| Term | Definition | Category |
|---|---|---|
| E-commerce | The buying and selling of goods or services using the internet, and the transfer of money and data to complete these transactions. E-commerce encompasses a wide range of online business activities, from retail shopping and subscription services to online marketplaces and digital product delivery. It has transformed traditional commerce by removing geographical limitations, enabling 24/7 shopping, providing wider product selection, and creating new business models that wouldn’t be possible in physical retail environments. | Core Concept |
| B2C (Business-to-Consumer) | The most common form of e-commerce, where businesses sell products or services directly to end consumers. B2C e-commerce typically involves shorter sales cycles, lower order values, higher transaction volumes, and more emotionally-driven purchasing decisions compared to B2B. Examples include retail websites like Amazon, subscription services like Netflix, and direct-to-consumer brands like Warby Parker or Casper. | Business Model |
| B2B (Business-to-Business) | E-commerce transactions between businesses, such as a manufacturer selling to wholesalers or retailers, or a wholesaler selling to retailers. B2B e-commerce typically involves larger order values, longer sales cycles, more complex buying processes with multiple stakeholders, account-based pricing, and often customized online purchasing portals. Examples include Grainger, Alibaba.com, and industry-specific wholesale platforms. | Business Model |
| C2C (Consumer-to-Consumer) | Online platforms that facilitate transactions between individual consumers. C2C e-commerce enables people to sell directly to each other, often through marketplace platforms that provide listing capabilities, search functionality, review systems, and payment processing. Examples include eBay, Facebook Marketplace, Etsy (for handmade items), and specialized marketplaces like StockX or Poshmark for specific categories. | Business Model |
| D2C (Direct-to-Consumer) | A business model where manufacturers or product creators sell directly to end consumers, bypassing traditional intermediaries like distributors, wholesalers, or retailers. D2C brands typically control their entire customer experience from production to delivery, focusing on building direct relationships with customers. This model became prominent with digitally-native vertical brands like Dollar Shave Club, Glossier, Allbirds, and Casper, though many traditional manufacturers have also developed D2C channels. | Business Model |
| Marketplace | An e-commerce platform that connects multiple third-party sellers with consumers in a single shopping environment. Marketplaces typically handle transaction processing and customer service infrastructure while third-party merchants manage inventory and fulfillment. Major marketplaces include Amazon, eBay, Walmart Marketplace, and Etsy. Many marketplaces operate on a hybrid model, offering both their own products and third-party listings. | Business Model |
| E-commerce Platform | Software that enables businesses to create and manage online stores, process transactions, and handle essential e-commerce functions. E-commerce platforms range from simple website builders with shopping cart functionality to comprehensive enterprise solutions that integrate with complex business systems. These platforms typically provide product catalog management, shopping cart functionality, checkout processing, payment gateway integration, and order management capabilities. | Technology |
| SaaS E-commerce | Cloud-based e-commerce solutions offered on a subscription basis, where the platform provider hosts and maintains the software, infrastructure, and security. SaaS (Software as a Service) e-commerce platforms like | Technology |
| Open-Source E-commerce | E-commerce software with publicly available source code that can be freely used, modified, and distributed. Open-source platforms like Magento Open Source, WooCommerce, and PrestaShop offer greater customization flexibility and control over hosting environment compared to SaaS solutions, but require more technical expertise to set up, maintain, and secure. Organizations typically choose open-source when they need extensive customization or have specific hosting requirements. | Technology |
| Headless Commerce | An e-commerce architecture that separates the frontend presentation layer (head) from the backend functionality (body), connected through APIs. In headless commerce, the backend handles e-commerce functionality like catalog management, cart, checkout, and payment processing, while the frontend can be built with any technology. This approach provides greater flexibility for creating unique customer experiences across multiple touchpoints (website, mobile app, kiosk, voice assistant) while maintaining a unified commerce backend. | Technology |
| Progressive Web App (PWA) | Web applications that provide a mobile app-like experience on websites, combining the best aspects of web and mobile applications. For e-commerce, PWAs offer fast loading, offline functionality, push notifications, and home screen installation without requiring users to download an app from an app store. PWAs have become increasingly popular for e-commerce because they improve mobile conversion rates through better performance and engagement features. | Technology |
| Shopping Cart | Software that allows customers to select, reserve, and purchase products on an e-commerce website. Shopping carts track selected items, calculate totals (including taxes and shipping), apply discounts, and facilitate the checkout process. Modern shopping cart functionality often includes features like saved carts, recommended products, inventory validation, and abandoned cart recovery capabilities. | Technology |
| Payment Gateway | A technology service that processes credit card payments for e-commerce websites and traditional brick and mortar stores. Payment gateways securely authorize transactions by encrypting sensitive information like credit card numbers and transmitting this data between payment portals (website, mobile device), merchant, and payment processor. Popular payment gateways include Stripe, PayPal, Authorize.net, Adyen, and Braintree, along with numerous regional providers. | Payments |
| Payment Processor | A company that handles the transaction processing for credit card purchases between merchants, customers, and financial institutions. The payment processor communicates transaction details with the customer’s issuing bank and the merchant’s acquiring bank, ensuring funds are properly transferred. While payment gateways are customer-facing interfaces for submitting payment details, processors handle the background communication with banking networks. | Payments |
| Merchant Account | A type of business bank account that allows businesses to accept and process electronic payment card transactions. Merchant accounts act as an agreement between a retailer, a merchant bank, and a payment processor for the settlement of credit card and debit card transactions. When customers make purchases, funds are first deposited into the merchant account before being transferred to the business’s main bank account, often with a delay of 1-3 business days. | Payments |
| ACH (Automated Clearing House) | An electronic network for financial transactions in the United States, processing large volumes of credit and debit transactions in batches. ACH payments in e-commerce allow customers to pay directly from their bank accounts rather than using credit cards. These transactions typically have lower processing fees than credit cards but may take longer to process. ACH is commonly used for recurring payments, subscription billing, and B2B transactions. | Payments |
| Digital Wallet | A software-based system that securely stores users’ payment information and passwords for multiple payment methods and websites. Digital wallets like Apple Pay, Google Pay, and PayPal streamline the checkout process by eliminating the need to manually enter payment information for each purchase. For e-commerce merchants, supporting digital wallets can reduce checkout friction and cart abandonment while potentially offering better fraud protection through tokenization and biometric authentication. | Payments |
| Buy Now, Pay Later (BNPL) | A type of short-term financing that allows consumers to make purchases and pay for them at a future date, often interest-free. BNPL services like Affirm, Afterpay, Klarna, and PayPal Credit have gained significant popularity in e-commerce because they enable customers to split payments into installments, often without credit checks or interest charges. Merchants typically pay a higher processing fee but benefit from increased conversion rates and average order values. | Payments |
| Order Management System (OMS) | Software that centralizes, tracks, and processes customer orders across all sales channels. An OMS manages the entire order lifecycle from initial placement through fulfillment and returns, ensuring accurate and timely processing. For e-commerce businesses, particularly those with multiple sales channels or complex fulfillment operations, an OMS provides unified inventory visibility, automates fulfillment routing, manages backorders, facilitates returns, and provides order status information to both customers and service representatives. | Operations |
| Drop Shipping | A fulfillment method where the retailer doesn’t keep products in stock, but instead transfers customer orders and shipping details to either the manufacturer, another retailer, or a wholesaler, who then ships the products directly to the customer. This model requires minimal upfront investment since the merchant doesn’t handle inventory or shipping, but typically offers lower profit margins and less control over the customer experience. Drop shipping has enabled many entrepreneurs to start e-commerce businesses with limited capital. | Operations |
| Fulfillment Center | A specialized warehouse designed for processing online orders for e-commerce retailers. Unlike traditional warehouses focused on storing large quantities of products, fulfillment centers are optimized for receiving inventory in bulk, storing it efficiently, then picking, packing, and shipping individual orders directly to consumers. Many e-commerce businesses outsource to third-party logistics (3PL) providers who operate networks of fulfillment centers, providing scalable capacity, strategic geographic distribution, and expertise in e-commerce operations. | Operations |
| Inventory Management | The process of ordering, storing, tracking, and managing inventory levels for products sold online. Effective inventory management ensures products are available when customers order them while minimizing excess stock and associated carrying costs. For e-commerce businesses, particularly those selling across multiple channels, inventory management systems provide real-time stock visibility, automated reordering, forecasting tools, and synchronization across sales platforms to prevent overselling. | Operations |
