The Definitive Ecommerce Glossary

Third-Party Logistics - outsourcing warehousing, picking, packing, and shipping to external providers.

A controlled experiment comparing two versions to determine which performs better.

An automated sequence triggered when someone adds items to cart but doesn't checkout.

Triggered when someone begins checkout but doesn't complete purchase.

Content visible without scrolling when a page loads.

The traditional method where advertisers manually allocate budgets to each ad set.

Shopify's API for accessing and modifying store data including products, orders, and customers.

Automatically show personalized product recommendations based on browsing history.

Meta's automated sales campaign type, formerly Advantage+ Shopping (ASC).

How often AI assistants like ChatGPT and Gemini name, recommend or link to your brand when shoppers ask them what to buy.

Site search enhanced by machine learning to understand intent and improve relevance.

Amazon's membership program offering free fast shipping. Products must meet requirements for Prime badge.

The platform where third-party sellers manage their Amazon business.

MRR × 12, representing yearly subscription revenue.

The time period during which a conversion can be credited to an ad interaction.

Discounts applied without requiring a code, based on cart contents or conditions.

The average dollar amount customers spend per order/transaction.

Links from other websites pointing to your site. A major ranking factor.

Accepting orders for out-of-stock items with extended fulfillment timelines.

Reaching users based on their online behaviors, purchase history, and browsing patterns.

Smaller, modular components within Sections that can be individually configured.

Buy One Get One - promotional offer providing a free or discounted additional item.

The percentage of emails that failed to deliver, including hard and soft bounces.

The percentage of sessions that were NOT engaged—the inverse of engagement rate.

The lowest return on ad spend (ROAS) at which your ads pay for the product costs of the sales they bring in, so you neither make nor lose money on the first order.

Running ads with minimal audience restrictions, relying on platform algorithms.

Triggered when a known visitor views products but doesn't add to cart or purchase.

Combining multiple products at a total price lower than purchasing individually.

The main 'Add to Cart' button when multiple sellers offer the same product.

The time it takes to recover customer acquisition costs through gross profit.

A button, link, or prompt encouraging users to take a specific action.

A one-time, manually scheduled email or SMS send to a specific list or segment.

A Meta campaign setting where budget is managed at the campaign level by the algorithm.

The process a subscriber goes through when canceling, often including retention offers.

An HTML element indicating the preferred URL when duplicate content exists.

An ad format featuring multiple swipeable images or videos, each with its own link.

Industry benchmark for cart abandonment rates.

The percentage of shoppers who add items to their shopping cart but leave without completing the purchase.

California Consumer Privacy Act - giving residents rights over personal data.

A forced transaction reversal initiated by a cardholder through their bank.

Ending prices in .99 or .95 to appear lower. One of the most effective pricing tactics.

Automated conversational interface handling common questions and routing complex issues.

Shopify's modern framework for customizing checkout using app-based extensions.

The percentage of customers who stop purchasing over a given period.

A conversion occurring after a user clicks on an ad.

The share of people who saw your ad and clicked it: clicks divided by impressions, shown as a percentage.

The percentage of delivered emails where recipients clicked at least one link.

The percentage of email openers who clicked a link.

Analyzing groups of customers who share a common characteristic to understand behavior patterns.

A mobile ad format combining a cover image/video with product images below.

Software managing user consent for cookies and data collection.

The profit earned on each unit sold after deducting all variable costs.

A layered contribution margin analysis: CM1 (Revenue minus COGS), CM2 (CM1 minus fulfillment), CM3 (CM2 minus marketing).

The percentage of website visitors who complete a desired action, typically a purchase.

Industry benchmark for ecommerce conversion rates.

Meta's server-side tracking solution that sends conversion data directly from your server.

Google's metrics for page experience: LCP (loading), FID (interactivity), CLS (visual stability).

The cost of acquiring a specific action through a particular campaign or channel—such as a purchase, sign-up, or lead.

The average amount you pay each time someone clicks your ad. It is your ad spend divided by the number of clicks.

What you pay for every 1,000 times your ad is shown. "Mille" is Latin for thousand, so CPM is also called cost per thousand impressions.

How search engines discover pages by following links across the web.

The decline in ad performance when audiences see the same creative too frequently.

Delivers curated, varied product selections each shipment based on customer preferences.

