The Language of E-commerce: 10 Terms for Digital Business

The world of e-commerce is booming, and with it comes a specific set of vocabulary essential for anyone in digital sales, marketing, or operations. Understanding these terms is crucial for analyzing performance and discussing strategy. This guide covers 10 fundamental e-commerce terms.

To master this vocabulary and more, the BizVoc app offers dedicated decks for Sales and Marketing to help you speak the language of digital business with confidence.

Key E-commerce Vocabulary

• Conversion Rate

  The percentage of visitors to your website that complete a desired goal (a conversion) out of the total number of visitors. For e-commerce, this is typically a completed purchase.

  By simplifying our checkout process, we increased our conversion rate from 2% to 3.5%.
• Shopping Cart Abandonment

  When a potential customer starts a check-out process for an online order but drops out of the process before completing the purchase.

  Our high shopping cart abandonment rate suggests there might be an issue with our shipping costs.
• Average Order Value (AOV)

  The average total of every order placed with a merchant over a defined period of time. AOV = Total Revenue / Number of Orders.

  Implementing a 'frequently bought together' feature helped us increase our AOV by 15%.
• Customer Acquisition Cost (CAC)

  The total cost of sales and marketing efforts that are needed to acquire a new customer.

  Our current CAC is $50, which is sustainable given our customer lifetime value.
• Customer Lifetime Value (CLV)

  A metric that indicates the total revenue a business can reasonably expect from a single customer account throughout the business relationship.

  Our goal is to increase CLV by fostering loyalty through our rewards program.
• A/B Testing

  A method of comparing two versions of a webpage or app against each other to determine which one performs better.

  We are running an A/B test on the product page to see if a green or a blue 'Buy Now' button leads to more conversions.
• Fulfillment

  The complete process from a customer's order placement to the point of delivery. This includes order processing, picking, packing, and shipping.

  We outsourced our order fulfillment to a third-party logistics (3PL) provider to handle the increase in volume.
• Payment Gateway

  A service that processes credit card payments for e-commerce sites and traditional brick-and-mortar stores. (e.g., Stripe, PayPal).

  Integrating a reliable payment gateway is crucial for a smooth and secure checkout experience.
• Landing Page

  A standalone web page created specifically for a marketing or advertising campaign. It's where a visitor "lands" after they click on a link in an email, ad, or other digital location.

  Our Facebook ad directs traffic to a specific landing page for the new product launch.
• Upselling

  A sales technique where a seller invites the customer to purchase more expensive items, upgrades, or other add-ons to generate more revenue.

  When a customer adds the standard model to their cart, we use an upselling pop-up to show them the benefits of the premium version.

Navigate Digital Sales with Confidence

A firm grasp of these e-commerce terms will empower you to better understand your business's performance and contribute effectively to strategic discussions in the ever-growing world of digital commerce.

Ready to boost your digital business vocabulary? Join the BizVoc waitlist for specialized learning tools.