Common Ecommerce Terms Explained

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Common Ecommerce Terms Explained

Wednesday, 03 September 2008 22:35

For those newly initiated to the world of ecommerce, understanding commonly used terminology can help to demystify the process of getting started. Ecommerce, or selling on the internet, requires having a place where sales occur, getting customers to that place, and closing the sale.

In ecommerce, the “place” customers shop is the website, sometimes called the storefront. A commerce server is the software that controls the appearance and functionality of the website.

Common marketing practices include advertising the storefront on other websites, using search-driven services such as Google AdWords, creating information-packed email publications called ezines, and opt-in newsletters, which require potential customers to request the information.

When customers click on the link in a newsletter, ezine, or ad, they are taken to a landing page. Each new visitor counts as a page impression, or hit. Tracking these numbers gives the etailer an idea of how effective their marketing efforts are.

Items positioned above the fold are those that appear in the part of the web page that first shows up when the storefront is loaded. In etailing, it is common practice to use this prime position to promote those products or services that the company most wants to customers to see.

When customers visit the storefront, cookies are deposited in their computers. These small files track the customer’s preferences. For example, cookies record what pages have been visited and what products have been placed in the customer’s shopping cart.

The shopping cart is the software that tracks items the customer selects for purchase, calculates the sales total, and collects payment information. This software can be incorporated into the storefront and managed by the etailer, or into a separate program that etailers contract an independent party to maintain and host.

When a customer takes action to purchase, this is called a conversion. High conversion rates are as important as page impressions, so etailers strive to make their websites easy to use and often offer customers incentives for completing the purchase.

Offering multiple payment options is one way to make the process easier for customers. Etailers typically accept payment via PayPal (an online funds transfer service), by credit cards, and through echecks which take funds directly from the customer’s checking account.

Customer relations management (CRM) refers to all practices and procedures the etailer uses to ensure a positive experience for customers. This can include providing live support or a toll-free number, sending confirmation and thank-you emails following a purchase, offering a fair and efficient return and refund policy, and maintaining contact after the purchase to encourage repeat business.

Like any new field, ecommerce has its own language and culture. Understanding the vocabulary removes the confusion and frees etailers to become more effective in their marketing and sales efforts.

<a href="">Published by Charles C. Boustany</a> Published by Charles C. Boustany