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The E-commerce Glossary

E-commerce terms can mean different things in different tools. Find clear definitions, useful formulas, and common pitfalls, with Playbook guides to put each concept into practice.

57 definitions · Updated

A

A/B test #

A/B testing, split testing

An experiment that randomly assigns visitors to two versions of a page and compares their outcomes.

Details and common pitfalls

Keep in mind : A common mistake is starting a test without enough traffic to reach a useful conclusion.

Add-to-cart rate #

ATC rate

The share of sessions in which at least one product is added to the cart. It helps locate a conversion problem before or after the cart stage.

FormulaAdd-to-cart rate (%) = sessions with add to cart ÷ sessions × 100

Details and common pitfalls

Sources: Shopify

AEO #

Answer engine optimization

Practices that make content understandable and usable by answer engines: explicit answers, reliable information, technical accessibility, and a clear structure.

Details and common pitfalls

Keep in mind : A short, self-contained answer can help readers, but it does not guarantee inclusion in an AI answer or replace SEO fundamentals.

Sources: Google

Agentic commerce #

AI-assisted shopping

Shopping prepared or carried out by an AI agent on someone's behalf: discovery, comparison, cart building, and, in some journeys, payment.

Details and common pitfalls

Keep in mind : Product discovery, referrals to a store, and checkout inside an assistant are different capabilities. Availability depends on the channel, buyer's market, merchant eligibility, and setup. Shopify's ChatGPT channel sends shoppers to the merchant's online store checkout.

Sources: Shopify 1 · Shopify 2

AI Overviews and AI Mode #

Google AI search features

AI-powered answers in Google Search. AI Overviews summarize information within search results; AI Mode offers a more conversational search experience.

Details and common pitfalls

Keep in mind : Availability and supported features vary by market, language, and account. Neither feature guarantees a visit to the websites it cites.

Sources: Google

Attribution #

Attribution model

A rule or model that assigns credit for a purchase or key event to the marketing interactions observed before it. Results depend on the channels measured, attribution window, and model.

Details and common pitfalls

Keep in mind : Do not add up the sales claimed independently by different platforms. Last click, last non-direct click, and data-driven attribution tell different stories. Attribution alone does not prove that marketing caused additional sales.

Sources: Google

Average order value #

AOV

The average amount per order for a specified scope and period.

FormulaAOV = selected sales amount ÷ selected order count

Details and common pitfalls

Keep in mind : State how tax, shipping, and refunds are handled. Shopify calculates AOV as gross sales minus discounts, divided by orders, excluding adjustments made after order creation. This is not interchangeable with every definition of net sales per order.

Sources: Shopify

B

Bounce rate #

GA4 bounce rate

In GA4, the share of sessions that are not engaged: 100% minus engagement rate.

Details and common pitfalls

Keep in mind : Universal Analytics used a definition based on a single interaction request, not simply a single page view. Historical UA bounce rates are not directly comparable with GA4. Also check the configured engagement threshold.

Sources: Google 1 · Google 2

Bundle #

Product bundle

C

Cart abandonment rate #

Shopping cart abandonment

The share of a defined population of carts, sessions, or users with an add-to-cart action that does not reach a purchase within a stated window and journey.

FormulaSession-based cart abandonment (%) = [1 − (sessions with add to cart followed by purchase ÷ sessions with add to cart)] × 100

Details and common pitfalls

Keep in mind : Keep the unit, population, and time window consistent. Do not divide all store orders by sessions with an add-to-cart action. A started checkout without a purchase measures checkout abandonment, which is not exactly the same as cart abandonment.

Sources: Shopify

Checkout #

Checkout flow

The steps between the cart and order confirmation: contact details, shipping, and payment.

Churn rate #

Customer churn, attrition

The share of customers considered lost over a period. Without subscriptions, define the inactivity threshold yourself based on the category's typical buying cycle.

Cohort #

Cohort analysis

A group of customers who placed their first order during the same period. Tracking cohorts month by month shows whether retention is improving.

Details and common pitfalls

Sources: Shopify

Contribution margin #

Contribution profit

Revenue remaining from an order after the specified variable costs, such as product cost, fulfillment, shipping, payment processing, packaging, and returns.

Details and common pitfalls

Keep in mind : State whether acquisition spending is included and list the costs deducted. For break-even ROAS, POAS, or an LTV-to-CAC comparison, use contribution before the acquisition expense being assessed to avoid deducting it twice.

Conversion funnel #

Purchase funnel

The sequence of steps from arriving on a website to ordering: product page, add to cart, checkout, and payment. Analyze each step to find where shoppers drop out.

