Swanky’s Guide to Ecommerce Acronyms – and What They Mean for Your Business

Acronyms are everywhere in the ecommerce world.

This specialised business language is also constantly evolving, meaning every time you think you’ve got your head around the lingo, a new term pops up to confuse you again.

At Swanky, we try to keep things as jargon-free as possible. However, we also know there’s no skirting around the fact that acronyms pop up all over the internet – and that using these abbreviations yourself can help limit the amount of time you have to spend writing order status updates or shipping notes.

With this in mind, we’ve compiled a list of the ecommerce abbreviations we see cropping up most often to help you get to grips with the must-know terms of the industry.

How many do you know already?

Web design

CTA = Call to action

A call to action (CTA) is a prompt on your website that tells your store’s visitors to take a specified action (such as a Buy Now button on a product page).

CX = Customer experience

In the ecommerce industry, customer experience (CX) is the perception your website’s visitors have of your company after engaging with it online. Improving the CX of your website can greatly increase your store’s conversion rate.

HTML = HyperText Markup Language

HTML is a standardised coding language for creating a webpage. Essentially, HTML tags act as the building blocks for all the content you see on your online store’s pages.  

Alt text / alt tag = An image description in HTML

Alt text is a text description that can be added to an image’s HTML tag on a web page. When you use relevant keywords in this description, you can boost that web page’s position on search engine results pages.

RSS feed = Rich site summary feed

An RSS feed is a type of online feed that allows your customers to receive regular updates from your website or blog.

Web analytics

GA = Google Analytics

Google Analytics (GA) is a leading web analytics service that collects, tracks and reports data from your website (such as your traffic, best performing pages and what your customers are searching for on your store). You can then use these advanced metrics and business insights to improve your website, attracting more potential customers and boosting your conversion rate.

MoM / QoQ / YoY = Month-over-month / Quarter-over-quarter / Year-over-year

These terms refer to the standard formula for measuring business growth. To calculate your ecommerce store’s month-over-month revenue growth for a single month, you need to take the difference between this month’s total revenue and last month’s total revenue, divide it by last month’s total and multiply it by 100 to convert it into a percentage. You can use this same formula to calculate your quarter-over-quarter and year-over-year revenue growth.

ROI = Return on investment

Your return on investment (ROI) is the ratio between your net profit and the cost of your investment into a project (such as a paid advertising campaign or a professional web design). Essentially, a high ROI means your investment has been well worth your time.

AOV = Average order value

Your average order value (AOV) measures the average total of every order placed on your ecommerce store over a defined period of time.

RPU = Revenue per user

Revenue per user (RPU) is a ratio used to express the amount of revenue your store generates on a per-user basis.

CR = Conversion rate

Your conversion rate is the number of visitors to your website that make a purchase compared to your total number of website visitors.

CTR = Click-through rate

A click-through rate (CTR) is the ratio of users who click on a specific link out of the total number of users who have viewed that page. CTRs are commonly measured to determine the success of online advertising and email campaigns.

KPI = Key performance indicator

Key performance indicators (KPIs) measure how effectively your team is achieving specific business objectives. Setting KPIs enables your team to make informed business decisions about the direction of all of your current projects. Some of the most common KPIs business owners track are their cash flow forecast, gross profit margin, funnel drop-off rate and revenue growth rate.

BR = Bounce rate

Your bounce rate (BR) is the percentage of visitors to your store who navigate away from your website after viewing only one page.

A/B testing = Split testing

Split testing is a method of conducting controlled, randomized experiments with the goal of improving a website metric (such as increasing your click-through rate or number of conversions).

Marketing

SEM = Search engine marketing

Search engine marketing is the process of gaining traffic and visibility from search engines through both paid and unpaid efforts (meaning it encompasses both organic SEO and Paid Advertising practices).

SERP = Search engine results page

Search engine results pages (SERPs) are the pages displayed by search engines such as Google in response to a query by a searcher. The higher up on a search engine’s SERPs you are, the more likely your business is to be found by new potential customers.

SEO = Search engine optimisation

Search engine optimisation is the practice of increasing your website’s presence in search results organically through a variety of strategies, techniques and tactics.

CPC / PPC = Cost per click / pay per click

These two terms can be used interchangeably. Both refer to the price you have to pay for each user’s click in your pay-per-click (PPC) marketing campaigns.

CPM = Cost per thousand impressions

A cost per thousand impressions (CPM) is the amount of money you must pay another website to showcase your advertisements per one thousand visitors who see them.

CPA = Cost per action

Cost per action (CPA) advertising is an online advertising pricing model where – rather than paying per click or impression – you pay only for a specified acquisition, such as a sale, click or form submit.

