Jargons Simplified

D2C & E-Commerce Glossary Terms

Understanding acronyms like SEO, ASO, PPC, CRO, CAC, LTV, and AOV is crucial for growing an e-commerce business. However, they aren’t the magic solution. 

The real essence of growth marketing lies in constantly generating fresh ideas, experimenting with them, and optimizing what works—cost-effectively doing all of this.

A+ Content: Amazon A+ Content is a unique tool inside Seller Central that allows brand owners to create beautifully designed Amazon product descriptions for their Amazon listings. Formally known as Enhanced Brand Content, A+ content is available for brand-registered third-party sellers and all vendors.

ABM (Account-Based Marketing): A strategic approach to business marketing based on account awareness in which an organization considers and communicates with individual prospects or customer accounts as markets of one.

A/B Testing (Split Testing): A method of comparing two versions of a webpage or app against each other to determine which one performs better.

API (Application Programming Interface): A set of rules that allows one software application to interact with another.

Amazon Brand Registry – The Amazon Brand Registry is a program offered by Amazon that provides brand owners with tools and features to help protect their registered trademarks and create an accurate and trusted experience for customers. It is designed to help brand owners enforce their intellectual property rights and maintain control over their product listings on the Amazon marketplace.

ASA – ASA stands for Apple Search Ads, which is an advertising platform provided by Apple Inc. It allows developers and marketers to promote their apps within Apple’s App Store search results. With Apple Search Ads, advertisers can create campaigns to promote their apps to users who are actively searching for apps or keywords related to their products or services. This targeted approach helps advertisers reach users who are likely to be interested in their apps.

ASO (App Store Optimization): Enhancing the visibility and discoverability of a mobile app in app stores to increase downloads.

ASIN (Amazon Standard Identification Number): A 10-character unique identifier assigned by Amazon to products on its platform. Each product listed on Amazon is given a distinct ASIN, which helps in cataloging and searching for products within the vast marketplace.

AOV (Average Order Value): The average total value of each order placed on an e-commerce site.

B2B (Business-to-Business): Businesses that sell products or services to other businesses.

B2C (Business-to-Consumer): Businesses that sell products or services directly to end consumers.

CAC (Customer Acquisition Cost): The cost associated with convincing a customer to make a purchase, including advertising expenses.

CMS (Content Management System): A software application that allows users to create, edit, and manage digital content.

Contribution margin is a key financial metric that represents the difference between a company’s total sales revenue and its total variable costs. It is expressed as a percentage and is used to assess the profitability of individual products or services.

The contribution margin is calculated using the following formula:

Contribution Margin=((Total Sales Revenue−Total Variable Costs)/Total Sales Revenue ×100%

In simple terms, the contribution margin indicates how much of each sales dollar contributes to covering the fixed costs and ultimately to profit. A higher contribution margin suggests a better ability to cover fixed costs and generate profit. It is a valuable tool for businesses to analyze their cost structures and make informed decisions about pricing, production, and product offerings.

CPG stands for Consumer Packaged Goods, which refers to products that are consumed frequently and are sold quickly at a relatively low cost. These products are typically used in households and include items such as food and beverages, personal care products, household cleaners, and over-the-counter medications. CPG products are often sold through traditional retail channels such as supermarkets, convenience stores, and drugstores.

CRO (Conversion Rate Optimization): Improving the percentage of website visitors who take the desired action, such as making a purchase or filling out a form.

CRM (Customer Relationship Management): Strategies, technologies, and practices used to manage and analyze customer interactions and data throughout the customer lifecycle.

CPM (Cost Per Mille): The cost of 1,000 impressions or views of an advertisement.

CR (Conversion Rate): The percentage of website visitors who complete a desired goal, such as making a purchase.

CTR (Click-Through Rate): The ratio of users who click on an ad to the number of total users who view the ad.

CTA (Call to Action): An instruction to the audience to provoke an immediate response, such as “Buy Now” or “Subscribe.”

D2C (Direct-to-Consumer): Selling products directly to consumers without intermediaries, often online.

DNS (Domain Name System): The decentralized naming system that translates easily memorized domain names to the numerical IP addresses needed for locating and identifying devices on a network.

Drip marketing campaigns, refer to a marketing strategy where a series of pre-written messages are sent to customers or prospects over a period of time. The goal of drip marketing is to nurture leads, build relationships, and guide recipients through the sales funnel by delivering relevant and timely content.

Dropshipping: Dropshipping is a retail fulfillment method where a store doesn’t keep the products it sells in stock. Instead, when you sell a product, you purchase the item from a third party (usually a wholesaler or manufacturer) and have it shipped directly to the customer. As a result, the merchant never sees or handles the product.

Here’s how dropshipping typically works: You set up an online store and list products for sale. Customers place orders on your website and pay you the retail price. You purchase the products from a third-party supplier at a wholesale price. The supplier ships the products directly to the customer.