Details and common pitfalls

Keep in mind : GA4 offers a Purchase journey report and Funnel exploration, which supports up to ten steps.

Conversion rate #

Purchase conversion rate

For session-based purchase conversion, the share of sessions in which at least one purchase is recorded.

FormulaSession purchase conversion rate (%) = sessions with at least one purchase ÷ sessions × 100

Details and common pitfalls

Keep in mind : Shopify uses sessions that completed a purchase, not the number of orders. In GA4, the overall key event rate counts sessions with any key event; use the rate specific to purchase to track buying. Orders divided by sessions measures order frequency and may differ from the share of sessions that purchase.

Sources: Shopify · Google

Cost of a return #

Return cost

The full cost of a return: outbound and return shipping, processing, unsellable stock, nonrefundable payment fees, and customer support.

CRO #

Conversion rate optimization

The practice of helping more existing visitors buy through data analysis, observation of shopping journeys, experiments, and improvements.

CRO audit #

Conversion rate optimization audit

An analysis of a website, its data, and its shopping journey that produces hypotheses ranked by expected impact and implementation effort.

Cross-sell #

Cross-selling

Recommending a product that complements an item already in the customer's cart.

Customer acquisition cost #

CAC

Acquisition spending over a period divided by the number of new customers acquired during that period.

FormulaCAC = acquisition spending ÷ new customers

Customer lifetime value #

LTV, CLV

The value generated per customer over a specified relationship or time horizon. Distinguish observed value over 12 or 24 months from estimated future lifetime value, and state whether the calculation uses revenue, gross profit, or contribution.

FormulaContribution LTV at H ≈ AOV excluding tax × average orders per customer over H × contribution margin before CAC

Details and common pitfalls

Keep in mind : Use the contribution margin as a decimal, such as 0.40 for 40%. A direct cohort measure is cumulative contribution over H divided by the initial cohort size. If comparing LTV with CAC, do not already deduct CAC from contribution. Long-range forecasts may require discounting and explicit retention assumptions.

Sources: Shopify

D

Dark pattern #

Deceptive interface

A design that steers someone toward a decision they would not make with clear information, such as a fake countdown, a preselected option, or a hidden cancellation path.

Data layer #

Measurement data layer

Structured data that a website exposes to measurement tools. With Google Tag Manager, window.dataLayer is usually an array to which the site adds messages and events using dataLayer.push().

Details and common pitfalls

Keep in mind : On Shopify, do not assume that a theme's data layer is available in checkout: customer events and pixels use supported APIs and sandboxes. A data layer is not necessarily one flat object shared across the entire site.

Sources: Google · Shopify

E

Engaged session #

GA4 engaged session

In GA4, a session that lasts longer than the configured engagement threshold—10 seconds by default—contains a key event, or includes at least two page or screen views.

Details and common pitfalls

Keep in mind : Session timeout and the engaged-session threshold are separate settings. Engagement rate is the share of sessions meeting at least one of these criteria.

Sources: Google 1 · Google 2

F

Flicker #

Flash of original content

A brief display of the original page before a variant is applied, particularly in some browser-based A/B tests.

Details and common pitfalls

Keep in mind : It can hurt the experience and contaminate exposure to an experiment. Check its extent, whether it affects variants differently, and how the testing tool loads. Its presence alone does not prove that every result is statistically invalid.

Free shipping threshold #

Free shipping minimum

The cart amount at which shipping becomes free under the stated conditions.

Details and common pitfalls

Keep in mind : An achievable threshold can encourage shoppers to add items, but the effect depends on the products, the amount still needed, and the shipping fee avoided. Make conditions clear and test conversion, AOV, and contribution. An excessive threshold may have no useful effect or discourage a purchase.

G

GEO #

Generative engine optimization

Practices intended to make a brand or its content accessible, understandable, and eligible to be cited in generative AI answers, such as those from ChatGPT, Perplexity, or Gemini.

Details and common pitfalls

Keep in mind : GEO overlaps with parts of SEO and AEO. A mention, a linked citation, and a visit are different outcomes. No page structure or markup guarantees a citation.

Sources: Google

Gross margin #

Gross margin percentage

Gross profit divided by the selling price, expressed as a percentage, using amounts that exclude recoverable tax.

FormulaGross margin (%) = (selling price − product cost) ÷ selling price × 100

Details and common pitfalls

Keep in mind : With a $20 product cost and a $50 selling price before tax, gross profit is $30 and gross margin is 60%. Decimal ratios and percentages are alternative ways to express a rate; do not mix them.

