed by Moz that predicts how well a specific page will rank on search engine result pages (SERP). PA scores range from one to 100, with higher scores corresponding to a greater ability to rank.
SERP (Search Engine Results Page): The page displayed by search engines in response to a query by a searcher. The main component of the SERP is the listing of results returned by the search engine in response to a keyword query.
SEM (Search Engine Marketing): A broader term that encompasses SEO and other search marketing tactics, such as paid advertising campaigns, to increase visibility in search engine results.
SMM (Social Media Marketing): The use of social media platforms to connect with your audience to build your brand, increase sales, and drive website traffic.
GA (Google Analytics): A web analytics service offered by Google that tracks and reports website traffic.
SWOT (Strengths, Weaknesses, Opportunities, Threats): A strategic planning technique used to help a person or organization identify strengths, weaknesses, opportunities, and threats related to business competition or project planning.
ASO (App Store Optimization): The process of optimizing mobile apps to rank higher in an app store's search results. The higher your app ranks in an app store's search results, the more visible it is to potential customers.
ORM (Online Reputation Management): The practice of crafting strategies that shape or influence the public perception of an organization, individual or other entity on the Internet.
BRM (Brand Reputation Management): Similar to ORM, this focuses specifically on maintaining and shaping the public image and reputation of a brand.
CMS (Content Management System): A software application that enables users to create, edit, organize, and publish content. CMSs are commonly used for enterprise content management (ECM) and web content management (WCM).
USP (Unique Selling Proposition): A factor that differentiates a product from its competitors, such as the lowest cost, the highest quality, or the first-ever product of its kind.
MVP (Minimum Viable Product): A version of a product with just enough features to satisfy early customers and provide feedback for future product development.
KISS (Keep It Simple Stupid): A design principle that states that most systems work best if they are kept simple rather than made complicated.
FOMO (Fear Of Missing Out): A pervasive apprehension that others might be having rewarding experiences from which one is absent. This social anxiety is characterized by a desire to stay continually connected with what others are doing.
RFM (Recency, Frequency, Monetary): A marketing analysis tool used to identify a firm's best customers by measuring and analyzing spending habits. (read our article about RFM segmentation)
PIM (Product Information Management): A system used by businesses to centrally manage and harmonize all the technical and marketing information of their products.
DFA (Data Feed Optimization): The process of enhancing and refining product data feeds to ensure that they are accurate, comprehensive, and formatted correctly for use in digital advertising, e-commerce platforms, or product comparison websites.
Understanding and monitoring Key Performance Indicators (KPIs) is crucial for driving business success and growth.
This category delves into the various KPIs that are pivotal in the e-commerce industry, offering insights into customer behavior, operational efficiency, financial performance, and overall market dynamics.
KPI (Key Performance Indicator): Quantifiable measures that help retailers and businesses evaluate their performance against their strategic objectives and operational goals
PPC (Pay Per Click): An advertising model where advertisers pay a fee each time one of their ads is clicked. It's a way of buying visits to your site, rather than attempting to “earn” those visits organically.
CPM (Cost Per Mille): Also known as cost per thousand, this term refers to the price of 1,000 advertisement impressions on one webpage. If a website publisher charges $2.00 CPM, that means an advertiser must pay $2.00 for every 1,000 impressions of its ad.
CPC (Cost Per Click): Similar to PPC, this is the actual price paid for each click in your pay-per-click (PPC) marketing campaigns.
CPA (Cost Per Acquisition): A pricing model where companies are charged by an advertisement publisher for each new customer acquired through an advertisement.
CTR (Click Through Rate): The ratio of users who click on a specific link to the number of total users who view a page, email, or advertisement. It is used to gauge the success of an online advertising campaign.
ROAS (Return On Advertising Spend): A marketing metric that measures the efficacy of a digital advertising campaign. ROAS helps online businesses evaluate which methods are working and how they can improve future advertising efforts.
AOV (Average Order Value): The average dollar amount spent each time a customer places an order on a website or mobile app.
LTV (Lifetime Value): A prediction of the net profit attributed to the entire future relationship with a customer.
CAC (Customer Acquisition Cost): This metric represents the total cost of acquiring a new customer, encompassing all the marketing and advertising expenses involved in guiding a consumer from awareness to purchase.