A targeting option reaching people who have already interacted with your business.

The total cost of acquiring a new paying customer, including all marketing and sales expenses divided by the number of new customers acquired over a specific period.

The total revenue a business expects to earn from a single customer over the entire duration of their relationship.

Industry benchmark for customer retention rates.

The percentage of customers who remain active over a specific time period.

A direct measure of customer satisfaction, typically rated 1-5 after specific interactions.

A JavaScript object that stores and passes information between a website and tag management.

Uses machine learning to assign credit based on actual observed impact of each touchpoint.

The average number of days inventory sits in stock before selling.

Inventory that hasn't sold and is unlikely to sell, tying up capital.

The percentage of sent emails successfully accepted by recipients' email servers.

A pricing method where carriers charge based on package volume rather than actual weight.

Alphanumeric codes customers enter at checkout to receive a discount.

DomainKeys Identified Mail - an email authentication method adding a digital signature.

A policy protocol instructing servers how to handle emails that fail SPF or DKIM checks.

A third-party metric estimating a domain's ranking strength based on backlink profile.

Orders created manually in Shopify admin, often used for wholesale orders or custom quotes.

A fulfillment model where products ship directly from manufacturer to customer.

Selling directly to end customers through owned channels rather than retailers.

The process of recovering failed subscription payments through retry logic and communication.

Meta feature that automatically tests different combinations of ad elements.

Adjusting prices in real-time based on demand, competition, or customer segments.

A sales tax obligation triggered by reaching revenue thresholds in a state.

Industry benchmark for email click-through rates.

Industry benchmark for email open rates.

In GA4, a session lasting 10+ seconds, having a conversion, or 2+ page views.

The percentage of sessions that were engaged.

Industry benchmark for website engagement rates in GA4.

A Meta metric (scored 1-10) measuring how well your conversion data matches Facebook users.

Technology detecting when a user is about to leave the page to trigger retention messaging.

Fulfillment by Amazon - sellers ship inventory to Amazon warehouses for storage and fulfillment.

Fulfillment by Merchant - sellers handle their own fulfillment for marketplace orders.

The percentage of support issues resolved in a single interaction without follow-up.

The time between a customer submitting a support request and receiving the first response.

Customer data collected directly through owned channels like purchases and email subscriptions.

A single-touch attribution model that gives 100% credit to the first marketing touchpoint.

Limited-time discount creating urgency. Typically 24-48 hours with deep discounts.

An automated sequence of messages triggered by specific customer actions or events.

Systems and practices to detect and prevent fraudulent transactions.

Tracking user progression through conversion steps to identify drop-off points.

Google Analytics 4 - Google's current analytics platform using event-based tracking.

General Data Protection Regulation - European privacy law requiring consent for data collection.

Offering a free item when customers spend above a threshold.

The platform where retailers upload product data feeds for Shopping ads and free listings.

A tag management system for deploying tracking codes without modifying website code.

The percentage of revenue remaining after subtracting the cost of goods sold (COGS).

Industry benchmark for D2C gross margins.

A permanent delivery failure typically caused by invalid email addresses.

An architecture where the frontend is decoupled from the backend commerce functionality.

Visual representations showing where users click, scroll, and focus attention on web pages.

Software managing customer support operations—Gorgias, Zendesk, Help Scout are common for D2C.

The large, prominent area at the top of a page featuring main value proposition and CTA.

The percentage of viewers who continue watching after the initial hook.

A testing methodology where a portion of the audience is excluded from seeing ads.

How well video ads capture attention in the first 1-3 seconds.

Shopify's React-based framework for building custom headless storefronts.

The percentage of impressions your ads received compared to total eligible impressions.

TikTok ads appearing in the For You feed between organic content.

The percentage of delivered emails that land in the primary inbox versus spam.

The true lift in conversions directly caused by a marketing activity.

Search engines storing and organizing discovered pages in their database.

Partnering with influential content creators to promote products to their audiences.

Targeting users based on their stated interests, behaviors, and page likes.

A ratio measuring how many times inventory is sold and replaced over a given period.

Subscription cancellations caused by failed payments rather than customer choice.

Apple's privacy framework requiring apps to request permission before tracking users.

The process of discovering what terms people search for and their difficulty to rank.