Sources: Shopify

GTIN #

Global Trade Item Number, UPC, EAN

A global identifier for a trade item in the GS1 system. The GTIN is the number; a barcode is a machine-readable representation of it. GTIN-12, often associated with UPC, and GTIN-13, often called EAN, are possible formats.

Details and common pitfalls

Keep in mind : Use the appropriate GS1 identifiers and retain identifiers already assigned by the manufacturer. Do not create a new GTIN simply because the same product is sold on another website or in another country.

Sources: Google

H

Heatmap #

Click map, scroll map

A visual representation of clicks, pointer movements, or scrolling on a page, aggregated across many visits.

K

Key event #

GA4 conversion, former name

In GA4, an event selected to represent an important business action, such as purchase. Analytics replaced its former conversion terminology with key event; Google Ads also has its own conversion concept.

Details and common pitfalls

Keep in mind : The overall rate includes sessions with at least one key event. To measure purchases, use the rate specific to purchase. Adding another key event does not change a correctly scoped purchase rate.

Sources: Google

L

Landing page #

Campaign landing page

The first page someone sees after clicking an ad, email, or link. It should deliver on the promise of the message that prompted the click.

llms.txt #

LLM-oriented site file

A proposed text file at a website's root that points language-model-based systems toward useful content.

Details and common pitfalls

Keep in mind : It does not grant crawling permission or guarantee citations. Adoption varies between tools. It does not replace robots.txt, accessible pages, or SEO fundamentals.

Sources: Google

Loyalty program #

Rewards program

A program that rewards repeat purchases through points, tiers, or exclusive benefits.

M

Markup #

Markup percentage

Gross profit divided by product cost, expressed as a percentage, using amounts that exclude recoverable tax.

FormulaMarkup (%) = (selling price − product cost) ÷ product cost × 100

Details and common pitfalls

Keep in mind : A product costing $20 and selling for $50 before tax has a 150% markup, not 1.5%. Do not confuse markup with gross margin: Shopify calculates gross margin against sales, not cost.

Sources: Shopify

Minimum detectable effect #

MDE

The effect size an experiment is designed to detect at a specified statistical power, given its baseline rate, sample size, and error threshold.

Details and common pitfalls

Keep in mind : State whether the effect is a relative change or a change in percentage points. With the same power and error threshold, detecting a smaller effect generally requires a larger sample. A small observed effect is not automatically undetectable.

Sources: Microsoft Research

P

POAS #

Profit on ad spend

The contribution attributed to advertising-driven sales, calculated before advertising costs, divided by ad spend.

FormulaPOAS = attributed contribution before advertising ÷ ad spend

Details and common pitfalls

Keep in mind : Specify the costs deducted: product, logistics, payments, returns, and so on. Under this convention, a ratio of 1 covers advertising costs but not necessarily fixed overhead. Attribution alone does not establish the additional profit caused by advertising.

Sources: Google

Pricing multiplier #

Cost multiplier

The factor used to multiply product cost to obtain a selling price. State whether both amounts exclude tax or whether the selling price includes tax.

FormulaPricing multiplier = selling price excluding tax ÷ product cost excluding recoverable tax

Details and common pitfalls

Keep in mind : A multiplier of 2.5 means a $20 product cost becomes a $50 selling price before tax. It is not a 250% markup: the markup is 150%. Compare cost and selling price on the same tax basis.

Product feed #

Catalog feed, Merchant Center feed

A structured set of catalog data—titles, prices, availability, images, and identifiers—sent to a channel through a file, synchronized source, or API.

Details and common pitfalls

Keep in mind : Formats, required fields, and update frequency depend on the destination. Keep the feed consistent with the product page and checkout.

Sources: Google

Product page #

PDP, product detail page

A page that presents a product and lets shoppers buy it. Answer engines can also use its content to describe and recommend the product.

R

Reference price #

Compare-at price, crossed-out price

A price shown as a comparison point for the current selling price, such as a genuine former price or a manufacturer's suggested retail price.

Details and common pitfalls

Keep in mind : A former selling price, a suggested retail price, and a competitor's price are different comparisons. Label the basis clearly and check the advertising rules for your target market. A crossed-out number alone does not establish a genuine saving.

Sources: Shopify

Referral program #

Customer referrals

A program that rewards a customer when someone they refer places their first order.

Repeat purchase rate #

Cohort repurchase rate

For a first-purchase cohort, the share of customers who place at least one further order by a defined horizon, such as 12 months after their first purchase.