The main advantages of dropshipping include lower upfront costs, as you don’t need to invest in inventory, and the ability to offer a wide range of products without the burden of managing physical stock.

EBITDA margin: EBITDA margin or Earnings Before Interest, Taxes, Depreciation, and Amortization margin, is a financial metric that measures a company’s profitability by expressing its EBITDA as a percentage of its total revenue. EBITDA is an acronym for Earnings Before Interest, Taxes, Depreciation, and Amortization.

The formula for calculating the EBITDA margin is as follows:

EBITDA Margin = (EBITDA/Total Revenue) × 100%

E-commerce (Electronic Commerce): Involves buying and selling goods or services over the Internet.

FDI: Foreign Direct Investment: FDI represents the investment made by a company or individual from one country into business interests located in another country.

First-party data refers to information collected directly from your customers or users through interactions with your website, mobile app, or other owned digital properties. This data includes customer profiles, purchase history, preferences, behavior patterns, and interactions with your brand. First-party data is highly valuable because it provides insights into your audience’s behaviors, interests, and needs, allowing you to personalize experiences, tailor marketing campaigns, and improve customer retention strategies.

FOMO (Fear of Missing Out): A feeling of anxiety that an exciting or interesting event may be happening elsewhere, often aroused by posts seen on social media.

Funnel: In marketing, a “funnel” refers to the customer journey or the process that potential customers go through from initial awareness of a product or service to making a purchase. The funnel is often depicted as an inverted pyramid, representing the narrowing down of prospects at each stage.

GA (Google Analytics): A web analytics service offered by Google that tracks and reports website traffic.

GAP Analysis: Assessing the difference or “gap” between current performance and desired goals or industry benchmarks.

It is a strategic planning tool used to identify areas where a business is falling short of its objectives and to develop a plan to close those gaps. In the context of online sales and marketing, GAP analysis can be applied in various ways: e.g. Performance Metrics, Customer Experience, Competitor Analysis, Technology and Tools & Content and Messaging.

GDPR (General Data Protection Regulation): A regulation in EU law on data protection and privacy for all individuals within the European Union and the European Economic Area.

Gross margin – Gross margin is a financial metric that represents the percentage difference between a company’s revenue and its cost of goods sold (COGS). It is a key indicator of a company’s profitability and is often expressed as a percentage. The gross margin is calculated using the following formula:

Gross Margin = ((Revenue−Cost of Goods Sold)/Revenue) × 100%

GST (Goods and Services Tax): An indirect tax levied on the supply of goods and services in India, unifying various taxes into a single system.

HTTPS (Hypertext Transfer Protocol Secure): The secure version of HTTP, used to encrypt data transmitted between a website and a user’s browser.

Insurgent brand: An “insurgent brand” typically refers to a brand that challenges the established or dominant players within a particular industry or market. Insurgent brands are often characterized by their disruptive approach, innovation, and willingness to challenge the status quo. These brands seek to gain market share by offering something different or uniquely addressing consumer needs.

IoT (Internet of Things): The network of physical devices, vehicles, appliances, and other items embedded with sensors, software, and network connectivity.

KPI (Key Performance Indicator): A measurable value that demonstrates how effectively a company is achieving key business objectives.

KYC (Know Your Customer): A process that businesses use to verify the identity of their customers.

LPO (Landing Page Optimization): The process of improving elements on a website to increase conversions.

LTV (Customer Lifetime Value): The predicted net profit attributed to the entire future relationship with a customer.

Magento: Magento is an open-source e-commerce platform that provides online merchants with a flexible shopping cart system, as well as control over the look, content, and functionality of their online stores. It was originally developed by Varien Inc., but is now owned by Adobe Inc. Magento offers a range of tools for building and managing e-commerce websites, from small to large enterprises.

MMP: MMP stands for Mobile Measurement Partner. A Mobile Measurement Partner is a third-party analytics and attribution platform that helps mobile app developers and advertisers track and analyze the performance of their mobile advertising campaigns.

MSME (Micro, Small, and Medium Enterprises): Businesses classified based on their size and investment.

NPS (Net Promoter Score): A measure of customer loyalty and satisfaction based on the likelihood of customers recommending a company’s products or services.

ONDC (Open Network for Digital Commerce): A government-led initiative in India aimed at creating an open and transparent digital commerce ecosystem.

PDP: Product Detail Page: The Product Detail Page is a dedicated page on an online store’s website that provides comprehensive information about a specific product. It is the page where potential customers can learn more details about a product, view images, read product descriptions, check specifications, and often make a purchase.

The PDP is a crucial element of the online shopping experience as it serves as a point of decision-making for customers. It is where they evaluate the features, pricing, and other relevant information before deciding whether to add the product to their cart and proceed with the purchase. Effective PDP design and content can significantly impact a customer’s decision and contribute to a positive shopping experience.

PIM: Product Information Management: PIM involves managing and optimizing product-related information for better consistency, accuracy, and efficiency across various channels.