CPL (Cost Per Lead): The amount it costs your marketing organization to acquire a lead. This is a crucial metric in determining the effectiveness of marketing campaigns.
MRR (Monthly Recurring Revenue): A measure of your predictable revenue stream. It’s used by subscription-based models where customers pay the same amount each month.
ARR (Annual Recurring Revenue): Similar to MRR, this is a measure of revenue components that are recurring in nature on an annual basis.
ACV (Annual Contract Value): Typically used in subscription and service businesses, this measures the value of the contract over a 12-month period.
CSAT (Customer Satisfaction): A measure of how products and services supplied by a company meet or surpass customer expectation.
NPS (Net Promoter Score): A management tool that can be used to gauge the loyalty of a firm's customer relationships. It serves as an alternative to traditional customer satisfaction research.
ARPU (Average Revenue Per User): A measure used primarily by consumer communications, digital media, and networking companies, defined as the total revenue divided by the number of subscribers.
ROI (Return on Investment): A measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of several different investments.
P&L (Profit and Loss): A financial statement that summarizes the revenues, costs, and expenses incurred during a specified period, usually a fiscal quarter or year.
The importance of User Experience (UX) and Design cannot be overstated.
This category explores the critical role that design principles and user experience play in the success of e-commerce brands.
It delves into how effectively designed interfaces, intuitive navigation, aesthetic appeal, and customer-centric approaches contribute to creating engaging, easy-to-use, and satisfying online shopping experiences.
UX (User Experience): The overall experience of a person using a product such as a website or a computer application, especially in terms of how easy or pleasing it is to use.
UI (User Interface): The means by which the user and a computer system interact, in particular the use of input devices and software.
CTAs (Call To Actions): A marketing term for any design to prompt an immediate response or encourage an immediate sale. CTAs can be a direct instruction to do something, such as ‘Call now’, ‘Find out more’ or ‘Visit a store today’.
CR (Conversion Rate): The percentage of visitors to a website that complete a desired goal (a conversion) out of the total number of visitors. A high conversion rate is indicative of successful marketing and web design.
CRO (Conversion Rate Optimization): A system for increasing the percentage of visitors to a website that convert into customers, or more generally, take any desired action on a webpage.
BR (Bounce Rate): The percentage of visitors to a particular website who navigate away from the site after viewing only one page.
PV (Page Views): A metric used in web analytics to denote the total number of pages viewed on a website.
UV (Unique Visitors): Individuals who have visited a site at least once during a reporting period. This metric is used in web analytics to determine the number of people who have visited a website.
Sales and customer relationship in e-commerce encompasses a wide range of practices and metrics, all aimed at enhancing customer experience and maximizing revenue.
The acronyms in this category are crucial for understanding and improving the interactions between e-commerce businesses and their customers.
CRM (Customer Relationship Management): A technology for managing all your company's relationships and interactions with customers and potential customers. It helps improve business relationships, streamline processes, and improve profitability.
POS (Point Of Sale): The time and place where a retail transaction is completed. It's the point at which a customer makes a payment to the merchant in exchange for goods or after provision of a service.
CLV (Customer Lifetime Value): A prediction of the net profit attributed to the entire future relationship with a customer.
RMA (Return Merchandise Authorization): A part of the process of returning a product in order to receive a refund, replacement, or repair during the product's warranty period.
COD (Cash On Delivery): A type of transaction in which the recipient makes payment for a good at the time of delivery.
FCR (First Contact Resolution): The ability of a business to resolve customer problems, questions, or needs the first time they call or contact support, without the need for a follow-up.
SLA (Service Level Agreement): A commitment between a service provider and a client. Particular aspects of the service – quality, availability, responsibilities – are agreed upon between the service provider and the service user.
RFQ (Request For Quote): A business process in which a company asks multiple vendors to submit price quotes for the purchase of specific products or services.
RFP (Request For Proposal): A document that solicits proposals, often made through a bidding process, by an agency or company interested in procurement of a commodity, service, or valuable asset.
RFI (Request For Information): A standard business process whose purpose is to collect written information about the capabilities of various suppliers.
BANT (Budget, Authority, Need, Timeline): A sales qualification framework used to identify and pursue the most qualified prospects based on their Budget, Authority, Needs, and Timeline.