| Shipping Integration | Software that connects e-commerce platforms with shipping carriers to automate label creation, rate calculations, tracking updates, and shipping documentation. Shipping integrations enable merchants to compare rates across carriers, generate labels in bulk, provide customers with real-time tracking information, and access negotiated carrier rates. These integrations streamline the shipping process, reducing manual effort and errors while providing more accurate delivery estimates to customers. | Operations |
| Last Mile Delivery | The final stage of the delivery process where packages move from a transportation hub to the end customer’s location. Last mile delivery is typically the most expensive and complex part of the shipping process, particularly in e-commerce where packages are delivered to individual residences rather than centralized business locations. Innovations in last mile delivery include parcel lockers, crowdsourced delivery services, autonomous vehicles, and scheduled delivery windows designed to improve efficiency and customer convenience. | Operations |
| User Experience (UX) | The overall experience of a person using an e-commerce website or application, especially in terms of how easy or pleasing it is to use. In e-commerce, UX encompasses all aspects of the customer’s interaction, including navigation, product discovery, content presentation, checkout flow, and post-purchase communications. Effective UX design reduces friction throughout the shopping journey, addresses customer needs and pain points, and creates an intuitive path to purchase that ultimately improves conversion rates and customer satisfaction. | User Interface |
| User Interface (UI) | The visual elements and interactive components that customers use to interact with an e-commerce site or app. UI design focuses on creating aesthetically pleasing and functionally efficient interfaces that effectively communicate the brand while facilitating the shopping experience. For e-commerce, this includes elements like navigation menus, product cards, filter controls, buttons, forms, and visual hierarchy that guide users through the site. Well-designed UI improves usability, creates emotional connections, and reinforces brand identity. | User Interface |
| Product Discovery | The process by which shoppers find products they’re interested in purchasing on an e-commerce site. Product discovery encompasses search functionality, navigation, filtering, recommendation systems, curated collections, and merchandising strategies that help connect customers with relevant products. Effective product discovery is critical in e-commerce because, unlike physical stores where browsing is natural, online shoppers need intuitive pathways to navigate through potentially thousands of products to find what they need. | User Interface |
| Product Detail Page (PDP) | The webpage that displays detailed information about a specific product in an e-commerce store. The PDP typically includes product images, price, description, specifications, available options (like size or color), inventory status, shipping information, customer reviews, and the add-to-cart button. As the primary conversion point in the shopping journey, well-designed PDPs provide all the information customers need to make purchase decisions while minimizing doubts or questions that might prevent conversion. | User Interface |
| Checkout Process | The series of steps a customer takes to complete a purchase after adding items to their cart. The checkout process typically includes stages for reviewing cart contents, entering shipping information, selecting delivery options, providing payment details, and reviewing the order before final submission. Optimizing this critical conversion funnel by minimizing steps, removing distractions, addressing concerns, and providing progress indicators can significantly reduce cart abandonment rates and increase completed purchases. | User Interface |
| Mobile Commerce (M-commerce) | The buying and selling of goods and services through wireless handheld devices such as smartphones and tablets. Mobile commerce has grown to represent more than 50% of e-commerce transactions in many markets as consumers increasingly shop on mobile devices. Successful m-commerce requires responsive or adaptive website design, streamlined navigation optimized for touch interfaces, simplified forms, fast loading times, and mobile payment options that accommodate the unique constraints and opportunities of mobile devices. | User Interface |
| Conversion Rate | The percentage of website visitors who complete a desired action, such as making a purchase. In e-commerce, conversion rate is calculated by dividing the number of conversions (typically completed purchases) by the total number of visitors and multiplying by 100. This key performance indicator measures how effectively a site turns visitors into customers, with industry averages typically ranging from 1-4% depending on the sector. Conversion rate optimization (CRO) focuses on improving this metric through strategic changes to design, content, user experience, and functionality. | Metrics |
| Average Order Value (AOV) | The average amount spent each time a customer places an order on an e-commerce site. AOV is calculated by dividing total revenue by the number of orders over a specific time period. This metric helps businesses understand customer purchasing behavior and measure the effectiveness of merchandising, pricing strategies, and promotional activities. Common tactics to increase AOV include product bundling, volume discounts, cross-selling complementary products, free shipping thresholds, and loyalty programs that incentivize higher spending. | Metrics |
| Cart Abandonment | When online shoppers add items to their virtual shopping cart but exit without completing the purchase. Cart abandonment rates average 70-75% across e-commerce industries, representing significant lost revenue opportunity. Common reasons for abandonment include unexpected costs (shipping, taxes, fees), complicated checkout processes, forced account creation, payment security concerns, and comparison shopping. Merchants combat abandonment through exit-intent offers, cart abandonment emails, simplified checkout flows, guest checkout options, and addressing common concerns proactively. | Metrics |
| SEO (Search Engine Optimization) | The practice of optimizing an e-commerce website to improve its visibility and ranking in organic (non-paid) search engine results. E-commerce SEO encompasses technical factors (site speed, mobile-friendliness, URL structure), on-page elements (product descriptions, metadata, image optimization), and content strategy (blogs, guides, videos). Effective SEO drives qualified traffic to e-commerce sites by ensuring products appear in search results when potential customers are actively looking for what the business sells, providing a sustainable customer acquisition channel. | Marketing |
| PPC (Pay-Per-Click) | An online advertising model where advertisers pay each time a user clicks on one of their ads. For e-commerce, PPC campaigns typically target high-intent keywords related to products, driving traffic directly to relevant product pages or category listings. Google Ads, Microsoft Advertising, and Amazon Sponsored Products are common PPC platforms for e-commerce businesses. PPC allows for precise targeting, measurable results, and scalable traffic generation, making it a core customer acquisition strategy for many online retailers. | Marketing |
| Email Marketing | The use of email to promote an e-commerce store’s products, connect with customers, and encourage purchases. E-commerce email marketing campaigns include promotional messages, abandoned cart sequences, post-purchase follow-ups, product recommendations, back-in-stock notifications, and personalized offers. With average returns of $36-$42 for every $1 spent, email marketing remains one of the most cost-effective channels for e-commerce, driving repeat purchases and customer loyalty when executed with relevance and value for subscribers. | Marketing |
| E-commerce Analytics | The collection, measurement, analysis, and interpretation of data related to online store performance and customer behavior. E-commerce analytics encompasses sales metrics, website performance, customer insights, marketing effectiveness, and operational data. These analytics help businesses understand what’s working, identify opportunities for improvement, and make data-driven decisions about product offerings, marketing investments, pricing strategies, and user experience enhancements. Common analytics tools include Google Analytics, Adobe Analytics, and platform-specific dashboards. | Analytics |
| Customer Lifetime Value (CLTV/LTV) | A prediction of the net profit attributed to the entire future relationship with a customer. In e-commerce, CLTV helps businesses understand how much they can reasonably spend to acquire customers while remaining profitable, and which customer segments provide the highest long-term value. Calculating CLTV typically considers average order value, purchase frequency, profit margins, and customer lifespan. Strategies to increase CLTV include loyalty programs, personalized marketing, subscription offerings, and exceptional customer service that encourages repeat purchases. | Metrics |
| Customer Acquisition Cost (CAC) | The total cost of acquiring a new customer, including all marketing and sales expenses. For e-commerce businesses, CAC is calculated by dividing total acquisition expenses by the number of new customers acquired during a specific period. This metric is crucial for understanding marketing efficiency and ensuring sustainable growth. A healthy business typically maintains a CAC to CLTV ratio of at least 1:3, meaning the lifetime value of a customer should be at least three times the cost of acquiring them. | Metrics |
| A/B Testing | A method of comparing two versions of a webpage or other element to determine which performs better for a given conversion goal. In e-commerce, A/B testing is used to optimize product pages, checkout flows, email campaigns, and other elements by showing different versions to similar segments of visitors and measuring which version drives more conversions. This data-driven approach to optimization helps businesses make informed decisions based on actual customer behavior rather than assumptions or preferences. | Analytics |
| Cohort Analysis | A type of behavioral analytics that groups customers into “cohorts” based on common characteristics or experiences within a defined time-span, then tracks and compares their behaviors over time. For e-commerce, cohort analysis helps identify patterns in customer retention, spending, and engagement based on when they were acquired, which marketing channel they came from, or what products they first purchased. This analysis reveals whether customer quality is improving over time and which acquisition sources yield the most valuable long-term customers. | Analytics |
