The Ultimate Ecommerce Glossary (Over 100 Terms Explained Simply)

Marketing & Metrics

A/B Testing: Comparing two versions of a page or ad to see which performs better.
AOV (Average Order Value): Total revenue divided by number of orders. Measures how much each customer spends.
CAC (Customer Acquisition Cost): How much it costs to get a new customer.
Conversion Rate: The percentage of visitors who take a desired action (like buying).
CRO (Conversion Rate Optimisation): Improving your site to convert more visitors into customers.
Email Flow: Automated sequence of emails triggered by user behaviour.
LTV (Customer Lifetime Value): The total revenue expected from a single customer over time.
NPS (Net Promoter Score): Measures customer loyalty and satisfaction.
Upsell: Offering an upgrade or add-on after someone has committed to buying.
UTM Parameters: URL tags used to track marketing campaigns in tools like GA4.

Checkout: The process where the transaction is completed.
ESP (Email Service Provider): Tools like Klaviyo, Mailchimp, Omnisend.
Fulfilment: Packing and shipping your products.
Inventory Management: Tracking product stock and availability.
Merchant Account: A bank account that allows businesses to accept card payments.
PDP (Product Detail Page): The page displaying product information.
Pixel: Code used to track visitor behaviour and ad performance.
Product Feed: A structured file for syncing products with Google, Meta, or marketplaces.
Shopify: The most widely used ecommerce platform.
SKU (Stock Keeping Unit): A unique identifier for each product variation.
Wishlist: A feature that lets users save products for future purchase.

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Affiliate Marketing: Referring traffic to your store in exchange for commission.
BNPL (Buy Now, Pay Later): Payment methods like Afterpay or Klarna.
Bounce Rate: The % of visitors who leave after seeing one page.
CPA (Cost Per Acquisition): Cost of converting one customer.
CPC (Cost Per Click): Amount paid per ad click.
CTR (Click Through Rate): The ratio of users who click on an ad or link.
Facebook Ads Manager: Platform for running Meta ads (Facebook and Instagram).
GA4 (Google Analytics 4): Tool for analysing website behaviour.
Lookalike Audience: A Meta audience built from your customer data to find similar users.
PPC (Pay-Per-Click): Ad model where you pay per click (Google, Bing, Meta).
Retargeting: Ads shown to visitors who didn’t buy on their first visit.

Abandoned Cart: A user adds items but doesn’t complete checkout.
Cart Recovery: Strategies to bring those users back.
Chargeback: A customer-initiated reversal of a transaction.
Hero Image: The main banner on your homepage or landing page.
Live Chat: Real-time customer support widget.
Omnichannel: Seamless experience across channels (website, social, email, SMS).
Post-Purchase Flow: Emails sent after a purchase to educate, cross-sell, or request a review.
Review App: A tool to collect and display customer reviews.
Social Proof: Reviews, ratings, and testimonials that influence buying.
Trust Badges: Icons that communicate security or guarantees.

3PL (Third-Party Logistics): Companies that store and ship your inventory.
Attribution: Identifying which ad, channel, or campaign gets credit for a sale.
Cohort Analysis: Studying how different customer groups behave over time.
Headless Ecommerce: Frontend and backend are decoupled for more flexibility.
LimeSpot / Personalization Engine: Recommends products in real-time based on behaviour.
Zero-Party Data: Information your customers voluntarily give you, like quiz answers.
Webhooks: Messages sent between apps to automate processes.
WooCommerce: WordPress-based ecommerce plugin.

What is AOV and why does it matter?
It’s your average order value — higher AOV = more revenue per sale without more traffic.

What’s the difference between LTV and CAC?
LTV is what a customer brings in; CAC is what it costs to get them. You want LTV to be 3–5x CAC.

What is CRO in ecommerce?
Conversion rate optimisation — improving your store so more visitors turn into buyers.

Is Shopify better than WooCommerce?
Depends on your goals. Shopify is easier for most brands, WooCommerce offers more flexibility for developers.

Understanding these terms is one thing. Applying them to grow your business is another.

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