Operations and logistics involve complex and critical processes that ensure the efficient movement of goods and management of inventory.
The acronyms in this category are essential in understanding the nuances of these processes, which are fundamental to the success of any e-commerce business.
SKU (Stock Keeping Unit): A unique code consisting of letters and numbers that identifies a product. SKUs are used to track inventory in warehouses and retail outlets.
ASIN (Amazon Standard Identification Number): A 10-character alphanumeric unique identifier assigned to every product listed on Amazon's website to track inventory, index catalog pages for searching and referencing, and simplify the process of locating and managing products.
FBA (Fulfillment By Amazon): A service offered by Amazon where third-party sellers store their products in Amazon's fulfillment centers, and Amazon handles the storage, packaging, and shipping of these products to customers.
WMS (Warehouse Management System): A software solution that offers visibility into a business's entire inventory and manages supply chain fulfillment operations from the distribution center to the store shelf.
TMS (Transportation Management System): A platform that is designed to streamline the shipping process. It is a subset of supply chain management concerning transportation operations.
SCM (Supply Chain Management): The oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer.
EDI (Electronic Data Interchange): The transfer of data from one computer system to another by standardized message formatting, without the need for human intervention.
JIT (Just In Time): An inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs.
FTL (Full Truck Load): A type of shipping mode where a truck carries one dedicated shipment. In other words, the journey is reserved for one shipment only.
LTL (Less Than Truckload): A shipping mode for relatively small freight. It consolidates shipments from multiple customers into a single truckload.
3PL (Third-Party Logistics): A service that allows businesses to outsource operational logistics from warehousing, all the way through to delivery, thus enabling the business to focus on other parts of their operations.
4PL (Fourth-Party Logistics): A model where a business outsources both its supply chain management and logistics to another company.
FIFO (First In, First Out): An inventory management strategy where the products that were stocked first are the ones to be sold, used, or disposed of first.
LIFO (Last In, First Out): The opposite of FIFO, this inventory strategy involves selling, using, or disposing of the most recently produced or acquired products first.
FOB (Free On Board): A term in international commercial law specifying at what point respective obligations, costs, and risk involved in the delivery of goods shift from the seller to the buyer.
CIF (Cost, Insurance, Freight): A trade term requiring the seller to arrange for the carriage of goods by sea to a port of destination and provide the buyer with the documents necessary to obtain the goods from the carrier.
MOQ (Minimum Order Quantity): The smallest quantity of a certain product that a supplier is willing to sell. If an order is placed below this quantity, the supplier will not fulfill the order.
ETA (Estimated Time of Arrival): The time when a ship, vehicle, aircraft, cargo, or emergency service is expected to arrive at a certain place.
ETD (Estimated Time of Departure): Similar to ETA, this is the time at which a vehicle, ship, or aircraft is expected to depart from a certain point.
POD (Proof Of Delivery): A method to establish the fact that the recipient received the contents sent by the sender.
BOPIS (Buy Online, Pick-up In Store): A strategy that allows customers to shop and make purchases online and then pick up their order at a physical store location.
BOPAC (Buy Online, Pickup at Curbside): Similar to BOPIS but customers can pick up their orders at a designated curbside location of the store.
This category encompasses a range of tools, platforms, and protocols that form the backbone of online business operations.
These acronyms represent fundamental concepts and technologies that are integral to developing, maintaining, and enhancing e-commerce websites and services.
API (Application Programming Interface): A set of rules and protocols for building and interacting with software applications. APIs enable different software systems to communicate with each other.
SSL (Secure Sockets Layer): A standard security technology for establishing an encrypted link between a server and a client—typically a web server and a browser, or a mail server and a mail client.
ERP (Enterprise Resource Planning): Integrated management of main business processes, often in real-time and mediated by software and technology. It's a type of software that organizations use to manage day-to-day business activities.
HTML (HyperText Markup Language): The standard markup language for documents designed to be displayed in a web browser.
CSS (Cascading Style Sheets): A style sheet language used for describing the presentation of a document written in HTML or XML.
SQL (Structured Query Language): A domain-specific language used in programming and designed for managing data held in a relational database management system.
REST (Representational State Transfer): A set of architectural principles used for designing networked applications. It uses a stateless, client-server, cacheable communications protocol.
SOAP (Simple Object Access Protocol): A messaging protocol specification for exchanging structured information in the implementation of web services in computer networks.