| Attribution Model | A framework for analyzing which marketing touchpoints receive credit for conversions. E-commerce attribution models include first-click (assigning full credit to the first interaction), last-click (crediting the final touchpoint before purchase), linear (equal credit across all touchpoints), time-decay (more credit to touchpoints closer to conversion), and data-driven (algorithmic distribution based on actual impact). Attribution modeling helps e-commerce businesses understand the customer journey and allocate marketing budgets more effectively across channels that influence purchasing decisions. | Analytics |
| Customer Relationship Management (CRM) | Software and strategies that help e-commerce businesses manage interactions with current and potential customers throughout their lifecycle. E-commerce CRM systems capture and analyze customer data from various touchpoints, enabling personalized communications, targeted marketing, efficient customer service, and relationship-building activities. These systems track purchase history, communication preferences, support interactions, and behavioral data to create comprehensive customer profiles that support more relevant and timely engagement across marketing, sales, and service functions. | Customer Management |
| Customer Segmentation | The practice of dividing an e-commerce customer base into groups with similar characteristics, behaviors, or needs. Common segmentation approaches include demographic (age, gender, location), behavioral (purchase history, browsing patterns, engagement level), psychographic (interests, values, lifestyle), and transactional (recency, frequency, monetary value). Effective segmentation enables more targeted marketing campaigns, personalized product recommendations, and customized user experiences that resonate with specific customer groups rather than using one-size-fits-all approaches. | Customer Management |
| Loyalty Program | A structured marketing approach that rewards customers for their repeat business and engagement with an e-commerce brand. E-commerce loyalty programs typically offer points for purchases that can be redeemed for discounts, exclusive products, or perks; tiered benefits that increase with customer spending levels; or paid membership programs offering enhanced services like Amazon Prime. These programs help increase customer retention, encourage higher spending, gather valuable customer data, and create emotional connections that differentiate from competitors. | Customer Management |
| Customer Support | Services that assist customers before, during, and after online purchases. E-commerce customer support typically includes multiple contact channels such as email, live chat, phone, social media, and self-service knowledge bases. Effective support addresses product questions, resolves technical issues, handles order problems, processes returns, and provides purchase guidance. In e-commerce, where face-to-face interactions are absent, quality customer support plays a crucial role in building trust, reducing purchase anxiety, and encouraging repeat business. | Customer Management |
| Net Promoter Score (NPS) | A metric that measures customer loyalty and likelihood to recommend a company’s products or services. NPS asks customers “How likely are you to recommend [company/product] to a friend or colleague?” on a scale from 0-10. Responses categorize customers as Promoters (9-10), Passives (7-8), or Detractors (0-6), with the final score calculated by subtracting the percentage of Detractors from the percentage of Promoters. E-commerce businesses use NPS to track customer satisfaction over time and identify areas for improvement in products and customer experience. | Customer Management |
| Customer Journey | The complete experience a customer has when interacting with an e-commerce brand, from initial awareness through purchase and beyond to retention and advocacy. The e-commerce customer journey includes touchpoints across multiple channels and typically follows stages like awareness (discovering the brand), consideration (researching products), decision (making a purchase), retention (repeat purchases), and advocacy (recommending to others). Mapping and optimizing this journey helps e-commerce businesses create seamless experiences that guide customers toward conversion and long-term loyalty. | Customer Management |
| 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. Compliance with PCI DSS is mandatory for all e-commerce businesses handling credit card data, regardless of size or transaction volume. The standard includes requirements for network security, cardholder data protection, vulnerability management, access control, monitoring and testing, and information security policies. E-commerce platforms and payment processors often provide tools and features to help merchants maintain compliance. | Security |
| SSL (Secure Sockets Layer) Certificate | A digital certificate that authenticates a website’s identity and enables an encrypted connection between a web server and a browser. For e-commerce websites, SSL certificates (now technically TLS certificates) are essential for protecting sensitive customer information such as payment details, login credentials, and personal data during transmission. SSL certificates create secure connections indicated by HTTPS in the URL and a padlock icon in browsers, providing visual trust signals to shoppers and positively influencing search engine rankings. | Security |
| Fraud Prevention | Systems and strategies used to identify and prevent unauthorized or fraudulent transactions in e-commerce. Fraud prevention tools analyze various data points during checkout to assess risk, including shipping/billing address mismatches, unusual order patterns, IP location, email verification, card verification values (CVV), and device fingerprinting. Advanced solutions use machine learning to adapt to evolving fraud patterns while minimizing false positives that might reject legitimate customers. Effective fraud management balances security with customer experience to prevent losses without creating excessive friction. | Security |
| GDPR (General Data Protection Regulation) | A regulation focused on data protection and privacy for individuals within the European Union and European Economic Area. GDPR applies to any e-commerce business that collects data from EU citizens, regardless of the company’s location. Compliance requirements include transparent data collection policies, obtaining explicit consent, providing access to stored personal data, enabling the “right to be forgotten,” data breach notification protocols, and appointment of data protection officers for larger organizations. Non-compliance can result in significant fines of up to 4% of annual global revenue. | Compliance |
| CCPA (California Consumer Privacy Act) | A state statute intended to enhance privacy rights and consumer protection for residents of California. For e-commerce businesses, CCPA grants California consumers rights to know what personal information is collected, request deletion of their data, opt-out of the sale of their personal information, and access the data in a portable format. The law applies to businesses that meet certain thresholds regarding revenue or data processing volume, and non-compliance can result in civil penalties and private right of action for data breaches. | Compliance |
| ADA Compliance | Adherence to the Americans with Disabilities Act standards that ensure websites and applications are accessible to people with disabilities. For e-commerce sites, this means designing interfaces that can be used by individuals with visual, auditory, motor, or cognitive impairments. Key accessibility considerations include screen reader compatibility, keyboard navigation support, color contrast ratios, alt text for images, captioned videos, and forms that are correctly labeled. Beyond legal requirements, accessible design expands market reach and improves usability for all users. | Compliance |
| Term | Definition | Category |
|---|---|---|
| Omnichannel Retail | A retail strategy that integrates different shopping channels (online, mobile, physical stores, social commerce) into a seamless customer experience. Unlike multichannel retail, which operates channels separately, omnichannel creates consistent, interconnected experiences where customers can move between channels during the same transaction. Omnichannel capabilities include buy online pick up in-store (BOPIS), ship from store, return anywhere, shared inventory visibility, unified customer profiles, and consistent merchandising and pricing across all touchpoints. | Strategy |
| Personalization | The practice of tailoring e-commerce experiences based on individual customer data, behaviors, preferences, and history. E-commerce personalization can include customized product recommendations, individualized search results, targeted promotions, personalized email content, dynamic website content, and customized navigation. Effective personalization creates more relevant shopping experiences that improve conversion rates, increase average order value, and build customer loyalty by making shoppers feel understood and valued. | Strategy |
| Unified Commerce | A retail approach that goes beyond omnichannel by using a single, centralized platform to manage all customer touchpoints and business functions. Unified commerce eliminates silos between systems for e-commerce, in-store POS, order management, customer service, and marketing, creating a cohesive ecosystem that shares data in real-time. This integration enables more accurate inventory management, consistent customer experiences, advanced fulfillment options, and holistic analytics that provide true visibility into cross-channel customer behavior and business performance. | Strategy |
| Social Commerce | The integration of e-commerce functionality directly into social media platforms, enabling users to discover and purchase products without leaving the social environment. Social commerce includes native shopping features on platforms like Instagram Shop, Facebook Marketplace, Pinterest Shopping, and TikTok Shop, as well as shoppable posts, live shopping events, and influencer collaborations. This approach reduces friction between product discovery and purchase by enabling transactions within platforms where consumers already spend significant time engaging with brands and content. | Sales Channel |
| Voice Commerce | Shopping experiences enabled through voice-activated devices and digital assistants like Amazon Echo, Google Home, or smartphone assistants. Voice commerce allows customers to search for products, add items to shopping carts, track orders, and complete purchases using voice commands without requiring screens or keyboards. While still emerging as a transaction channel, voice technology is increasingly important for product search and list creation, particularly for repeat purchases of household staples and grocery items. | Sales Channel |