CRM = Customer relationship management

Customer relationship management (CRM) is the management of all of your company’s relationships and interactions with customers and potential customers.

CRO = Conversion rate optimisation

Conversion rate optimisation is the systematic process of increasing the percentage of your website visitors who make purchases on your store. By optimising your conversion rate, you can increase your turnover, acquire more customers and ultimately grow your business.

ROAS = Return on Ad Spend

Return on Ad Spend (ROAS) is a marketing metric that measures the efficacy of a digital advertising campaign, helping your team evaluate which methods are working and how you can improve your future advertising efforts.

CAC = Customer acquisition cost

Customer acquisition cost (CAC) refers to the cost of convincing a customer to buy from your store. Your CAC can be calculated by simply dividing all the costs spent on acquiring more customers (your marketing expenses) by the number of customers you actually acquired in the period the money was spent.

ROS = Return on sales

Return on sales (ROS) is a ratio used to evaluate your company’s operational efficiency. This measure provides insight into how much profit you are earning per dollar (or pound) of sales.

SMM = Social media marketing

Social media marketing (SMM) utilises social networking websites as a marketing tool. The goal of SMM is to produce content that your potential or existing customers will share with their social network in order to increase your brand’s exposure and broaden your customer reach.

LTV and CLV = Lifetime value and customer lifetime value

In ecommerce marketing, customer lifetime value (CLV) is a prediction of the net profit attributed to your company’s entire future relationship with a customer.

USP = Unique selling proposition

Your unique selling proposition (USP) is a feature or characteristic of your products or company that distinguish it from others of a similar nature and make it more appealing to consumers.

QR code = Quick response barcode

A QR code is a machine-readable code consisting of an array of black and white squares, typically used for storing URLs or other information for reading by the camera on a smartphone. QR codes are becoming widely used in many businesses’ marketing campaigns as a way of directing existing or potential customers to a specific landing page or their company website.

Supply chain & logistics

3PL = Third-party logistics

Third-party logistics (3PL) refers to your company’s use of third-party businesses to outsource elements of your distribution, warehousing and fulfillment services.

DDU = Delivered Duty Unpaid

Delivered Duty Unpaid (DDP) is an international trade term indicating that the seller is responsible for making a safe delivery of goods to a named destination, paying all transportation expenses and assuming all risks during transportation.

ERP = Enterprise resource planning

Enterprise resource planning (ERP) is a process used by companies to integrate the main functional areas of their businesses processes into a unified system. An ERP software system can integrate planning, purchasing inventory, sales, marketing and more in order to streamline business processes, eliminate repetitive business tasks and reduce the need to manually enter information.

PCI compliance = the Payment Card Industry Data Security Standard

The Payment Card Industry Data Security Standard was created to increase controls around cardholder data and reduce credit card fraud. If your ecommerce business handles branded credit cards from the major card schemes, then you must be PCI compliant by law.

Common business terms

B2B / B2C = Business to business / Business to client

In the ecommerce industry, business to business (B2B) websites sell products to other businesses alone, while business to client (B2C) stores sell their products directly to consumers.

POS = Point of sale

A point of sale (POS) transaction is the moment when a transaction is finalised between you and your customer.

API = Application programming interface

An application programming interface (API) is a set of tools, functions and procedures which allow software applications to communicate with one another. APIs are often used to allow companies to easily share their information. For example, Amazon.com recently released its API so that web developers could more easily access its product information.

AR = Augmented reality

In the ecommerce industry, augmented reality (AR) refers to technology that superimposes a computer-generated image on a user’s view of the real world, providing them with a more composite view of products as they shop online.

CMS = Content management system

Content management systems (CMS) are typically used for website content management on ecommerce stores, allowing store owners to control and manage their website’s content (including adding and editing text and images online) quickly and easily – without any technical training.

SaaS = Software as a service

Software as a service (SaaS) is a software and licensing delivery model in which software is licensed on a subscription basis and is centrally hosted. Shopify is one popular example of an SaaS ecommerce platform.

It’s time to walk the walk

Now you know how to talk the talk, it’s time to start putting your new ecommerce vocabulary knowledge to use – and to enjoy properly understanding what the experts are on about.

We hope you found the term you were looking for!

Looking for a website revamp or a development consultation that will ensure your store is headed for instant ecommerce success?

Our expert team are passionate about designing unique, beautiful, high-quality websites to help you unlock your full ecommerce potential and reap all of the exciting benefits of owning an exquisite Shopify store.

Please don’t hesitate to get in touch with us if you are interested in finding out more.