WWW (World Wide Web): An information system where documents and other web resources are identified by Uniform Resource Locators (URLs), which may be interlinked by hypertext, and are accessible over the Internet.
IP (Internet Protocol): The principal communications protocol in the Internet protocol suite for relaying datagrams across network boundaries.
ISP (Internet Service Provider): A company that provides individuals and other companies access to the Internet and other related services such as website building and virtual hosting.
IoT (Internet of Things): The interconnection via the Internet of computing devices embedded in everyday objects, enabling them to send and receive data.
NFC (Near Field Communication): A set of communication protocols for communication between two electronic devices over a distance of 4 cm or less.
VR (Virtual Reality): A simulated experience that can be similar to or completely different from the real world. Applications of virtual reality include entertainment, education, and business.
AR (Augmented Reality): An interactive experience of a real-world environment where the objects that reside in the real world are enhanced by computer-generated perceptual information.
AI (Artificial Intelligence): The simulation of human intelligence in machines that are programmed to think like humans and mimic their actions.
ML (Machine Learning): A branch of artificial intelligence and computer science which focuses on the use of data and algorithms to imitate the way that humans learn, gradually improving its accuracy.
NFT (Non-Fungible Token): A unit of data stored on a digital ledger, called a blockchain, that certifies a digital asset to be unique and therefore not interchangeable.
RFID (Radio-Frequency Identification): A technology that uses electromagnetic fields to automatically identify and track tags attached to objects, which contain electronically stored information.
RSS (Really Simple Syndication): A type of web feed that allows users and applications to access updates to online content in a standardized, computer-readable format.
This category is crucial for the management of financial transactions, security, and overall financial health of an online business.
The following acronyms are central to understanding the various aspects of e-commerce finance and payment systems.
PCI DSS (Payment Card Industry Data Security Standard): A set of security standards designed to ensure that all companies that accept, process, store, or transmit credit card information maintain a secure environment.
CVV (Card Verification Value): A security feature for card-not-present transactions, providing a check of the card’s legitimacy. It’s the 3- or 4-digit number found on credit and debit cards.
ACH (Automated Clearing House): An electronic network for financial transactions in the United States that processes large volumes of credit and debit transactions in batches.
TCO (Total Cost of Ownership): The purchase price of an asset plus the costs of operation, assessing the total expenditure over the life of an asset.
AR (Accounts Receivable): The balance of money due to a firm for goods or services delivered or used but not yet paid for by customers.
AP (Accounts Payable): The amount of money owed by a business to its suppliers shown as a liability on a company's balance sheet.
VAT (Value Added Tax): A type of tax that is levied incrementally, based on the increase in value of a product or service at each stage of production or distribution.
EFT (Electronic Funds Transfer): The electronic transfer of money from one bank account to another, either within a single financial institution or across multiple institutions.
POS (Point of Sale): The point at which a customer makes a payment to the merchant in exchange for goods or services.
NFC (Near Field Communication): A set of communication protocols that enable two electronic devices, one of which is usually a portable device such as a smartphone, to establish communication by bringing them within close proximity.
EMV (Europay, MasterCard, and Visa): A global standard for cards equipped with computer chips and the technology used to authenticate chip-card transactions.
KYC (Know Your Customer): The process of a business verifying the identity of its clients and assessing potential risks of illegal intentions for the business relationship.
AML (Anti-Money Laundering): A set of procedures, laws, and regulations designed to stop the practice of generating income through illegal actions.
FX (Foreign Exchange): The exchange of one currency for another or the conversion of one currency into another currency.
COGS (Cost of Goods Sold): The direct costs attributable to the production of the goods sold in a company.
OPEX (Operational Expenditure): The day-to-day expenses necessary for the business to function and maintain its current state. In the context of a company, operational expenditures include expenses such as rent, utilities, payroll, and maintenance costs.
RTP (Real-Time Processing): In payment processing, it refers to immediate processing of transactions, which is crucial in e-commerce.
In e-commerce, navigating the complex landscape of legal and compliance issues is crucial.
This category encompasses a range of regulations, acts, and agreements that ensure businesses operate ethically, protect customer data, and adhere to legal standards.
Understanding these acronyms is fundamental for any e-commerce business to ensure compliance and avoid legal pitfalls.