| Subscription E-commerce | Business models that charge customers a recurring fee to receive products on a regular schedule. E-commerce subscription models include replenishment (regularly replacing consumable products), curation (personalized selections based on preferences), and access (member-exclusive benefits or content). These models create predictable revenue streams, increase customer lifetime value through long-term relationships, generate valuable consumption data, and reduce customer acquisition costs by focusing on retention rather than continuous new customer acquisition. | Business Model |
| Customer Data Platform (CDP) | Software that creates a persistent, unified customer database accessible to other systems for marketing and customer experience purposes. CDPs collect and integrate data from multiple sources (e-commerce platform, email, social media, customer service, in-store interactions), create comprehensive customer profiles, segment customers based on complex criteria, and activate this data across marketing channels. For e-commerce, CDPs enable personalized experiences across touchpoints by providing a complete view of each customer’s interactions, preferences, and purchase history. | Marketing Technology |
| Remarketing/Retargeting | A digital marketing technique that targets ads to users who have previously visited an e-commerce website but left without completing a desired action. Remarketing uses cookies or pixels to track visitors and display relevant ads as they browse other websites, use social media, or search online. For e-commerce, remarketing campaigns commonly target users who abandoned shopping carts, viewed specific product categories, or engaged with certain content, showing them personalized ads encouraging them to return and complete their purchase. | Marketing |
| Marketing Automation | Technology and processes that enable e-commerce businesses to automate marketing activities across multiple channels. E-commerce marketing automation typically includes email sequences triggered by customer behaviors (welcome series, abandoned cart, post-purchase), automated customer segmentation based on purchase history or engagement levels, scheduled social media posts, and personalized content delivery. These systems increase marketing efficiency, ensure timely customer communications, and deliver more relevant messaging based on customer actions and lifecycle stage. | Marketing Technology |
| Influencer Marketing | A form of social media marketing involving endorsements and product placements from individuals with perceived expertise or social influence in their field. E-commerce brands partner with influencers to reach targeted audiences, build credibility through trusted voices, and create authentic content featuring their products. These partnerships range from major celebrities to micro-influencers with smaller but highly engaged followings. Campaigns typically include sponsored content, product reviews, unboxing videos, affiliate links, takeovers, or long-term brand ambassador relationships. | Marketing |
| User-Generated Content (UGC) | Any form of content created by customers rather than brands, including product reviews, ratings, photos, videos, social media posts, and testimonials. E-commerce businesses leverage UGC to build social proof, provide authentic product information from real users, improve SEO with fresh content, and create community around their brand. Strategies for encouraging UGC include post-purchase review requests, branded hashtag campaigns, photo contests, customer spotlights, and incentives for sharing experiences. | Marketing |
| Affiliate Marketing | A performance-based marketing arrangement where e-commerce businesses pay commissions to external websites or individuals (affiliates) for traffic or sales generated from their referrals. Affiliates promote products through dedicated links, content marketing, email newsletters, social media, or comparison sites, earning a percentage of each resulting sale. This model provides cost-effective customer acquisition since payment occurs only after sales, while also extending reach through partners with established audiences in relevant niches. | Marketing |
| AI (Artificial Intelligence) in E-commerce | The application of machine learning, natural language processing, computer vision, and other AI technologies to enhance online shopping experiences and operations. In e-commerce, AI powers product recommendations, visual search capabilities, personalized shopping experiences, dynamic pricing, demand forecasting, fraud detection, and customer service chatbots. These technologies analyze vast amounts of data to identify patterns, make predictions, automate decisions, and create more intuitive interfaces that adapt to individual customer needs and behaviors. | Technology |
| Augmented Reality (AR) Shopping | Technology that overlays digital information or virtual objects onto the real world through smartphones, tablets, or AR glasses to enhance the shopping experience. E-commerce AR applications include virtual try-on for clothing, makeup, and accessories; product visualization in the customer’s own space for furniture and décor; interactive product demonstrations; and enhanced packaging experiences. These experiences help consumers make more confident purchase decisions by addressing key uncertainties about fit, size, appearance, or function that typically hamper online shopping conversion. | Technology |
| Virtual Reality (VR) Shopping | Immersive technology that creates computer-generated environments where users can interact with products and spaces in three dimensions. E-commerce applications of VR include virtual stores where customers can browse products in an immersive digital environment, interactive product demonstrations, virtual showrooms for large items like vehicles or furniture, and shared shopping experiences where friends can shop together virtually. Though still emerging as a mainstream shopping channel, VR offers potential for creating memorable brand experiences that bridge online and physical shopping. | Technology |
| Conversational Commerce | The intersection of messaging apps, voice assistants, and shopping, enabling consumers to interact with businesses through chat or voice interfaces to make purchases. Conversational commerce includes shopping through messaging platforms (Facebook Messenger, WhatsApp), chatbots embedded in e-commerce sites, voice shopping via smart speakers, and SMS-based ordering. These interfaces facilitate more natural interactions, allowing customers to ask questions, get recommendations, and complete purchases through familiar conversation patterns rather than traditional web navigation. | Technology |
| Visual Search | Technology that allows shoppers to use images rather than text to find products online. Visual search enables customers to upload photos, capture images with their smartphone cameras, or click on pictures within an app to find visually similar items or identify objects within images. This capability is particularly valuable in visually-driven categories like fashion, home décor, and furniture, where products can be difficult to describe in words but instantly recognizable visually. Leading implementations include Pinterest Lens, Google Lens, and Amazon StyleSnap. | Technology |
| Digital Twin | A virtual representation of a physical product that simulates its appearance, dimensions, and sometimes functionality. In e-commerce, digital twins provide highly accurate 3D models that customers can explore from all angles, configure with different options, and sometimes virtually test. This technology bridges the online-offline gap by providing detailed product understanding that approaches the in-person examination experience, particularly valuable for complex products like electronics, vehicles, furniture, and customizable goods. | Technology |
| Dynamic Pricing | The practice of flexibly adjusting product prices based on current market demand, competitor pricing, customer behavior, inventory levels, or other factors. E-commerce dynamic pricing systems use algorithms to analyze multiple variables and automatically optimize prices, sometimes in real-time. This approach allows merchants to maximize revenue and margin during high-demand periods, stimulate sales during slower periods, respond quickly to competitive price changes, and implement personalized pricing strategies based on customer segments or purchase history. | Operations |
| Endless Aisle | A retail concept that extends a physical store’s product offerings beyond what’s available on-site by providing access to expanded online inventory. In omnichannel retail, endless aisle solutions typically involve in-store kiosks or associate tablets that allow customers to browse and order products not stocked in that location. These systems prevent lost sales when items are out of stock locally, optimize physical store space by reducing inventory requirements, and offer customers broader selection while still providing the in-person shopping experience. | Operations |
| Inventory Forecasting | The process of predicting future inventory needs based on historical sales data, market trends, seasonality, promotional activities, and other factors. Advanced e-commerce inventory forecasting systems use machine learning to improve prediction accuracy by identifying complex patterns and relationships between variables. Accurate forecasting helps online retailers maintain optimal stock levels to meet customer demand without excessive capital tied up in inventory, reducing both stockouts that cause lost sales and overstock situations that lead to markdowns. | Operations |
| Warehouse Management System (WMS) | Software that helps control and manage day-to-day operations in a warehouse or fulfillment center. E-commerce WMS solutions optimize receiving, putaway, picking, packing, and shipping processes for online order fulfillment. These systems provide tools for inventory tracking and location management, labor planning, barcode/RFID scanning, pick route optimization, real-time visibility, and integration with order management systems. Effective warehouse management increases accuracy, improves throughput, reduces labor costs, and enables faster shipping times for e-commerce orders. | Operations |
| Reverse Logistics | The process of managing product returns from customers back to the retailer or manufacturer. For e-commerce businesses with typically higher return rates than brick-and-mortar stores, efficient reverse logistics involves creating customer-friendly return policies, simplified return processes, return tracking systems, and strategies for processing returned merchandise (restocking, refurbishment, liquidation, or disposal). Well-designed reverse logistics systems minimize costs associated with returns while maintaining positive customer experiences that encourage future purchases despite an initial return. | Operations |
| Distributed Order Management (DOM) | Systems that determine the optimal way to fulfill orders across a complex network of inventory locations. DOM solutions enable e-commerce businesses with multiple fulfillment sources (distribution centers, stores, drop-shipping vendors, 3PLs) to route each order to the most appropriate fulfillment location based on factors like inventory availability, proximity to customer, shipping costs, delivery promises, and business rules. This intelligent order routing optimizes delivery speed, reduces shipping costs, and maximizes inventory utilization across the entire fulfillment network. | Operations |
