The big book of ecommerce terminology and what it all means.

A/B Testing

aka 'split testing'

This is the process of testing 2 different variables to determine which one performs the best. A/B testing can be applied to advertising, emails, web pages and more and is commonly used in ecommerce to help improve engagement and conversion rates.

AOV

Average Order Value

This is a key metric in ecommerce which determines how much, on average, a customer spends with a particular merchant per order. It is calculated by taking the total revenue generated from all orders and dividing it by the total number of orders in a given timeframe. For example, if a merchant generates £100,000 from 1,000 orders their AOV is £100 (£100,000 ÷ 1,000 = £100)

CMS

Content Management System

Web based software that lets you create, edit and modify digital content usually on a website. Shopify, Adobe Commerce, Centra, Woo Commerce and BIG Commerce are among the most popular content management systems for ecommerce websites.

CRM

Customer Relationship Management

CRM often relates to software which helps businesses manage relationships with their customers and prospective customers. By keeping customer interactions and sales data all in one place, businesses can track and nurture these relationships more effectively. We highly recommend Klaviyo, an ecommerce-centric marketing automation platform harnessing email and SMS. Speak with our CRM department to learn more.

CR

Conversion rate

Conversion rate is the percentage of users that take a desired action. In ecommerce this often means how many customers purchased vs the total number of customers that landed on your site. It is calculated by dividing the number of conversions by total visitors then multiplying this by 100. For example if 2,000 people made a purchase out of 100,000 site visitors the conversions rate is 2% (2,000 ÷ 100,000 × 100 = 2).

CRO

Conversion rate optimisation

CRO is the process of improving all consumer touch points from awareness right through to purchase with the aim of maximising sales. It includes everything from how and where you market your brand, who you target, your ad creatives, website landing pages, pdp, website copy, image and video assets, website UX/UI, checkout and more. Optimising all of these things and giving your customers an enjoyable, frictionless experience will ultimately lead to higher conversion rates.

CTA

Call to action

In marketing this is a prompt to persuade a person to take a desired action. For example ‘Buy Now’ or ‘Start Your Free Trial’. Often used on buttons, the CTA aims to help direct people to converting whether that’s making a purchase, subscribing to a newsletter or downloading a resource.

CTR

Click through rate

A metric used in digital marketing which shows how many people click on a link, ad or CTA vs how many people see it. It is measured by taking the number of clicks, dividing it by the number of impressions and then multiplying it by 100. For example 200 clicks from 1,000 impressions gives a 20% CTR (200 ÷ 1,000 × 100 = 20).

CXP

Customer experience platform

A tech platform that helps merchants create and deliver unified, personalised and engaging experiences for each individual customer across all channels from websites to apps, emails to social media. CXPs can recommend products based on browsing and/or purchase history, it can present personalised homepages and dynamically update content based on variables like location or weather. We work closely with Nosto - if you’re interested to learn how they or other CXPs can help grow your brand, please get in touch.

DTC

Direct to consumer

The practice of selling products directly to consumers instead of going down traditional retail channels like stores or marketplaces. Some of the advantages of the DTC model include owning the customer relationship (and data), full control over the UX (user experience), higher profit margins, and the ability to make data lead decisions. The choice between DTC and wholesale is not mutually exclusive and brands often operate on a hybrid model utilising the advantages of both.

RFM

Recency, Frequency and monetary value

RFM is a customer segmentation practice which splits customers in to cohorts based on their purchasing behaviours i.e. when they last made a purchase (recency), how many purchases they’ve made to date (frequency) and how much money they’ve spent to date (monetary value). This data helps marketeers tailor messaging to specific customers, identify their best customers and those at risk of churning.

ROAS

Return On Ad Spend

ROAS is a metric used in marketing to determine how much revenue is generated from every pound / dollar spent on advertising. It is calculated by dividing the revenue generated by the amount spent. For example if a merchant generates £5,000 from £1,000 in ad spend, their ROAS is 5 (£5,000 ÷ £1,000 = £5 for every £1 spent). This value, along with what ‘good’ looks like, can vary depending on industry, product, ad platform, audience targeting, ad creative, landing page experience and more. If you’re looking to improve your ROAS be sure to speak to our Paid Media department.

UX

User experience

In ecommerce this typically means the overall feeling a customer has engaging with a particular brand from discovery through to post-purchase and everything in between. It can relate to both the service they received and the product(s) they’ve bought. A good UX should be intuitive, enjoyable, efficient and easy making the path to purchase as frictionless as possible for your customer. A bad UX will be slow, confusing and frustrating which can have an adverse effect on conversion rates.