FormulaRepeat purchase rate at H (%) = cohort customers who bought again by H ÷ initial cohort customers × 100

Details and common pitfalls

Keep in mind : Compare cohorts at the same age. The share of returning customers among people buying in a particular month is a different measure: a long-standing customer may have placed only one order during that month.

Sources: Shopify

Revenue per session #

RPS, revenue per visit, RPV

Revenue for a defined scope divided by the number of sessions in that same scope. It combines order frequency and order value.

FormulaRevenue per session = revenue ÷ sessions

Details and common pitfalls

Keep in mind : The exact identity is RPS = (orders ÷ sessions) × AOV when all definitions match. If conversion rate counts purchasing sessions, also account for orders per purchasing session. RPS measures revenue, not profit.

Sources: Shopify 1 · Shopify 2

RFM segmentation #

Recency, frequency, monetary value

Grouping customers by how recently they last bought, how often they buy, and how much they spend.

ROAS #

Return on ad spend

Revenue attributed to advertising divided by ad spend. In an advertising tool, results also depend on the conversion values supplied and its attribution model.

FormulaROAS = attributed revenue ÷ ad spend

Details and common pitfalls

Keep in mind : With a 40% contribution margin before advertising, expressed as 0.40, break-even ROAS for ad spend is 1 ÷ 0.40 = 2.5, using consistent revenue definitions. This does not automatically cover fixed costs or prove incrementality. A ROAS of 2.5 is 250% when displayed as a percentage.

Sources: Google

S

Server-side tracking #

Server-side measurement

Processing and sending measurement events through a controlled server, often after initial collection in the browser or from an order management system.

Details and common pitfalls

Keep in mind : This setup does not guarantee that every blocker is bypassed or that missing data can be recovered. It does not remove consent obligations or applicable privacy requirements. Check deduplication when the browser and server send the same purchase.

Sources: Google 1 · Google 2

Session #

Visit

A group of a person's interactions with a website or app over a period defined by the tool. In GA4, a session expires after 30 minutes of inactivity by default; the timeout is configurable.

Details and common pitfalls

Keep in mind : Leaving and returning before the timeout can remain one session. One person can generate multiple sessions, but three perceived visits do not necessarily mean three measured sessions. Compare session-based and user-based rates separately; neither rate is universally higher.

Sources: Google 1 · Google 2

Session recording #

Session replay

A reconstruction of a visit from recorded interactions, used to understand where shoppers get stuck.

Details and common pitfalls

Keep in mind : Configure masking and data collection carefully. Recording tools can capture personal information; assess consent and privacy requirements for the markets you serve.

Statistical significance #

Significance threshold

In a frequentist test, a result judged inconsistent with the no-effect hypothesis under a decision rule and error threshold set in advance.

Details and common pitfalls

Keep in mind : At an alpha of 5%, a p-value of 0.05 or less leads to rejection of the null hypothesis under the protocol. It does not mean there is a 95% chance the variant is better or that the effect matters commercially. Follow the planned duration and stopping rule; sequential methods need their own valid rules.

Sources: Microsoft Research

Structured data #

Schema.org, JSON-LD

Machine-readable markup describing a page's content, such as a product, its price, availability, or reviews. Schema.org supplies a vocabulary; JSON-LD is one possible markup format.

Details and common pitfalls

Keep in mind : Markup must match the real, visible content of the page. The JSON-LD script is not a visual element, but the information it describes must not contradict what shoppers see.

Sources: Google 1 · Google 2

T

Trust signals #

Purchase reassurance

Information that resolves doubts at the point of purchase: shipping cost and timing, return terms, payment options, and contact details.

U

UCP and ACP #

Universal Commerce Protocol, Agentic Commerce Protocol

Exchange standards for commerce journeys between agents and businesses. UCP covers capabilities along the commerce journey; ACP describes commerce and checkout exchanges. Their use depends on each platform's implementation.

Details and common pitfalls

Keep in mind : A published standard is not the same as an available sales channel. Check supported capabilities and merchant eligibility. Shopify currently routes ChatGPT shoppers to the merchant's online store checkout.

Sources: Shopify · Google · OpenAI

Upsell #

Upselling

Recommending a higher-end, larger, or better-equipped version of the product a customer has chosen.

UTM parameters #

Campaign tracking parameters

Parameters added to external campaign URLs to pass source, medium, campaign, and other tracking information to an analytics tool.

Details and common pitfalls

Keep in mind : Use them on external campaign links. In GA4, a UTM encountered during a session does not start a new session or rewrite its source, but it can affect event attribution and confuse campaign reporting. Use event tracking for internal links.

Sources: Google 1 · Google 2

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