| Term | Definition | Category |
|---|---|---|
| Cross-Border E-commerce | Online selling of goods to customers in different countries, enabling merchants to expand beyond domestic markets. Cross-border e-commerce requires addressing challenges including international shipping logistics, customs regulations, duties and taxes, payment methods preferred in different regions, language translation, and cultural preferences. Successful global sellers implement localization strategies, partner with international fulfillment services, offer transparent landed costs (total price including all import taxes and fees), and provide region-appropriate payment options and customer support. | Global Commerce |
| Localization | The process of adapting an e-commerce site for specific geographic markets beyond simple language translation. E-commerce localization includes adjusting content, imagery, products, pricing, promotions, shipping options, payment methods, and user experience to match local cultural preferences, shopping behaviors, and business practices. Comprehensive localization strategies recognize regional differences in everything from size conventions and color associations to seasonal shopping patterns and customer service expectations. | Global Commerce |
| International Shipping | The logistics of delivering e-commerce orders to customers in foreign countries. International shipping considerations include carrier selection, service levels (standard, expedited, express), customs documentation and clearance procedures, tracking capabilities, addressing formats, shipping restrictions for certain products, and proper package labeling. E-commerce businesses expanding globally must balance shipping speed and cost while managing customer expectations around delivery timeframes and providing transparency about potential customs delays or additional fees. | Global Commerce |
| Customs & Duties | Government taxes and import fees applied to goods crossing international borders. For cross-border e-commerce, customs and duties impact both merchants and customers through added costs, potential delays, and compliance requirements. E-commerce businesses can manage these challenges through strategies like Delivered Duty Paid (DDP) shipping where import fees are collected at checkout, partnering with cross-border specialists who handle customs clearance, establishing international warehouses to fulfill orders locally, or using customs-friendly shipping programs offered by major carriers. | Global Commerce |
| VAT (Value Added Tax) | A consumption tax placed on products and services throughout the supply chain, common in many countries outside the United States. For e-commerce merchants selling internationally, VAT compliance involves registering for VAT in applicable countries, charging appropriate VAT rates based on customer location and product categories, displaying VAT-inclusive pricing to European consumers, maintaining proper documentation, and filing regular VAT returns. Recent regulations like the EU’s One Stop Shop (OSS) scheme have simplified compliance for cross-border sellers. | Global Commerce |
| Currency Conversion | The process of displaying and accepting payment in different national currencies on an e-commerce site. Currency conversion capabilities allow international shoppers to browse and purchase in their local currency, increasing conversion rates by providing price clarity and eliminating the need for mental calculations. E-commerce platforms typically offer automatic currency conversion based on IP location, manual currency selection options, or dedicated regional storefronts. Considerations include exchange rate sources, update frequency, and how currency fluctuations affect margins. | Global Commerce |
| Marketplace Seller | A business or individual that sells products on third-party e-commerce platforms like Amazon, eBay, Walmart, or Etsy rather than (or in addition to) operating their own e-commerce website. Marketplace sellers leverage these platforms’ established customer base, traffic, and infrastructure while typically paying commission fees on sales. This model eliminates the need to build and market an independent website but requires operating within the marketplace’s rules, competing with other sellers for visibility, and accepting less control over customer relationships and branding experience. | Marketplace |
| Fulfillment by Amazon (FBA) | A service where Amazon stores, picks, packs, ships, and provides customer service for products sold by third-party sellers on their marketplace. FBA sellers ship inventory to Amazon fulfillment centers, where items become eligible for Prime shipping, Amazon’s customer service, and easier returns processing. The service allows smaller merchants to offer Amazon’s trusted fulfillment experience while focusing on product sourcing and development rather than logistics. Costs include storage fees based on space occupied and duration, and fulfillment fees based on product size and weight. | Marketplace |
| Minimum Advertised Price (MAP) | A supplier policy that specifies the lowest price at which retailers or marketplace sellers can advertise or display their products, though actual selling prices may be lower. MAP policies help manufacturers maintain brand value and provide margin protection for retailers selling their products. For marketplace sellers, adhering to MAP policies is essential to maintaining good relationships with brands and distributors, as violations can result in discontinued supply. Marketplace platforms typically won’t enforce MAP on behalf of brands, leaving compliance monitoring to the manufacturers. | Marketplace |
| Buy Box | The prominent “Add to Cart” section on Amazon and other marketplaces that designates a single seller as the default purchase option when multiple sellers offer the same product. Winning the Buy Box significantly increases a seller’s chance of making a sale, as most customers purchase from this default option rather than comparing all available sellers. Buy Box algorithms evaluate factors including price, shipping speed, seller rating, fulfillment method, and inventory status to determine which seller earns this coveted position for each customer viewing the product. | Marketplace |
| Marketplace Arbitrage | A business model where sellers purchase products from retail stores or online sites and resell them at higher prices on marketplaces like Amazon or eBay. Arbitrage sellers identify price discrepancies between different sales channels, often capitalizing on clearance sales, regional price differences, or limited availability of certain products. This approach requires minimal startup capital and product knowledge, but presents challenges including thin margins, difficulty scaling, potential IP violations for restricted brands, and vulnerability to competition as other sellers discover the same opportunities. | Marketplace |
| Private Label | The practice of selling products manufactured by a third party under your own brand name. E-commerce private label sellers develop product specifications based on market research, contract with manufacturers (often overseas) to produce these products, create branded packaging, and sell through their own website or marketplaces. This model offers higher margins than reselling existing brands, control over product features and quality, the ability to build brand equity, and protection from direct price competition, though it requires more upfront investment in product development and inventory. | Marketplace |
| Shoppable Video | Video content that allows viewers to purchase products featured in the video without leaving the viewing experience. Shoppable videos include clickable hotspots or tags that display product information and add-to-cart functionality when selected. This format has gained popularity on social media platforms, livestream shopping events, and e-commerce product pages as it combines the emotional impact and demonstration capabilities of video with immediate purchasing opportunities. The format addresses the gap between product discovery via video content and the traditional conversion path. | Emerging Trend |
| Live Shopping | Real-time video broadcasts where hosts demonstrate products and interact with viewers, who can ask questions and make purchases during the stream. originating in China (where it generates billions in sales), live shopping combines entertainment, social interaction, and commerce in an engaging format that accelerates purchasing decisions through immediacy and authenticity. Platforms offering live shopping capabilities include Instagram, Facebook, Amazon Live, TikTok, and dedicated apps like NTWRK, while standalone solutions enable brands to host livestreams on their own websites. | Emerging Trend |
| Quick Commerce (Q-Commerce) | Ultra-fast delivery of products, typically in under an hour or even in minutes. Quick commerce focuses on convenience and immediacy, using networks of small urban fulfillment centers or dark stores to enable rapid delivery of a limited assortment of essential items. This model has gained traction in grocery, pharmacy, and convenience categories where immediate need often drives purchasing decisions. While traditional e-commerce optimizes for selection and price, q-commerce competes on speed, addressing spontaneous needs that previously drove consumers to physical stores. | Emerging Trend |
| Headless Commerce Architecture | An e-commerce architecture that separates the frontend presentation layer from the backend e-commerce functionality, connecting them through APIs. This approach gives developers freedom to build custom frontends using their preferred tools and frameworks while leveraging the stability and features of established e-commerce backends. Headless architecture enables more flexibility in creating unique user experiences, supports deployment across multiple channels and devices from a single backend, and allows separate optimization and scaling of frontend and backend components. | Technology |
| Composable Commerce | An approach to building e-commerce systems by selecting best-of-breed components (shopping cart, search, checkout, etc.) and combining them rather than using a single, all-encompassing platform. Composable commerce leverages packaged business capabilities (PBCs) – modular business functions accessed through APIs – to create custom commerce solutions tailored to specific business needs. This approach enables organizations to combine specialized solutions for different functions, replace individual components without rebuilding the entire system, and adapt more quickly to changing requirements and technologies. | Technology |
