The ecommerce glossary.

CR

Conversion Rate

The share of visitors who complete a desired action, usually a purchase. Orders divided by sessions, shown as a percentage.

AOV

Average Order Value

The average amount spent per order. Total revenue divided by number of orders over a period; a core lever for bundling and upsell.

RPV

Revenue Per Visitor

Average revenue generated per visit. Total revenue divided by sessions, which works out to conversion rate multiplied by AOV.

CTR

Click-Through Rate

The percentage of people who click a link, ad, or element out of those who saw it. Clicks divided by impressions.

Add-to-Cart Rate

The share of sessions or product views that result in an item being added to the cart.

Cart Abandonment Rate

The percentage of shoppers who add items to the cart but leave without completing checkout.

Bounce Rate

The percentage of visitors who land on a page and leave without any further interaction.

UPT

Units Per Transaction

The average number of items in each order; a measure of cross-sell and basket-building.

Session

A single visit to your site by one user, covering all activity until they leave or time out.

Conversion Funnel

The sequence of steps a visitor moves through toward purchase, such as view, add to cart, checkout, and buy. Each step's drop-off shows where to optimize.

CSAT

Customer Satisfaction Score

A survey metric capturing how satisfied customers are with a product or interaction, usually scored on a 1 to 5 scale.

CVR

Another common abbreviation for conversion rate (see CR): the share of sessions that convert, and the most-used primary metric in A/B testing.

CAC

Customer Acquisition Cost

The average cost to acquire one new customer; total acquisition spend divided by new customers gained.

LTV

Customer Lifetime Value

The total profit a customer is expected to generate across their whole relationship with the brand. Also written CLV.

Churn Rate

The percentage of customers or subscribers who stop buying or cancel within a given period.

Retention Rate

The percentage of customers who keep buying over a period; the inverse of churn.

Cohort Analysis

Grouping customers by a shared starting point, such as first-purchase month, to compare behavior over time.

RPR

Repeat Purchase Rate

The share of customers who make more than one purchase.

NPS

Net Promoter Score

A loyalty metric based on how likely customers are to recommend the brand, scored from -100 to 100.

Subscribe & Save

A subscription option giving customers recurring delivery at a discount, improving retention and revenue predictability.

Segmentation

Dividing customers into groups by shared traits or behavior, such as new versus returning or high-value versus churn-risk, to target messaging and offers. Also called customer segments.

Loyalty Program

A program that rewards repeat purchases with points, perks, or tiers to increase retention and lifetime value.

First-Party Data

Customer data a brand collects directly from its own channels such as its site, app, and email; owned and privacy-durable.

Zero-Party Data

Data customers intentionally share, such as preferences from a quiz, as opposed to behavior inferred from their activity.

Customer Account

The logged-in area where a shopper manages orders, addresses, subscriptions, and saved payment methods.

SEO

Search Engine Optimization

Improving a site's content and structure to rank higher in organic (unpaid) search results.

AEO

Answer Engine Optimization

Optimizing content so AI answer engines such as ChatGPT, Perplexity, and Google's AI Overviews cite it; increasingly important alongside SEO.

SEM

Search Engine Marketing

Paid advertising on search engines to appear for relevant queries; often used interchangeably with PPC.

PPC

Pay-Per-Click

An advertising model where you pay each time someone clicks your ad.

CRO

Conversion Rate Optimization

The practice of systematically improving the share of visitors who convert, usually through testing.

ROAS

Return on Ad Spend

Revenue earned for every dollar of advertising spend; ad revenue divided by ad cost.

CPC

Cost Per Click

The average amount paid for each click on a paid ad.

CPM

Cost Per Mille

The cost per one thousand ad impressions.

CPA

Cost Per Acquisition

The average cost to generate one conversion, sale, or lead from a campaign.

Retargeting

Showing ads to people who previously visited your site to bring them back to convert. Also called remarketing.

UGC

User-Generated Content

Content created by customers, such as reviews, photos, and videos, used to build trust and social proof.

Attribution

The method used to credit conversions to the marketing touchpoints that influenced them.

UTM Parameters

Tags added to a URL to track which campaign, source, and medium drove a visit.

Upsell

Encouraging a customer to choose a higher-priced or upgraded version of a product to raise order value.