Combining multiple individual SKUs into a single package or bundle before shipping.

Total cost to bring a product to your warehouse, including product cost, shipping, and duties.

Credits 100% of a conversion to the final marketing touchpoint before purchase.

A Plus-exclusive tool for scheduling and automating product launches and flash sales.

Total time between placing a purchase order and receiving goods in inventory.

A multi-touch model that distributes credit equally across all touchpoints.

Shopify's templating language used to customize storefront themes.

A collection of opted-in profiles, typically static once added.

Regular maintenance of email lists by removing invalid addresses and unengaged subscribers.

Real-time text-based support embedded on website. Higher satisfaction than email.

Real-time video broadcasts where hosts showcase products that viewers can purchase instantly.

Longer, more specific search phrases with lower volume but higher intent.

A targeting feature reaching new people who share characteristics similar to your existing customers.

Industry benchmark for the LTV to CAC ratio.

The ratio comparing customer lifetime value to customer acquisition cost. A 3:1 ratio is considered healthy.

AI systems that improve through experience without explicit programming.

Total revenue divided by total marketing spend, providing a holistic view of marketing efficiency.

Third-party platforms where multiple sellers list products—Amazon, Walmart, eBay, Etsy.

A statistical analysis technique measuring the impact of various marketing channels on sales.

Offers exclusive benefits like discounts and early access rather than recurring product delivery.

Industry benchmark for marketing efficiency ratio.

The HTML description shown in search results below the title. Not a ranking factor but influences CTR.

JavaScript code installed on your website that tracks visitor actions and conversions.

Custom data fields storing specialized information not captured in standard Shopify admin fields.

Advanced custom data structures for creating complex, reusable content entries.

Influencers with 10K-100K followers. Higher engagement rates and more affordable.

Industry benchmark for monthly subscription churn rates.

The predictable, normalized monthly revenue from active subscriptions.

Selling on multiple platforms without necessarily integrating the experiences.

Distributes credit for conversions across multiple touchpoints in the customer journey.

Testing multiple elements simultaneously to understand how different combinations interact.

Influencers with 1K-10K followers. Highest engagement rates.

A customer loyalty metric measuring likelihood to recommend on a 0-10 scale.

The percentage of total orders from first-time purchasers versus returning customers.

Industry benchmark for Net Promoter Score in ecommerce.

One connected customer experience across all channels with unified inventory and data.

Unified support across all channels with consistent customer context and history.

The percentage of delivered emails that recipients open.

Shopify's global hosting solution for Hydrogen storefronts.

How quickly pages load. Each additional second decreases conversions by approximately 7%.

Payment Card Industry Data Security Standard - security standards for handling credit card data.

Google's fully automated, AI-driven campaign type running across all Google properties.

Tailoring website content and product recommendations to individual users.

The warehouse process of selecting ordered items and packaging them for shipment.

Customers earn points on purchases redeemable for discounts or products.

An overlay appearing on top of page content for email capture, promotions, or announcements.

Assigns 40% credit to first touch, 40% to last touch, and 20% among middle touchpoints.

An automated sequence following a completed order, including confirmation and cross-sells.

A survey presented after checkout asking customers how they heard about the brand.

Using historical data to forecast future outcomes like churn or lifetime value.

Displaying a higher reference price to make the selling price appear more attractive.

A legal document explaining what data you collect and how it's used.

A structured data file containing all product information for shopping platforms.

Algorithmically suggested products based on browsing and purchase history.

Structured data for product pages enabling rich snippets in search results.

A single record for each contact containing all known information and activity history.

Percentage of customers who join your loyalty program. Target 20-30% of customer base.

Targeting new potential customers who haven't yet interacted with your brand.

Pricing strategies leveraging cognitive biases like charm pricing ($9.99 vs $10).

The average number of purchases a customer makes within a given time period.

A Google Ads diagnostic metric (1-10) evaluating keyword relevance and landing page quality.

Restricted times during which promotional SMS cannot be sent (before 8am, after 9pm).

Percentage of earned points/rewards actually redeemed by members.

Rewarding customers for referring friends, typically offering incentives to both parties.

The inventory level that triggers a new purchase order from suppliers.

The percentage of customers who make more than one purchase.

Showing ads to people who have previously visited your website or engaged with your content.

