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Joanna Swartwood, Director of Marketing and Revenue GrowthTue, Oct 22, 2013 9 min read

eCommerce Key Terms: The Vocab You Need to Know

eCommerce Key Terms: The Vocab You Need to Know

Remember grade school, when you used flash cards and color coded notes to learn important terms? The real world is a far cry from those carefree days of fresh pencils and not so fresh school lunches. But the importance of ongoing learning remains, especially as marketers are held accountable for understanding an online ecosystem that seems to undergo major climate change almost every day.

That's why I'm excited to present you with an easy-to-read list of eCommerce key terms. Hopefully, this will shed some light on online shopping concepts you've been a little fuzzy on. Even better, I hope it gives you the mindpower to improve and optimize your eCommerce site!

Abandonment: When a user visits your site but does fulfill the desired action (making a purchase, subscribing to your email list, etc)

Example: Gary visits Amazon and adds several iPhone accessories to his cart. When he realized the tab he's racked up, he gets sticker shock and decides to hold off on making the purchase. When he leaves the site without completing the transaction, this is considered a shopping cart abandonment.

Affiliate Marketing: Partnerships between eCommerce platforms and online publishers, where the publisher endorses/reviews/features a product and is compensated based on eCommerce performance. Some affiliates are paid for a mention, some are paid commensurate with traffic driven back to the eCommerce site, some are paid on actual sales generated.

Example: Nike partners with Blogging Billy to review their new running shoes. Billy is compensated based on how many Nike eCommerce purchases originate on his article.

Average Time on Site: The average amount of seconds a user spends on your site. This calculation is based off all site visitors within a given time frame.

Example: Nikki visits Zappos and spends 45 minutes and 8 seconds browsing shoes. John visits Zappos but only spends 3 minutes and 2 seconds. The average time on site (between these two users) is 24.05.

Bounce Rate: The percentage of people who view one page on your site, then exit without clicking through to a second. Bounce rate can be calculated for all pages on your site (I.e. The bounce rate on your homepage may be higher than the bounce rate on a product page)

Example: Of the 9,000 people who view your Woven Dog Booties page, 2,000 exit without viewing another part of your site. Your bounce rate is 22% (which is great – anything below 50% is highly desirable)

Click Through Rate: Also known as CTR, click through rate measures the total impressions delivered VS people who clicked. CTR can be measured for CTAs, product listings, and any other form of link on your site.

Example: Your homepage receives 15,000 visitors per month, and the homepage CTA for featured boots receives 900 clicks. Your CTR is .06, or 6%

Conversions: A percentage of users who complete an action divided by users who are presented with the opportunity to complete it. Conversion rates should be tracked on all aspects of Inbound marketing – think email open rates, PPC ad clicks to purchases, etc...But the most important conversion rate tracked in eCommerce is impression VS purchase. Conversion rates can be tracked over a specific period of time (I.e. Ad Creative #1 had a 2% conversion rate in November) or on a rolling measurement (I.e. Ad Creative #1 has an overall average conversion rate of .09%)

Example: REI creates an AdWords campaign for their outdoor tents. Ad Group 1 has 7,500 impressions which have generated 1,000 clicks and 500 purchases. The Ad Group has a .067, or 6.7% conversion rate.

Cookies: HTTP, or browser, cookies are small bits of information a website sends and stores on a user's browser. This information is sent back to the server every time the user visits the website again, to alert the server of that user's previous activity. Cookies are used in eCommerce for ad targeting, dynamic website content based on user signals, and saving shopping carts (also known as persisting the shopping cart).

Example: Sean visits to do some Holiday shopping. He spends an hour adding items to his cart for everyone on his list – but then accidentally closes out of the browser. Rather than having to repeat his selection process, Overstock saves his items (usually for at least 7 days) so he can complete the transaction easily the next time he visits.

Discount Code: Also known as a promo code, discount codes are short alphanumerical values which allow a user to access an otherwise hidden discount.

Example: Bath and Body Works sends an email to their subscriber database, offering 15% off all purchases made that day with the promo code "15OFF2DAY". Users enter the code at checkout, and see the discount reflected before finalizing the purchase.

Impression: Any time a particular item, ad, or image is displayed to a user.

Example: This page on has two banner ads, and 6 text ads. Every time the page is loaded, 8 ad impressions are delivered.

mCommerce: As mobile internet usage continues to grow, mobile commerce has naturally followed. According to Internet Retailer, mCommerce sales reached nearly $25 billion in 2012 – an 81% increase YOY. On top of that, mCommerce conversions jumped 30% from the 2011 to 2012 Holiday seasons.

Example: Sarah is looking to purchase a tablet, but doesn't have time to spend walking through a Best Buy store. Instead, she browses listings on, Amazon and eBay from her smartphone – and makes a decision based on other user reviews, price comparisons, and interactive product demos.

Merchant Account: An online bank account which accepts credit card payments, AKA where payments made to an eCommerce store are submitted.

Example: When Nora purchases a denim jacket from Forever21, the credit card payment is sent to Forever21's online merchant account.

Order Tracking: The process in which a customer views the progress of their order leading up to delivery. This is generally orchestrated using a tracking code provided when a purchase is completed.

Example: Patrick orders several nutritional supplements from In his confirmation email, Patrick receives a tracking number which he can enter on the GNC website to stay updated on when his order will arrive.

Pageviews: The total number of times a page on your site is loaded.

Example: Maria is interested in purchasing a trampoline for her backyard. She browses multiple online stores, and views the same page on your site 3 times. This accounts for 3 pageviews, even though they were all generated by the same user.

Third Party Payment Processor: The alternative to Merchant Accounts – some eCommerce platforms can accept payment through providers like PayPal.

Example: When you purchase an item from eBay, that payment is submitted to the seller's PayPal account rather than their personal bank account.

Unique Users: Often shortened to "uniques", unique users are the total number of individuals who visit your site.

Example: gets 3.5M pageviews per month, but only has 1M unique users. This means each user is viewing an average of 3.5 pages.

 Did I miss any that you're still not clear on? Drop me a line in the comments below - perhaps a Key Terms Round 2 is in order? Let me know!