Cross-sell

Recommending complementary or related products, such as frequently-bought-together items, to raise basket size.

Scarcity

A persuasion principle that highlights limited availability, like low stock or limited drops, to motivate faster action. Best used only when genuinely true.

Urgency

A persuasion principle that uses time pressure, like countdown timers or deadlines, to prompt action. Best used only when genuinely true.

Personalization

Tailoring content, products, or offers to a visitor based on their behavior, source, or segment.

Exit Intent

Detecting when a visitor is about to leave a page, often to trigger a last offer or capture an email before they go.

ESP

Email Service Provider

Software for sending and automating marketing email and flows, such as Klaviyo or Mailchimp.

SERP

Search Engine Results Page

The page a search engine returns for a query, where organic and paid listings compete for the click.

Structured Data

Schema.org markup added to a page that helps search and answer engines understand its content; it powers rich results and AI citations.

Landing Page

A standalone page built for a specific campaign or audience, focused on a single conversion goal.

Value Proposition

A clear statement of the core benefit a product or brand offers and why it beats the alternatives.

Third-Party Cookie

A tracking cookie set by a domain other than the one being visited, historically used for cross-site ads and now being phased out by browsers.

Objection Handling

Proactively answering the doubts that stop a purchase — price, fit, quality, returns — right at the decision point, often with copy, FAQs, or badges.

Gift with Purchase

A free item offered when an order qualifies by value or product, used to lift conversion and average order value. Often abbreviated GWP.

Lead Capture

Collecting a visitor's email or phone, often via a popup or offer, so you can remarket to shoppers who aren't ready to buy yet.

A/B Test

An experiment that splits traffic between two versions, a control and a variant, to measure which performs better on a chosen metric.

MVT

Multivariate Test

A test that varies multiple elements at once to learn which combination performs best; it needs more traffic than an A/B test.

Statistical Significance

The confidence that a test result reflects a real effect rather than random chance, typically set at 95% or higher.

Control / Variant

In a test, the control is the unchanged version and the variant (or challenger) is the modified version measured against it.

Sample Size

The number of visitors or conversions a test needs to produce a reliable result.

GTM

Google Tag Manager

A tool for deploying and managing tracking tags and pixels without editing site code.

Search Console

Google Search Console, a free tool reporting how a site performs in organic search, including queries, indexing, and Core Web Vitals.

GA4

Google Analytics 4

Google's analytics platform, built around events and sessions, used to measure traffic and behavior.

Heatmap

A visualization of where users click, move, or scroll on a page, used to spot friction and opportunities.

Session Replay

A recording of an individual user's session, used to observe real behavior and diagnose issues.

Pixel

A small snippet of tracking code, such as the Meta pixel, that records visitor actions for measurement and ad targeting.

Lift

The percentage improvement a variant produces over the control in an A/B test. A +10% lift means the variant beat the control by 10%. Also called uplift.

Confidence Level

In A/B testing, the probability that a measured result is not due to chance, commonly set at 95%. It pairs with statistical significance to decide whether to trust a test.

Drop-off

The share of users who leave at a given step of a funnel without continuing; the steps with the biggest drop-off are where optimization pays most.

Core Web Vitals

Google's three real-user experience metrics (LCP, INP, and CLS) that influence search ranking, measured at the 75th percentile of visits.

LCP

Largest Contentful Paint

How long the largest visible element takes to load. Good is under 2.5 seconds.

INP

Interaction to Next Paint

How quickly a page responds to user interactions. Good is under 200 milliseconds. It replaced First Input Delay as a Core Web Vital in 2024.

CLS

Cumulative Layout Shift

How much a page's layout unexpectedly shifts as it loads. Good is under 0.1.

TTFB

Time to First Byte

The time from a request to the first byte of the response; an early indicator of server and network speed.

FID

First Input Delay

A legacy responsiveness metric measuring the delay before a page reacts to a first interaction; retired in favor of INP in 2024.

Page Speed

How quickly a page loads and becomes usable; a direct driver of conversion and Core Web Vitals.

PDP

Product Detail Page

The page for a single product, with its imagery, price, options, and add-to-cart; the primary decision point.

PLP

Product Listing Page

A category or collection page that lists multiple products in a grid, usually with sorting and filters.

