It’s never easy decoding what eCommerce professionals try to put down our throat. Most of us face this problem as words, terms and jargons uttered by them are often not what we have encountered earlier. Thus, we’re left to run for a dictionary to get a hang of the thing.
Since eCommerce is a new and evolving industry, average users are bound to face trouble in comprehending what industry professionals often come up with. They either throw at us short forms (abbreviations) of some pre-existing definitions or invent something new altogether.
Similarly, fancy words fly thick and high to describe functionalities or talk about basic business strategy. Not surprisingly, our heads go for a spin and we literally cry for some help. The best way is, learn some of popular eCommerce Jargons and remain acquainted with the industry.
Here are some of common eCommerce Jargons explained:
GMV
GMV stands for Gross Merchandise Value. It’s the total value of merchandise sold over a period of time through an eCommerce site. This term denotes the growth of the business, or more precisely, it indicates about the use of the site in selling of merchandise owned by others.
NMV
NMV stands for Net Merchandise Value. This value is got after deducting all the expenses and fees from GMV over a period of time. So, your total value of merchandise sold over a specified time (say, quarterly or half-yearly or annually) is less all online expenses, including discounts, gateway payment, marketing costs etc.
Valuation
This term denotes the total value of your eCommerce venture. It includes every aspect your business is made up of, including products, services, the stock etc. to assess its total financial worth in the market.
CLV / LTV
While CLV stands forCustomer Lifetime Value (CLV), LTV denotes Lifetime Value of a Customer (LTV). Both the terms are used interchangeably. Both denote the prediction of future revenue, net profit and value a merchant will derive out of a customer during their entire relationship.
Conversion Rate (CR)
This term is a direct indicator of the health of your ecommerce business. To calculate the CR, you need to divide ‘total actions by total visits’ to a particular page or process.
CRO
CRO stands for Conversion Rate Optimization. It’s about improving your e-commerce website or store to boost its conversion rates. You can optimize anything, from the layout, content, or design.
Cross-selling
It denotes a marketing tactic where sellers offer some additional products to complement the main product they sell. A good example of cross selling can be like offering a selfie stick with the mobile phone.
Upselling
Upselling is a sales technique where sellers offer customers an opportunity to buy either upgrades or the more expensive version of the product. This is done to maximize the value of purchase and it could involve pushing up of better features, better specs etc.
Abandonment
Abandonment in eCommerce is also known as Cart Abandonment. So, what is cart abandonment? Let’s understand this, when a user/customer is visited a product/item and added that in the shopping cart to buy but without buying the product when user/customer leave the cart, it’s called cart abandonment.
A/B Testing
As the name suggest, when we would like to test what’s going to work best, we create two identical website pages with some difference in call to action, color, text or anything else and observe the performance. Based on the page performance comparison, we can easily decide, which page to keep and which on to drop. A/B testing is also know as Split Testing.
ATF / BTF
We usually heard that something needs to be added in website’s ATF or BTF. ATF is actually Above the Fold, which means the front view of the website without scroll and BTF is Below the Fold, which means the bottom view of the website just above the footer section of the website.
LCV
LCV stands for Lifetime Customer Value and also known as Customer Lifetime value (CLV), is a predictive value of net profile from a customer from the lifetime relationship.
B2B
Business to Business (B2B) is a type of business transaction between two business entities but the final product might be used by the end customer.
B2C
Business to Customer (B2C) is a direct transaction between business entity and customer.
AOV
Average Order Value (AOV) = Total Revenue/Total Number of Orders. AOV is an important matrix to understand how much the order value of each transaction.
Category
When a set of products are grouped together under a page, is what we called Category/Sub-Category.
Inventory
The complete stock of products available to a business unit is called Inventory.
Niche
Products those are for a specialized market or industry is known as Niche Products.
Conclusion
In overall, you could see how eCommerce Jargons may look complex at first, but they are actually not. So, get a hold of them and make rapid strides into the domain.
Dharam
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