| NFT Commerce | The buying, selling, and trading of non-fungible tokens (NFTs) – unique digital assets verified using blockchain technology. NFT commerce includes marketplaces for digital art, collectibles, virtual real estate, and gaming assets, as well as emerging applications where NFTs represent ownership or access rights to physical products or experiences. For traditional retailers, NFTs offer opportunities for creating digital collectibles that complement physical products, loyalty programs based on token ownership, or exclusive access to products and experiences for community members holding specific tokens. | Emerging Trend |
| Term | Definition | Category |
|---|---|---|
| Gross Merchandise Value (GMV) | The total value of merchandise sold over a given period through an e-commerce platform or marketplace before deducting returns, discounts, and cancellations. GMV represents the full transaction value including shipping and taxes, not just the revenue retained by the platform. While not a direct measure of revenue or profit, GMV indicates the total economic activity flowing through an e-commerce business and is particularly relevant for marketplaces that take a commission on sales rather than selling products directly. | Metrics |
| Average Order Value (AOV) | The average monetary value of every order placed on an e-commerce site over a defined period, calculated by dividing total revenue by number of orders. Increasing AOV is a primary strategy for improving profitability as it spreads fixed costs (acquisition, shipping, transaction fees) across higher revenue. Tactics for improving AOV include product bundling, volume discounts, cross-selling complementary products, minimum thresholds for free shipping or discounts, strategic product recommendations, and tiered pricing options for products. | Metrics |
| Take Rate | The percentage or fee that an e-commerce marketplace or platform charges on transactions facilitated between buyers and third-party sellers. Take rates often include both a percentage of sales and fixed fees for services like payment processing, fulfillment, or advertising. This metric is central to marketplace business models, balancing the need to monetize transaction volume without making the platform prohibitively expensive for sellers. Take rates vary significantly across marketplaces and product categories, typically ranging from 5% to 40%. | Metrics |
| Contribution Margin | The revenue remaining from a sale after deducting all direct costs associated with producing and fulfilling that specific product, including product cost, shipping, packaging, payment processing fees, and sales commission. In e-commerce, contribution margin analysis helps businesses understand profitability at the product level, informing decisions about which products to promote, potential price adjustments, or whether certain items should be discontinued. This metric is particularly important when evaluating marketing ROI and promotional strategies. | Metrics |
| COGS (Cost of Goods Sold) | The direct costs attributable to the production or acquisition of products sold by an e-commerce business. COGS typically includes the wholesale price paid for products, manufacturing costs for self-produced items, inbound shipping to warehouses, and sometimes packaging materials. Understanding COGS is essential for calculating gross margin, pricing products appropriately, evaluating supplier relationships, and assessing overall business profitability. E-commerce businesses should track COGS carefully as it’s typically their largest expense category. | Metrics |
| Bundle Pricing | A pricing strategy where multiple complementary products are sold together as a package, typically at a discount compared to buying each item separately. Bundle pricing in e-commerce helps increase average order value, accelerate inventory turnover for slow-moving items when bundled with popular products, and provide better value perception for customers. Effective bundles combine products that naturally go together, highlight the combined value and savings, and can be offered as optional add-ons during the purchasing process or as pre-configured packages. | Operations |
| Customer Acquisition Cost (CAC) | The total cost of acquiring a new customer, calculated by dividing marketing and sales expenses by the number of new customers gained during a specific period. For e-commerce businesses, CAC includes digital advertising, content creation, SEO services, social media management, affiliate commissions, and other expenses directly related to attracting customers. Understanding CAC is essential for evaluating marketing efficiency, determining sustainable growth rates, and comparing the performance of different acquisition channels. CAC should be assessed relative to customer lifetime value for context. | Metrics |
| Conversion Rate Optimization (CRO) | The systematic process of increasing the percentage of website visitors who take desired actions, such as making a purchase, signing up for an account, or adding items to cart. E-commerce CRO involves analyzing user behavior, identifying friction points in the customer journey, forming hypotheses about improvements, and testing changes through experimentation. Common CRO tactics include streamlining checkout flows, improving site search functionality, enhancing product page content, optimizing mobile experiences, and adding social proof elements like reviews and trust badges. | Marketing |
| Growth Hacking | A marketing approach focused on rapid experimentation across marketing channels, product development, and other areas to identify the most effective ways to grow a business. In e-commerce, growth hacking typically emphasizes data-driven tactics, automation, and scalable strategies that can deliver significant results with minimal resource investment. Examples include referral programs with viral mechanics, creative retargeting techniques, strategic partnerships for customer acquisition, interactive quizzes that generate qualified leads, and leveraging emerging platforms before competition intensifies. | Marketing |
| Viral Coefficient | A metric that measures how many new users each existing customer brings to a business through referrals or sharing. A viral coefficient greater than 1 indicates exponential growth as each customer brings in more than one additional customer. In e-commerce, viral growth strategies include referral programs that reward both the referrer and new customer, shareable post-purchase content, social shopping features that encourage sharing product discoveries, or inherently viral products that prompt conversation and visibility when used. Achieving true virality is rare but even partial viral effects can significantly reduce acquisition costs. | Metrics |
| Retention Rate | The percentage of customers who continue to purchase from an e-commerce business over a specific period after their initial purchase. Customer retention is typically less expensive than new acquisition and indicates product satisfaction and brand loyalty. E-commerce businesses measure retention through repeat purchase rate, purchase frequency, and time between orders. Strategies to improve retention include loyalty programs, post-purchase nurture campaigns, product quality improvements, superior customer service experiences, and creating subscription options for replenishable products. | Metrics |
| Net Revenue Retention (NRR) | A metric that measures the change in recurring revenue from existing customers over a specific period, accounting for expansions, contractions, and churn. While traditionally used in subscription businesses, NRR has become relevant for e-commerce companies with replenishment models or those focusing on customer lifetime value. NRR above 100% indicates that revenue growth from existing customers (through repeat purchases or larger basket sizes) exceeds revenue lost through churned customers, demonstrating sustainable growth potential even without new customer acquisition. | Metrics |
| Product Recommendations | Suggested items displayed to shoppers based on their browsing behavior, purchase history, or similar customers’ actions. E-commerce product recommendations use algorithms to identify patterns and relationships between products and customer preferences, driving additional sales through relevant suggestions. Recommendation types include complementary products (“frequently bought together”), sequential purchases (“customers who bought this also bought”), alternative options (“you might also like”), personalized picks based on browsing history, and recently viewed items. Effective recommendations can significantly increase average order value and conversion rates. | User Interface |
| Faceted Search | An advanced site search functionality that allows users to narrow down product results by selecting multiple filters or facets representing product attributes. For e-commerce sites with large catalogs, faceted search enables users to progressively refine their product selection based on specific criteria such as price range, brand, size, color, ratings, and category-specific attributes. Unlike basic filtering that limits users to a single dimension, faceted search allows combining multiple parameters simultaneously, creating a more intuitive discovery process that mimics how people naturally think about product requirements. | User Interface |
| Product Information Management (PIM) | Systems that centralize, manage, and enrich product information for distribution across sales channels. PIM helps e-commerce businesses create consistent, high-quality product data including basic attributes (SKUs, pricing, dimensions), marketing content (descriptions, features, benefits), digital assets (images, videos, PDFs), channel-specific information, and localized content for different markets. By establishing a single source of truth for product information, PIMs enable faster catalog expansion, consistent cross-channel experiences, simplified channel management, and more effective merchandising through complete and accurate product content. | Operations |
| Rich Snippets | Enhanced search results that display additional information beyond the standard title, URL, and meta description. For e-commerce sites, rich snippets typically include elements like product prices, availability, review ratings (starbursts), and sometimes product images directly within search results. Implementing structured data markup (typically using Schema.org vocabulary) enables search engines to understand page content and potentially display these enhanced results. Rich snippets improve visibility in search results, communicate key purchasing information upfront, and typically achieve higher click-through rates compared to standard results. | SEO |
| Trust Badge | Visual symbols displayed on e-commerce sites to reassure visitors about site legitimacy, security, and business practices. Common trust badges include security certifications (SSL, Norton, McAfee), payment security indicators (Visa, Mastercard, PayPal Verified), third-party verification seals (BBB, Trustpilot, Google Customer Reviews), money-back guarantee emblems, and industry association memberships. These badges address common shopper concerns about online purchasing, particularly around payment security and merchant credibility, helping reduce abandonment among first-time customers unfamiliar with the brand. | User Interface |