Cart Drawer

A slide-out panel showing the cart contents without leaving the current page.

Buy Box

The area of a PDP containing price, options, and the add-to-cart button, where the purchase decision happens.

Above the Fold

The portion of a page visible without scrolling; prime real estate for key messaging and calls to action.

Hero

The large, prominent banner area at the top of a page, typically with a headline, image, and primary CTA.

Faceted Filtering

Letting shoppers narrow a product list by attributes like size, color, or price. Also called faceted navigation.

Sticky Add-to-Cart

An add-to-cart button that stays visible as the shopper scrolls a long product page.

Social Proof

Signals that others trust a product, such as reviews, ratings, badges, and customer counts, used to reduce hesitation.

CTA

Call to Action

The element prompting a user to take the next step, like Add to cart or Shop now.

Mega Menu

An expansive dropdown navigation panel that displays many categories and links at once.

Breadcrumbs

A row of links showing a page's place in the site hierarchy, such as Home, Category, Product, to aid navigation.

Wishlist

A saved list of products a shopper wants to revisit or buy later.

Quick View

A modal that previews product details from a listing page without a full page load, speeding up browsing.

Site Search

The on-site search box and engine shoppers use to find products by keyword; autocomplete and typo tolerance make it convert better.

Size Guide

A chart or fit finder that helps shoppers pick the right size, reducing hesitation and returns.

Trust Badge

A visual cue such as a security seal, guarantee, or free-returns icon that reassures shoppers and eases purchase anxiety.

Product Recommendations

Products surfaced to a shopper, such as You may also like, to drive discovery and lift average order value.

Announcement Bar

A thin banner across the top of a site used for promotions, free-shipping thresholds, or news. Also called a promo or notification bar.

Comparison Table

A table that lays out products or plans side by side across key attributes to help shoppers choose.

Virtual Try-On

Augmented-reality technology that lets shoppers preview a product on themselves, common in beauty, eyewear, and jewelry.

Live Chat

An on-site chat widget, staffed or AI-powered (a chatbot), that answers shopper questions in real time to reduce drop-off.

Product Quiz

A short set of guided questions that recommends products based on a shopper's answers; a form of guided selling.

Product Configurator

An interactive tool, often 3D, that lets shoppers customize a product's options or build before buying.

Web Accessibility

Designing a site so people with disabilities can use it, following WCAG standards; it reduces legal risk and often lifts conversion.

Friction

Anything that makes buying harder or slower — extra steps, unclear copy, slow pages, forced account creation. Reducing friction is a core goal of CRO.

Image Gallery

The set of product photos and media on a product page, with thumbnails, zoom, and video, that lets shoppers inspect a product before buying.

SKU

Stock Keeping Unit

A unique code identifying a specific product variant for inventory and sales tracking.

Safety Stock

Extra inventory held as a buffer against demand spikes or supply delays, to avoid stockouts.

Inventory Turnover

How many times inventory is sold and replaced over a period; a measure of stock efficiency.

Sell-Through Rate

The percentage of received inventory sold in a period; units sold divided by units received.

MSRP

Manufacturer's Suggested Retail Price

The price a manufacturer recommends a retailer charge for a product.

MAP

Minimum Advertised Price

The lowest price a retailer is permitted to advertise a product for, set by the brand.

Dropshipping

A model where the retailer sells products that a supplier ships directly to the customer, holding no inventory.

3PL

Third-Party Logistics

An outside provider that handles warehousing, fulfillment, and shipping on a brand's behalf.

Fulfillment

The process of picking, packing, and shipping orders to customers.

BOPIS

Buy Online, Pick Up In Store

An omnichannel option where customers order online and collect in a physical store. Also called click-and-collect.

Omnichannel

A unified shopping experience across web, mobile, store, and marketplace that shares inventory and data.

Stockout

When an item cannot be purchased because its inventory has run out; the problem safety stock is meant to prevent.

RMA

Return Merchandise Authorization

The approval and process for a customer to return an item; a smooth returns flow builds buyer confidence.

Dynamic Pricing

Adjusting prices in real time based on demand, inventory, competition, or customer segment.

Express Checkout

One-tap payment options like Apple Pay, Shop Pay, and PayPal that skip manual form entry to speed up checkout.