The revenue generated for every dollar spent on advertising.

Percentage of orders resulting in returns. Industry averages range from 15-30% for ecommerce.

The average revenue generated per website visitor, combining both conversion rate and average order value.

Segmentation based on Recency, Frequency, and Monetary value of purchases.

Return Merchandise Authorization - a numbered authorization initiating the return process.

Industry benchmark for return on ad spend.

Extra inventory kept as a buffer against unexpected demand spikes or supply disruptions.

State and local taxes on retail sales. Requirements vary by nexus in each state.

The number of visitors or conversions needed to reach statistical significance.

The practice of improving website visibility in organic search engine results.

The purpose behind a search query—informational, navigational, commercial, or transactional.

Reusable, customizable blocks of content that merchants can add and reorder in the Theme Editor.

The foundational group of people used to create a Lookalike Audience.

A dynamic grouping of profiles defined by specific conditions that automatically updates.

Dividing customers into groups based on shared characteristics for targeted marketing.

A score calculated by ISPs based on sending behavior, affecting inbox placement.

A tracking method where data is collected on your server rather than the user's browser.

Video playback of individual user sessions showing mouse movement and interactions.

A group of user interactions with a website within a given timeframe.

Shopify's accelerated checkout saving customer payment info for one-click purchases.

A Plus-exclusive tool that identifies high-intent buyers using aggregate Shopify network data.

A visual automation platform for creating custom workflows without code.

Server-side code running in Shopify's infrastructure to customize backend commerce logic.

A cross-border selling feature allowing merchants to manage international sales from a single store.

Shopify's enterprise-level plan for high-volume merchants typically generating $1M+ annually.

Social media posts with tagged products allowing direct purchase without leaving the platform.

Allowing subscribers to temporarily skip an order or pause without canceling.

Stock Keeping Unit - a unique alphanumeric code identifying and tracking individual products.

Google's automated bid strategies using machine learning to optimize for conversions.

Buying and selling products directly through social media platforms.

Evidence that others trust and value your brand—reviews, testimonials, trust badges.

A temporary delivery failure caused by full inboxes, server issues, or message size limits.

The percentage of recipients who mark your email as spam. Should remain below 0.1%.

TikTok's native ad format that boosts organic posts as paid advertisements.

Sender Policy Framework - a DNS-based email authentication protocol.

The probability that observed differences between variants are real rather than random chance.

When inventory reaches zero and products become unavailable for purchase.

Shopify's GraphQL API for building custom shopping experiences outside standard themes.

Code added to pages that helps search engines understand content context.

Automated recurring delivery of consumable products at a discount (typically 10-20% off).

A self-service interface where subscribers manage their accounts and preferences.

An automation designed to phase out unengaged subscribers to improve deliverability.

Telephone Consumer Protection Act - US law requiring consent before sending marketing SMS.

A pre-designed template determining the look, feel, and functionality of a Shopify store.

The percentage of video viewers who stop scrolling to watch your ad.

Increasing discount percentages at higher spending thresholds.

Multiple membership levels with increasing benefits based on spending or engagement.

TikTok's native commerce feature allowing users to purchase products within the app.

A multi-touch model giving more credit to touchpoints closer to the conversion.

The HTML title element displayed in search results and browser tabs.

A Shopify-focused analytics platform providing attribution and real-time dashboards.

Visual indicators of security and credibility—payment logos, certifications, guarantees.

Content creators who produce user-generated-style content for brands to use in paid advertising.

The average number of items purchased per order.

The percentage of recipients who opt out of future emails. Healthy lists see 0.2-0.5% per send.

Content created by customers, creators, or fans rather than the brand itself.

Tracking tags added to URLs to identify traffic sources in analytics.

A clear statement explaining why customers should buy from you.

Value Added Tax - consumption tax used in EU and many other countries.

A conversion that occurs after a user views an ad but doesn't click on it.

Systematic collection and analysis of customer feedback to understand needs and pain points.

Intentional cancellations initiated by customers.

An automated sequence triggered when someone subscribes, introducing your brand.

Brands gaining permission to run paid ads through an influencer's social account.

Selling products in bulk to retailers who resell to end consumers.

An automated sequence targeting customers who haven't purchased in a defined period.

Data intentionally and proactively shared by customers, such as preferences and intentions.