Glossary of Ecommerce Terms

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It’s sometimes impossible to have a conversation on a subject without some jargon creeping in.

Here is glossary of ecommerce terms you might find handy.

Auto Responder

An automatic email that is sent to a customer or newsletter subscriber when they perform an action. This could either be a link being clicked or a basket being abandoned.

Basket Abandonment

When a visitor leaves your website during the checkout phase they are said to have abandoned their basket. If a user is logged in when this occurs it is possible to track this activity and automatically email them to ask if anything went wrong or if there is anything you can do to help them with their product selection. (See Auto responder)

Bounce Rate

Usually shown as a percentage, bounce rate shows how many people have entered your website and left without visiting any other pages.

Examining this figure will give you an idea as to the quality of your website visitors.

A high bounce rate will generally mean that your landing page is not providing your visitors with relevant content.

CMS (Content Management System)

A system that allows the website owner with little to no technical expertise to make changes to their website. The user will usually log in to an admin section of the website where they will be able to make text and image changes using a basic word processor interface.

Conversions

A conversion is the completion of a pre-defined goal. It could either be a customer completing a transaction on your e-commerce website or simply filling and submitting your online contact form.

It is also possible to combine conversion tracking with ‘funnels’. Goal funnels allow you to track the steps a customer takes before reaching the goal.

Eshot

Simply another name for email newsletters sent out using an email marketing system.

Landing Page

A landing page is single web page that is used to provide content that is highly relevant to the advertisement or link that a visitor clicks on.  For example, if you sell dresses and have a PPC advert promoting a green spotted dress you would ensure that when a visitor clicked on the link they would arrive at the page with the green spotted dress as opposed to the home page. Constructing well thought out landing pages can lower website bounce rate.

Organic results

These appear on search engine results pages and are generated by the search provider’s own algorithm. Organic listings have the benefit of being free (if you discount the cost of ‘getting to the top’) and are also accepted as a more trusted result by the searcher. Organic results generally have a higher click through rate than paid advertising.

Payment Gateway

Payment gateways provide ecommerce retailers the ability to authorise transactions. They protect customer credit card information by encrypting information as it passes from the customer to the retailer and the retailer to the payment processor.

PCI DSS Compliance (Payment Card Industry Data Security Standard)

A set of requirements defined by the major debit and credit cards that ensure retailers meet a minimum standard of information security. Compliance checks can be carried out by an external assessor or by self-assessment depending on the volume of transactions.

PPC (Pay-Per-Click)

Advertisements that only cost you money when someone clicks on them. Most likely to be seen at the top and right hand side of the Google search engine results pages.

SERP (Search Engine Results Page)

These are the results that are displayed when you search for a keyword using a search engine.

SSL Certificate (Secure Socket Layer)

SSL itself is a technology used to encrypt data as is passes through the internet. It is comprised of two keys which are unique to each other. One key encrypts information while the second key decrypts the information when it arrives at its destination. A third party company provides these keys along with a certificate which proves their authenticity. The certificate can be viewed by customers using your ecommerce shop.

URL rewriting

This is a technique used to improve the readability of a web address and also improve search engine rankings. By default, an online shop will generate long URLs which often contain peculiar numbers and symbols which not only look untidy but also give no clue as to where the link will lead. Using URL rewriting we can make a web address go from this:

http://www.ansellandclarke.co.uk/index.php?main_page=index&cPath=1&

to this:

http://www.ansellandclarke.co.uk/ecommerce_experts

Online Outlets – A reflection of the economic climate or just good business strategy?

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For years if you wanted to sell excess or end of line stock online you would reduce the item and place it in a sale category on your website. But, for the past few years there has been an increase in the number of online outlets being setup by companies such net-a-porta, asos, Argos, Tesco and Debenhams. The outlets referred to in this article are not outlets in the truest sense of the word for the retailers are, in most cases, not selling own label products direct from the manufacturer. For the sake of clarity and because I can’t think of a trendy new name for these shops (suggestions welcomed!) right now we shall keep the terminology the same.

The main point which provides me with the most interest is that online retailers are willing to create an entirely new sales channel to promote reduced items. The setup of what is essentially a new business (in the case of THE OUTNET) costs money… a lot of money and when you take into account requirements such as branding, website development, changes in warehouse packing routines and upgrades to backend fulfillment systems, it leaves you wondering how much of a mark-up was on the product in the first place to enable the business to maintain its profitability. I have however heard of some companies that are quite prepared to make a loss on outlet items and allow their full priced shop to subsidise the outlet. This, I imagine, is part of their wider business strategy and can be valid in some situations such as improving brand awareness and cash flow. In other cases it’s just the result of bad planning and a desperate attempt to move stock.

So, why has the formula for presenting sale stock changed so much? Walk into a high street shop with sale banners in the window and 9 times out of 10 you will be required to walk past full priced items first. Online outlets on the other hand allow the consumers to walk around the full priced items before getting to the sale.  In my view this is just indicative of how online selling is adapting to the needs of the increasingly savvy online shopper. The statistic that you have 7 seconds to make an impression on your customer before they leave your website has existed for years but it is still a valid point even more so when consumers looking for a bargain are involved! Personally, I don’t believe that online outlets are a sign of hard economic times. Sure retailers are struggling but the development of online outlets is just a natural evolution of online selling. In an increasing competitive online market place anything a retailer can do to help customers identify a suitable product and provide a quick and direct route to purchase is a positive move. It also serves to inspire loyalty and trust in the retailer.

Is eBay as a viable alternative to a bespoke ecommerce solution?

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What started as a consumer to consumer online auction site has evolved and adapted to become a very realistic and interesting proposition for business looking to sell online but can it take the place of a traditional bespoke ecommerce site?

The statistics are impressive and if the current eBay development plan is anything to go by then they are only set to increase. eBay currently has 17 million unique visitors per month with 62% of all buyers located in the UK, the average age of which is between 24 and 54 and whom 51% are women.

Recent 30-day search data reveals the scale of demand among consumers for branded products on eBay. Next, 4.1m searched; Top Shop, 4.4m; John Lewis, 216,000, M&S 777,000.*

So, with this information could a business consider using eBay as their primary sales channel?

It does of course depend on the type of business, the product being sold and the customer demographic.  Although eBay is a solid ecommerce platform complete with listing analytics, its defining selling point (a place to find reduced proceed goods, below retail price) will no doubt be off-putting to businesses retailing premium brands. It does seem that eBay has reached the same conclusions and for the time being is focusing on outlet style shops to provide a “complimentary channel to brands and retailers.” – Clare Gilmartain (Ebay’s EU Marketplaces vice president)

eBay outlet shops allow retailers to create store fronts within eBay using visuals in line with their existing branding. Customers will however be required to use the eBay checkout process. Garnering interest using the power of the sale tag also opens the door to presenting full price stock alongside discount items.

My advice to anyone exploring the world of ecommerce would be to certainly consider eBay as a valid and worthwhile part of your wider business strategy  but not ignore the traditional bespoke ecommerce solution that will provide you with flexibility in deploying new functionality and that will scale as your business grows.

*Source: Internet Retailing March 2011

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