BNPL

Buy Now, Pay Later

Financing that lets shoppers split a purchase into installments, such as Affirm, Klarna, or Afterpay.

Chargeback

A forced reversal of a payment initiated by the customer's bank, often from a dispute or fraud.

Payment Gateway

The service that securely authorizes and processes online card payments between the store and the bank.

Guest Checkout

Letting shoppers complete a purchase without creating an account, a proven way to reduce checkout friction.

Digital Wallet

A one-tap payment method that stores card details, such as Apple Pay, Google Pay, or Shop Pay, to speed up checkout.

One-Page Checkout

A checkout that collects all information on a single page instead of multiple steps, reducing drop-off.

Free Shipping Threshold

The order value at which shipping becomes free, such as free shipping over $50, used to lift average order value.

Topline Revenue

Total sales before any costs are subtracted; the top line of the income statement. Also called gross revenue.

GMV

Gross Merchandise Value

The total value of goods sold over a period, before deducting fees, discounts, or returns.

COGS

Cost of Goods Sold

The direct cost of producing or buying the products sold: materials and manufacturing, not overhead.

Gross Margin

Revenue minus COGS, shown as a percentage of revenue; what is left to cover everything else.

Contribution Margin

Revenue from a product minus its variable costs (COGS, shipping, payment fees, variable marketing); what each sale contributes to fixed costs and profit.

EBITDA

Earnings Before Interest, Taxes, Depreciation, and Amortization; a proxy for operating profitability that strips out financing and accounting effects.

Capex

Capital Expenditure

Spending on long-term assets like equipment, buildings, or major software that deliver value over multiple years.

Opex

Operating Expenditure

Ongoing day-to-day running costs such as salaries, rent, software, and marketing, expensed in the period incurred.

P&L

Profit and Loss

A statement summarizing revenue, costs, and expenses over a period to show net profit or loss. Also called an income statement.

Unit Economics

The revenue and costs tied to a single unit, typically one customer or one order, used to judge whether growth is profitable.

MRR / ARR

Monthly and Annual Recurring Revenue; predictable subscription revenue normalized to a month or a year.

Net Revenue

Topline revenue minus returns, discounts, and allowances; the sales actually retained.

Buy vs Build

The decision of whether to purchase an existing solution or develop it in-house, weighing cost, speed, and control.

SWOT Analysis

A strategic planning framework assessing Strengths, Weaknesses, Opportunities, and Threats.

B2B

Business to Business

Selling to other businesses rather than consumers; typically higher order values, negotiated pricing, and account-based buying.

B2C

Business to Consumer

Selling directly to individual shoppers; the standard retail ecommerce model.

D2C

Direct to Consumer

A brand selling straight to shoppers through its own channels, bypassing wholesalers and retailers. Also written DTC.

Wholesale

Selling goods in bulk to retailers or businesses at a discount, who then resell to end customers.

Marketplace

A platform where many third-party sellers list products under one storefront, such as Amazon or Etsy.

Subscription Commerce

Selling products or access on a recurring basis, trading one-time sales for predictable recurring revenue.

Headless Commerce

An architecture that separates the storefront from the commerce engine, connected by APIs, for flexible, omnichannel experiences.

Composable Commerce

Assembling a stack from best-of-breed services such as cart, search, CMS, and PIM, connected via APIs rather than one all-in-one suite.

PIM

Product Information Management

A central system for product data such as attributes, copy, and images that syndicates to storefronts and marketplaces.

ERP

Enterprise Resource Planning

The system of record for finance, inventory, and operations across a business.

OMS

Order Management System

Software that routes and tracks orders across warehouses and stores, enabling split shipments and BOPIS.

CDP

Customer Data Platform

Software that unifies customer data from every source into a single profile for segmentation and personalization.

CMS

Content Management System

The system used to create and manage site content and pages without hand-coding.

API

Application Programming Interface

A defined way for software systems to talk to each other; the connective tissue of headless and composable stacks.

CDN

Content Delivery Network

A network of distributed servers that caches and serves site assets from locations near each user, improving load speed.

Semantic Search

On-site search that understands meaning and intent rather than just matching keywords, often AI-powered, improving results for vague or natural-language queries.