| One-Page Checkout | A streamlined checkout process that consolidates all necessary steps (address entry, shipping selection, payment) onto a single page rather than a multi-step sequence. One-page checkout aims to reduce friction by eliminating page loads between steps and providing a complete overview of the transaction. This approach works best when combined with thoughtful form design, clear error handling, address verification, and visual cues about secure payment. For mobile users, one-page checkout may still use accordions or expandable sections to maintain usability while preserving the single-page concept. | User Interface |
| Term | Definition | Category |
|---|---|---|
| E-grocery | Online grocery shopping and delivery services, either from traditional supermarkets extending online or pure-play digital grocers. E-grocery involves unique challenges including perishable inventory management, temperature-controlled fulfillment, complex substitution handling, and narrow delivery windows. The sector has seen accelerated adoption following the COVID-19 pandemic, with various operational models emerging including centralized fulfillment centers, store-based picking, micro-fulfillment centers, and partnerships with third-party delivery services. Key success factors include efficient picking operations, fresh produce quality, and convenient delivery scheduling. | Industry Specific |
| Re-commerce | The selling of previously owned, used, or vintage products through online platforms. Re-commerce has grown significantly in categories like fashion (ThredUp, Poshmark, Depop), electronics (Gazelle, Back Market), luxury goods (The RealReal, Rebag), and furniture (Chairish, Kaiyo). This sector addresses sustainability concerns while offering consumers access to products at lower price points. Specialized re-commerce platforms typically handle authentication for high-value items, standardized condition grading, and streamlined processes for individual sellers to list their used goods. | Industry Specific |
| Digital Products E-commerce | The online sale of entirely digital goods that exist only in electronic form, requiring no physical shipping or inventory. Digital products include software, e-books, online courses, music, videos, graphics, templates, and digital art. This e-commerce model offers advantages including zero inventory costs, instant delivery, no shipping logistics, infinite scalability, and typically higher margins than physical products. Specialized requirements include digital rights management, secure file delivery systems, licensing management, and piracy prevention measures. | Industry Specific |
| B2B E-commerce | Online transactions and relationships between businesses rather than between businesses and consumers. B2B e-commerce typically features specialized requirements including customer-specific pricing, complex approval workflows, volume discounts, credit terms, requisition lists, punch-out catalog integration, and personalized purchasing portals. The sector has historically lagged B2C in digital transformation but has accelerated adoption in recent years, with specialized platforms addressing the complex needs of wholesale, manufacturing, and distribution businesses selling to organizational buyers rather than individual consumers. | Industry Specific |
| Enterprise E-commerce | E-commerce platforms, operations, and strategies specifically designed for large organizations with complex requirements, high transaction volumes, and multiple sales channels. Enterprise e-commerce typically involves advanced features such as multi-site management, complex catalog structures, sophisticated pricing rules, high-volume order processing, global operations, extensive system integrations, and comprehensive security and compliance capabilities. These implementations usually require significant customization, robust infrastructure, dedicated development resources, and specialized expertise in both technical implementation and operational management. | Industry Specific |
| Headless Commerce | An architectural approach that separates the frontend presentation layer from the backend e-commerce functionality, connected through APIs. Headless commerce allows businesses to create custom user interfaces using modern frontend technologies while leveraging robust backend services for core e-commerce functions like inventory, cart, pricing, and order management. This approach enables more design flexibility, optimized experiences across multiple touchpoints (website, mobile apps, kiosks, IoT devices), faster frontend iteration, and the ability to create unique experiences that differentiate from template-based storefronts. | Technology |
| Metaverse Commerce | Commercial activities taking place within immersive virtual worlds and environments. Metaverse commerce encompasses digital product sales (virtual fashion, accessories, real estate), physical product sales through virtual storefronts, hybrid products that connect virtual and physical ownership, and immersive shopping experiences beyond traditional e-commerce interfaces. Though still emerging, major brands are experimenting with virtual stores that offer 3D product interactions, social shopping experiences where friends shop together as avatars, and exclusive virtual products that serve as digital status symbols or functional items within virtual worlds. | Future Trend |
| Blockchain in E-commerce | The application of decentralized ledger technology to address e-commerce challenges and create new capabilities. E-commerce applications of blockchain include supply chain transparency (verifying authenticity and tracing product journeys), tokenized loyalty programs with transferable rewards, ownership verification for digital and luxury goods, smart contracts that automatically execute based on conditions, and alternative payment systems. While still developing, blockchain potentially offers solutions for trust, transparency, and ownership verification that address fundamental e-commerce challenges. | Future Trend |
| Zero-Party Data | Information that customers explicitly and proactively share with businesses, distinguishing it from first-party data (observed behavior) or third-party data (acquired from external sources). In e-commerce, zero-party data is collected through preference centers, style quizzes, wishlist creation, fit profiles, product customization tools, and direct feedback requests. As privacy regulations restrict tracking and third-party cookies phase out, zero-party data becomes increasingly valuable for personalization, offering both higher accuracy and ethical transparency by relying on information customers consciously choose to share. | Marketing |
| Hyperlocal E-commerce | Online commerce models that focus on connecting customers with products and services available in their immediate geographic vicinity, typically delivered within hours or even minutes. Hyperlocal e-commerce includes on-demand delivery of restaurant meals, groceries, convenience items, and retail products from nearby stores. These models leverage networks of local fulfillment points (micro-fulfillment centers or existing retail stores) and rapid delivery capabilities to combine the convenience of e-commerce with the immediacy of local shopping, effectively competing on speed rather than selection or price. | Future Trend |
| Phygital Retail | The integration of physical and digital experiences to create seamless customer journeys that move between online and offline environments. Phygital strategies include technologies like QR codes linking physical products to digital content, mobile apps that enhance in-store shopping, augmented reality overlays on physical spaces, online ordering with in-store pickup, and digital interfaces in physical stores. This convergence recognizes that modern shopping journeys naturally cross between channels, requiring consistent experiences, unified customer recognition, and connected data regardless of where interactions occur. | Future Trend |
| Sustainable E-commerce | Business practices that minimize the environmental impact of online retail operations while promoting social responsibility. Sustainable e-commerce initiatives include carbon-neutral shipping options, plastic-free packaging, recycled or biodegradable materials, consolidation of shipments to reduce transportation emissions, energy-efficient fulfillment centers, circular economy programs (take-back, refurbishment, recycling), and transparent supply chain practices. Beyond environmental benefits, sustainability has become a competitive advantage as consumers increasingly consider values alignment in purchasing decisions. | Future Trend |
| Term | Definition | Category |
|---|---|---|
| Promo Code Strategy | The systematic approach to creating and distributing discount codes to achieve specific business objectives. E-commerce promotional code strategies include various types like percentage/fixed amount discounts, free shipping thresholds, buy-one-get-one offers, and tiered promotions. Strategic applications include new customer acquisition codes, cart abandonment recovery incentives, loyalty rewards, influencer-specific tracking codes, retention offers for at-risk customers, and inventory clearance promotions. Effective promo code management requires clear tracking, fraud prevention measures, and ROI analysis to prevent margin erosion. | Marketing |
| Exit-Intent Technology | Software that detects when a visitor appears to be leaving a website and triggers a targeted message or offer before they depart. On e-commerce sites, exit-intent popups typically offer incentives to encourage immediate purchases (discount codes, free shipping), capture email addresses for future marketing, or direct visitors to specific content addressing common concerns. These last-chance conversion opportunities target visitors who have shown interest but haven’t converted, potentially recovering otherwise lost sales with minimal downside since the visitors were already leaving. | Marketing Technology |
| Referral Marketing | A strategy that encourages existing customers to recommend a business to their friends and networks, typically incentivized with rewards for both parties. E-commerce referral programs often offer discounts, store credit, free products, or exclusive perks when referred friends make purchases. These programs leverage the trust of personal recommendations to acquire high-quality new customers while simultaneously rewarding existing customers for loyalty. Successful referral programs make sharing simple (through email, social media, or messaging), track referrals accurately, and offer meaningful but sustainable rewards. | Marketing |
| Review Management | The process of actively soliciting, moderating, responding to, and leveraging customer product reviews and ratings. For e-commerce, reviews function as critical social proof that builds purchase confidence, with high ratings and review volumes directly correlating with conversion rates. Effective review management includes automated post-purchase review requests, incentives for leaving feedback (while following platform policies), systems for addressing negative reviews, integrating reviews into product pages and marketing, and analyzing review content for product improvement insights. | Marketing |