GDPR (General Data Protection Regulation): A regulation in EU law on data protection and privacy in the European Union and the European Economic Area. It also addresses the transfer of personal data outside the EU and EEA areas.
CCPA (California Consumer Privacy Act): A state statute intended to enhance privacy rights and consumer protection for residents of California, United States. It gives consumers more control over the personal information that businesses collect about them.
PII (Personally Identifiable Information): Information that can be used on its own or with other information to identify, contact, or locate a single person, or to identify an individual in context.
DMCA (Digital Millennium Copyright Act): A 1998 United States copyright law that criminalizes production and dissemination of technology, devices, or services intended to circumvent measures that control access to copyrighted works.
COPPA (Children’s Online Privacy Protection Act): A United States federal law, passed in 1998, which imposes certain requirements on operators of websites or online services directed toward children under 13 years of age, and on websites or online services that knowingly collect information from children under 13.
SOX (Sarbanes-Oxley Act): An act passed by U.S. Congress in 2002 to protect investors from the possibility of fraudulent accounting activities by corporations. It mandates strict reforms to improve financial disclosures from corporations and prevent accounting fraud.
HIPAA (Health Insurance Portability and Accountability Act): A United States legislation that provides data privacy and security provisions for safeguarding medical information.
FCPA (Foreign Corrupt Practices Act): A United States federal law known primarily for two of its main provisions, one that addresses accounting transparency requirements under the Securities Exchange Act of 1934 and another concerning bribery of foreign officials.
EULA (End User License Agreement): A legal contract between a software application author or publisher and the user of that application. The EULA, often a form filled out by the user, specifies in detail the rights and restrictions which apply to the use of the software.
TOS (Terms of Service): Legal agreements that set out the rules, requirements, restrictions, and limitations that a user must agree to and follow in order to use or access a website or mobile app.
In e-commerce, the underlying business strategies play a pivotal role in defining the strategy, customer engagement, and revenue streams of online enterprises.
This category unravels the various frameworks and structures that online businesses adopt to thrive in the digital marketplace.
DNVB (Digitally Native Vertical Brand): A type of business model where a company is born online and controls the entire process of their product, from its design and manufacturing to its marketing and distribution, primarily through digital channels.
B2B (Business to Business): A form of transaction between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer.
B2C (Business to Consumer): The process of selling products and services directly between a business and consumers who are the end-users of its products or services.
C2C (Consumer to Consumer): A business model that facilitates an environment where customers can trade with each other, typically in an online environment.
B2G (Business to Government): Refers to the exchange of services, products, information, or transactions between businesses and government entities.
D2C (Direct to Consumer): A business model where companies sell directly to consumers, cutting out intermediaries such as retailers, wholesalers, and distributors.
C2B (Consumer to Business): A business model where individuals create value, and businesses consume that value. For example, when an individual writes reviews that are used by a company for marketing purposes.
B2E (Business to Employee): A business model where businesses focus on providing services and products to their employees.
VOD (Video On Demand): A media distribution system that allows users to access videos without a traditional video playback device and the constraints of a typical static broadcasting schedule.
OTT (Over The Top): Refers to content providers that distribute streaming media as a standalone product directly to viewers over the Internet, bypassing telecommunications, multichannel television, and broadcast television platforms.
G2C (Government to Citizen): Electronic communication and transactional services between government and its citizens, often involving information dissemination, basic services like renewing licenses, or providing direct services like paying taxes.
O2O (Online to Offline): A business strategy that draws potential customers from online channels to make purchases in physical stores.
E2E (End to End): Systems or solutions that cover every stage of a process from the beginning to the end, providing a complete product or service that doesn't require the user to work with multiple separate software or companies.
PPS (Pay Per Sale): A commission model where affiliates or partners are paid a percentage of all qualified sales.
SaaS (Software as a Service): A software distribution model in which a third-party provider hosts applications and makes them available to customers over the Internet.
PaaS (Platform as a Service): A cloud computing service that provides a platform allowing customers to develop, run, and manage applications without the complexity of building and maintaining the infrastructure.
IaaS (Infrastructure as a Service): A form of cloud computing that provides virtualized computing resources over the internet. In an IaaS model, a third-party provider hosts hardware, software, servers, storage, and other infrastructure components.