E-commerce jargon buster

Whether or not you were a fan of the world of online shopping before lockdown, it is very likely that you have now ordered things online that you would never have dreamed of.

It could be that desk plant to keep you company whilst you work from home, home gym equipment or simply your weekly food shop; nevertheless, e-commerce has once again proved its worth. With large numbers of people turning to online shopping in lieu of less safe options, businesses are looking to capitalise by either pivoting towards a direct-to-consumer offering on their website or seeking to enhance what they already have in place.

So even if you’ve already set up shop, getting to grips with the relevant terminology will stand you in good stead to build and optimise your customers’ digital experience. With that in mind, we’ve taken a look at some frequently used terms to help you tap into your customers’ online journey and identify opportunities for your e-commerce site.

The technology

Application Programming Interface (API)

An API is an intermediary protocol which manages how different applications talk to each other. To illustrate the function of an API, imagine ordering your first post-lockdown pint. You already have a pretty good idea of what you’d like to drink, however, this needs to be communicated to the ‘system’, i.e. the barrel and pump, to fulfil your order. This is where a bartender would come in - or API - to take your order and deliver the 'response'; in this case, your pint.

Customer Data Platform (CDP)

A CDP enables retailers with multiple revenue sources (e.g. ‘brick & mortar’ and e-commerce) to collect customer data and create a 'single customer view' in the form of a unified customer database. This software often also allows analysis of the data and automated targeted marketing over multiple channels. 

E-commerce platform

E-commerce platforms are simply software which combines the customer-facing end of the business, i.e. your online shop, with the back end functionality such as inventory management and customer service. 

These platforms do away with the need to integrate multiple applications and help create personalised and relevant online experiences. A list of popular e-commerce platforms would include Shopify, Magento, and BigCommerce to name a few. 

Mobile-first design

Overtaking the idea of responsive design, which refers to the reformatting of content for mobile, mobile-first design places an importance on the need for your site to be built and optimised for mobile phones, before desktop.

Whilst mobile-friendly websites are likely to rank higher on Google, they also take advantage of the fact that we spend around half our time on the Internet on our phones.

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Optimising your site

Bounce rate

Bounce rate, in web analytics speak, refers to the percentage of single-page visits in which there was no further interaction with the site. For instance, a high bounce rate would infer that a high percentage of visitors aren’t exploring your shop once they arrive. 

That said, a high bounce rate doesn’t necessarily mean that your website isn’t performing well as it largely depends on the purpose of the page in question - your users might find exactly what content they need on one page and then leave. There are, however, a variety of tactics you can use to encourage potential customers to stick around or make a purchase; from effective merchandising to prominent calls-to-action.

Cart abandonment

This describes an instance where a visitor adds an item(s) to their online shopping cart, but exits without completing the purchase. Interviews or user testing might help you uncover why this is happening. A common cause is unexpected delivery costs or long lead times.

Churn Rate

Churn rate refers to the rate at which a business loses customers or subscribers within a specific period of time.

Cost per acquisition

This is the average cost for converting a visitor into a customer. You can work this out by simply dividing your marketing costs by the number of customers acquired over a period of time. 


A site’s conversion rate refers to a quantifiable measurement which accounts for the number of ‘goal completions’. This could mean the number of newsletter sign-ups, but in the case of e-commerce the all-important conversion rate is likely to be the number of completed purchases. 

Analysis of key performance indicators such as bounce rate and conversions will help you to identify the areas of your site which provide the most value as well as areas for improvement. Considering your customers’ path to purchase, i.e. the events which lead to a conversion, and where your online shop fits into their journey is a surefire way to begin optimising your e-commerce site. 

Customer Lifetime Value (CLV)

This means the average amount each customer is likely to spend with your business during your relationship with them. Remember, customers have a great deal more value to offer your business in the future if you’re able to retain them! 

Net Promoter Score (NPS)

NPS is used to measure customer experience, often as an alternative to traditional customer satisfaction research. Calculated from survey results, NPS is a popular metric for customer experience management and can be used to evaluate a business’ performance against industry-specific benchmarks.

Search Engine Optimisation (SEO)

SEO is all about ensuring your site’s pages rank as high as possible in search engine results in order to increase the quality and quantity of website traffic - the higher your website ranks, the more chance someone will visit your online shop. By identifying relevant keywords that your (potential) customers use to search for products, and factoring them into your website design and content, you’ll be on your way to driving more traffic to your site.

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Dealing in speed, convenience, and variety, e-commerce offers a real opportunity for your business to provide an exciting and memorable digital experience.

As research suggests that a large proportion of customers are likely to continue interacting with businesses as they have been during lockdown, there is a real opportunity for brands to capitalise on delivering great digital experiences. This is where your online shop comes in. Dealing in speed, convenience, and variety, e-commerce offers a real opportunity for your business to provide an exciting and memorable digital experience.

If you’d like to find out more about how to optimise your e-commerce site and create impactful digital experiences, get in touch with a member of our team at Yoyo

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