PPC (Pay-Per-Click): An online advertising model where advertisers pay a fee each time their ad is clicked.

PV (Page Views): The total number of pages viewed on a website.

Remarketing: Remarketing is a broader term that encompasses various marketing strategies aimed at re-engaging users who have interacted with your brand across different channels, not just your website. This could include email remarketing, where follow-up emails are sent to users who have abandoned their shopping carts, or social media remarketing, where ads are shown to users based on their interactions with your social media profiles.

Retargeting: Retargeting typically refers to the practice of serving ads to users who have previously visited your website or interacted with your brand in some way, but haven’t completed a desired action such as making a purchase or signing up for a newsletter. These ads are displayed to users as they browse other websites or use apps within ad networks.

Retention cohorts: Retention cohorts refer to groups of customers who made their first purchase or engaged with a product or service during the same time period. These cohorts are used in business analytics to analyze and track customer retention over time. The purpose is to understand how well a company is retaining its customers, measure customer loyalty, and identify patterns or trends in customer behavior.

ROI (Return on Investment): A measure of the profitability of an investment.

ROS (Rest of Search): Ad placements that appear in the remaining search results on the page, below the top positions.

ROAS (Return on Ad Spend): A marketing metric that measures the revenue generated for every dollar spent on advertising.

ROS (Rest of Search): ROS placements are ad positions that appear in the remaining search results on the page, below the top positions.

SEM (Search Engine Marketing): A form of internet marketing that involves the promotion of websites by increasing their visibility in search engine results pages through paid advertising.

SEO (Search Engine Optimization): Optimizing your online content to rank higher in search engine results.

SaaS (Software as a Service): A software licensing and delivery model in which software is provided on a subscription basis.

SDK (Software Development Kit): A set of software development tools that allows the creation of applications for a certain software package, hardware platform, computer system, or operating system.

SERP (Search Engine Results Page): The page displayed by search engines in response to a user’s query, showing a list of results.

Shopify POS: Shopify POS (Point of Sale) is a system provided by Shopify, an e-commerce platform, to enable merchants to sell products in physical retail locations. It allows businesses to seamlessly integrate their online and offline sales channels. With Shopify POS, merchants can use the same platform to manage both their online store and their brick-and-mortar store(s). This integration helps in maintaining a centralized inventory, tracking sales, and managing customer data across various channels.

Key features of Shopify POS include Inventory Management: Keep track of stock levels and automatically update them across online and offline sales channels. Order Management: Process orders from different channels in one place, providing a unified view of sales. Payment Processing: Accept various forms of payment, including credit cards and mobile payments. Customer Management: Build a customer database and offer personalized experiences both online and in-store. Analytics and Reporting: Access insights into sales performance, customer behavior, and inventory levels. Multi-Channel Selling: Manage and sell products across various channels, such as online, in-store, and through social media.

Shopify POS is particularly beneficial for businesses that want to have a physical presence while also maintaining an online store, providing a seamless and integrated experience for both customers and merchants.

SMM (Social Media Marketing): The use of social media platforms to connect with the audience to build a brand, increase sales, and drive website traffic.

Third-party data is collected from external sources or data providers. It includes demographic information, interests, and behaviors collected from various sources outside of your direct interactions with customers. Third-party data can complement first-party data by providing additional insights into consumer trends, market segments, and audience behaviors. However, it may be less reliable and less tailored to your specific audience compared to first-party data.

TOS (Top of Search): Ad positions that appear at the top of the search results page when a customer enters a relevant search query.

UGC (User-Generated Content): Content created by users of a system, platform, or service, often shared on social media.

UI (User Interface): The point of interaction between the user and a digital device or product.

Unboxing: Unboxing refers to the process of opening and revealing the contents of a package, typically a newly purchased product, in a systematic and often recorded manner. 

UX (User Experience): The overall experience of a person using a product, especially concerning how easy or pleasing it is to use.

It has become a popular trend on social media platforms, particularly on video-sharing sites like YouTube, where creators film themselves unpacking and showcasing the contents of a newly acquired item. Unboxing videos have become a significant part of online consumer culture, providing consumers with insights into products before purchasing while also offering entertainment value.

UPI (Unified Payments Interface): A real-time payment system in India that enables instant money

UPT (Units Per Transaction: It is a key performance indicator (KPI) that measures the average number of units or items sold in a single transaction. UPT is used by retailers to assess the effectiveness of their sales strategies and to understand the purchasing behavior of customers.

UTM Parameters (Urchin Tracking Module): Tags added to a URL that provides information about the source, medium, campaign name, etc., when the URL is clicked.

WooCommerce: WooCommerce is a plugin for WordPress, one of the most popular content management systems (CMS) for websites. It allows website owners to add e-commerce functionality to their WordPress websites, turning them into fully functional online stores. WooCommerce is also open-source and has gained widespread popularity due to its ease of use and integration with WordPress.

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