| Lifecycle Email Marketing | Email campaigns triggered automatically based on customer activity, purchase history, and relationship stage. E-commerce lifecycle emails include welcome series for new customers, browse abandonment reminders, cart recovery messages, post-purchase follow-up sequences, replenishment reminders for consumable products, winback campaigns for lapsed customers, and VIP communications for high-value customers. These behavior-based, personalized communications typically generate significantly higher engagement and conversion rates than generic newsletters or promotions because they deliver relevant content at moments of high purchase intent. | Marketing |
| SMS Marketing | The use of text messages to communicate with customers for promotions, transactional updates, and customer service. E-commerce SMS marketing leverages the immediacy and high open rates of text messages (typically 90%+ within minutes) for time-sensitive communications like flash sales, limited inventory alerts, shipping notifications, and delivery updates. Effective SMS programs obtain clear permission, maintain appropriate frequency to avoid fatigue, provide immediate value in each message, include clear opt-out instructions, and often integrate with other channels like email for coordinated communication strategies. | Marketing |
| Purchase Likelihood Scoring | Predictive analytics that calculate the probability of a prospect converting based on their behavior and characteristics. E-commerce purchase likelihood models analyze signals like page views, product interactions, email engagement, previous purchase history, and demographic data to assign conversion probability scores to each visitor or lead. These scores enable more efficient marketing through targeted interventions like personalized offers for high-potential customers, remarketing prioritization based on conversion probability, and customized website experiences presenting different content or promotions based on purchase readiness. | Analytics |
| Churn Prediction | Predictive analytics that identify customers at risk of abandoning a brand before they actually stop purchasing. E-commerce churn prediction models analyze factors like decreasing purchase frequency, declining engagement with communications, changes in browsing behavior, or returns and complaints to identify at-risk customers. These insights enable proactive retention efforts like targeted re-engagement campaigns, special offers, or personalized outreach to address potential issues before customers permanently switch to competitors. Churn prevention is typically more cost-effective than acquiring new customers to replace lost ones. | Analytics |
| Inventory Intelligence | Advanced analytics applied to inventory data to optimize stocking decisions, predict demand patterns, and maximize product availability while minimizing capital tied up in excess stock. E-commerce inventory intelligence systems analyze historical sales data, seasonal trends, marketing campaigns, competitive pricing, macroeconomic factors, and even weather patterns to forecast demand more accurately. These capabilities help businesses determine optimal stock levels, automate replenishment, identify slow-moving inventory before it becomes problematic, and allocate inventory strategically across fulfillment locations. | Analytics |
| Digital Experience Analytics | Tools that capture and analyze detailed user interactions with an e-commerce site to identify usability issues, optimization opportunities, and customer friction points. These analytics include session recordings that show actual customer interactions, heatmaps displaying where users click and scroll, form analytics that reveal abandonment patterns in checkout and registration flows, path analysis showing navigation patterns, and frustration indicators like rage clicks or rapid scrolling. These insights complement traditional conversion metrics by revealing why customers struggle, enabling more targeted improvements to the shopping experience. | Analytics |
| Multivariate Testing | An advanced form of experimentation that tests multiple variables simultaneously to identify optimal combinations. While A/B testing compares two versions with a single variable changed, multivariate testing examines how different elements interact with each other. In e-commerce, this approach can test combinations of headlines, images, button colors, layouts, and content to determine which specific combination performs best. This comprehensive testing approach is particularly valuable for high-traffic pages like homepages, category pages, and product detail pages where multiple elements influence conversion. | Analytics |
| Algorithmic Pricing | The use of algorithms and machine learning to dynamically set or adjust product prices based on various factors. E-commerce algorithmic pricing considers variables including competitor pricing, demand patterns, inventory levels, price elasticity, customer segments, and even customer-specific factors for personalized pricing. These systems can implement sophisticated strategies like dynamic surge pricing during high demand, time-based discounting for perishable inventory, targeted competitive price matching, or optimizing pricing to maximize margin rather than conversion. This data-driven approach replaces intuition-based pricing with mathematically optimized strategies. | Analytics |
| Microservices Architecture | A software design approach that structures applications as collections of loosely coupled, independently deployable services. In e-commerce, microservices architecture breaks monolithic platforms into specialized components like product catalog, cart, checkout, search, promotions, and customer accounts – each operating as a separate service with its own database. This approach enables greater flexibility, allowing teams to develop, deploy, and scale individual services independently, implement different technologies for specific functions based on requirements, and create more resilient systems where failures in one service don’t bring down the entire platform. | Technology |
| Content Delivery Network (CDN) | A distributed network of servers strategically positioned around the world to deliver web content more efficiently to users based on their geographic location. For e-commerce sites, CDNs cache and serve static content (images, CSS, JavaScript) from edge servers closer to customers, significantly improving page load times. This speed enhancement directly impacts conversion rates, particularly for mobile users or those in regions distant from the origin server. CDNs also provide additional benefits including reduced origin server load, protection against traffic spikes, and some security features like DDoS protection. | Technology |
| Site Search Analytics | The collection and analysis of data from an e-commerce site’s internal search function to understand customer intent and improve the shopping experience. Site search analytics reveal valuable insights including most-searched terms (indicating high-demand products or categories), zero-result searches (identifying inventory gaps or naming mismatches), search refinements (showing when initial results weren’t satisfactory), and search-to-purchase conversion rates. These insights guide merchandising decisions, content improvements, and search function enhancements to connect customers more effectively with products they’re actively seeking. | Analytics |
| Distributed Inventory | A fulfillment strategy that positions inventory across multiple geographic locations to enable faster, more cost-effective delivery. E-commerce distributed inventory models include networks of regional warehouses, micro-fulfillment centers in urban areas, leveraging store inventory for online orders, and partnerships with third-party fulfillment networks. This approach reduces shipping distances to customers, enabling faster delivery times, lower shipping costs, split shipment optimization, improved inventory utilization, and risk mitigation through geographic diversification. Advanced distributed inventory requires sophisticated systems for inventory visibility and intelligent order routing. | Operations |
| Digital Asset Management (DAM) | Systems for storing, organizing, retrieving, and distributing digital files like product images, videos, 3D models, and documents. For e-commerce businesses, DAM solutions provide centralized storage for all visual content, version control for assets, metadata and tagging for searchability, format conversion for different channels, content reuse across platforms, and rights management for licensed content. Effective DAM implementation streamlines content workflows, ensures consistent visual presentation across channels, and maximizes the value of visual content investments by making assets easily discoverable and reusable. | Technology |
| Progressive Web App (PWA) | Web applications built using modern web technologies to deliver app-like experiences within browsers. E-commerce PWAs combine the reach and accessibility of websites with the performance and engagement features of native mobile apps. Key capabilities include offline functionality, push notifications, home screen installation (without app stores), fast loading through caching, and smooth animations and transitions. PWAs help overcome common mobile commerce challenges like slow load times and high abandonment, driving higher engagement metrics while avoiding the friction of app installation and development costs for multiple platforms. | Technology |
Resources for Ongoing Learning
For the most up-to-date information on e-commerce terminology and best practices, consider these authoritative resources:
- Shopify Blog – Practical advice for online retailers, particularly for small to mid-sized businesses
- BigCommerce Resource Library – Guides, webinars, and case studies covering various aspects of e-commerce
- Digital Commerce 360 – News, analysis, and research on e-commerce trends and developments
- Forrester E-commerce Research – Industry analysis and forecasts from a leading market research firm
- Baymard Institute – In-depth UX research specifically for e-commerce websites
- Practical Ecommerce – News, analysis, and how-to articles for e-commerce merchants
- A Better Lemonade Stand – Resources for e-commerce entrepreneurs, particularly for product sourcing and business setup
- Ecommerce Fuel – Community and content geared toward established 7-figure e-commerce businesses
- National Retail Federation – Research and insights from the world’s largest retail trade association
- eMarketer – Data-driven analysis and forecasts of digital marketing and e-commerce trends
This glossary provides a comprehensive foundation for understanding e-commerce terminology, but the field continues to evolve rapidly with new technologies, business models, and best practices emerging constantly. Staying informed through industry publications, communities, and continuing education is essential for e-commerce professionals.