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ROAS

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ROAS stands for Return On Ad Spend. It's a key metric in online marketing that measures the advertising revenue generated for every dollar spent on a campaign. Think of it like a scorecard that tracks how efficiently your ads are converting into sales. ROAS is calculated by dividing the revenue generated from advertising by the cost of the advertising campaign. For example, if a business spends $100 on advertising and generates $500 in revenue from that campaign, the ROAS would be 5 ($500 / $100), indicating that for every dollar spent on advertising, the business earned $5 in revenue. While a 3:1 to 4:1 ROAS is a good target for e-commerce, it can vary based on your industry, marketing channel, and business goals.

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ROI

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ROI, which stands for Return on Investment, is a metric used to assess the profitability or efficiency of an investment. ROI is calculated by dividing the net profit generated from the investment by the cost of the investment and expressing the result as a percentage or ratio. ROI is a valuable metric that provides a clear picture of the financial performance of an investment. It helps you understand how much you're getting out of your investment compared to what you put in. A positive ROI indicates that you're making money back on your investment, while a negative ROI suggests you're spending more than you're earning.

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RaaS: Retail-as-a-Service

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RaaS stands for Retail-as-a-Service. It's a business model where companies offer retail-related services or solutions to other businesses on a subscription or pay-per-use basis. RaaS providers generally offer a range of services, such as inventory management, point-of-sale systems, customer relationship management (CRM), marketing tools, and analytics. By using RaaS, businesses can access the resources and expertise they need to run their retail operations more efficiently and cost-effectively without having to invest in building their own infrastructure. RaaS is often used by small and medium-sized businesses, startups, and entrepreneurs.

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Recommendation Engine

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A recommendation engine is a filtering system that uses data to suggest products, services, or content that you're likely to be interested in. For example, if you've bought certain items or watched specific movies, the recommendation engine might suggest similar products or movies that it thinks you'll like. Recommendation engines use techniques like collaborative filtering, content-based filtering, and machine learning to make predictions about what you might enjoy. Overall, they personalize your online experience and help you discover new favorites.

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Referral Marketing

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Referral marketing is a strategy where businesses encourage customers to refer their friends, family, or contacts to their products or services. It involves rewarding customers for making successful referrals, such as giving them discounts, coupons, or other incentives. Referral marketing relies on word-of-mouth recommendations and leverages existing customer relationships to acquire new customers. It's like when you tell a friend about a great restaurant you tried and they decide to check it out too. Referral marketing can be a powerful way for businesses to generate leads, increase sales, and build brand loyalty through the endorsement of satisfied customers.

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Retention

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Retention refers to a business's ability to keep its existing customers coming back for more. It's essentially about turning one-time buyers into loyal customers. Retention involves strategies to engage customers, provide excellent service, and meet their needs consistently. Businesses benefit from customer retention because it's generally cheaper to retain existing customers than to acquire new ones. Overall, high retention means loyal customers, more revenue, and positive word-of-mouth.

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Reward Program

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A reward program, also known as a loyalty program, is a marketing strategy designed to encourage customers to keep coming back to a business. It's like a "thank you" for their continued support, offering them incentives for repeated purchases or engagement. A reward program involves offering rewards, incentives, or benefits to customers who engage with the company by making purchases, referring friends, or participating in other specified actions. These rewards can take various forms, such as discounts, loyalty points, cashback, freebies, exclusive offers, or access to special events.

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SEM

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SEM stands for Search Engine Marketing. It's a digital marketing strategy focused on increasing a website's visibility in search engine results pages (SERPs) primarily through paid advertising. SEM involves paying search engines, like Google or Bing, to display ads for your website at the top or bottom of search results pages. These ads are typically displayed based on keywords or phrases relevant to the user's search query, and advertisers pay a fee each time someone clicks on their ad (this is called Pay-Per-Click or PPC advertising).

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SEO

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SEO stands for Search Engine Optimization. It's a set of practices that website owners use to improve their website's visibility in search engine results pages (SERPs). The goal of SEO is to increase organic, or unpaid, traffic to a website by optimizing various elements such as keywords, content quality, meta tags, website structure, and backlinks. The more optimized your website is for SEO, the higher it's likely to rank on search engine results pages, making it easier for people to find you online.

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SKU: Stock Keeping Unit

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A Stock Keeping Unit, or SKU, is a unique alphanumeric code assigned by a retailer or manufacturer to identify and track a specific product. For example, every single shoebox in a shoe store (or style of shoe) would have a special code on it - that's the SKU. This code doesn't just represent the shoe itself, but all its variations. Each variation would still have the same core identity (the running shoe), but the SKU might have an additional letter or number appended to differentiate the size or color (e.g., SKU1234-M for a medium size and SKU1234-L for a large).

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SMM

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SMM stands for Social Media Marketing. It's a digital marketing strategy that involves using social media platforms like Facebook, Instagram, Twitter, etc to connect with your target audience, promote your brand, and achieve your marketing goals. SMM includes various activities such as creating and sharing content, interacting with followers, running advertising campaigns, and analyzing performance metrics. Businesses use SMM to reach their target audience, increase website traffic, generate leads, and drive sales.

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Secure Sockets Layer (SSL)

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Secure Sockets Layer (SSL) is a technology that helps keep information safe and secure when it's being transmitted between a user's web browser and a website's server. This encrypted connection ensured that any data exchanged between the two, like credit card details or login information, couldn't be intercepted by hackers. You can tell if a website is using SSL because it will have a little padlock icon next to the web address, and the address will start with "HTTPS" instead of just "HTTP". SSL is important for protecting online transactions and ensuring that users can browse the web safely and securely.

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Shipping Cost

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Shipping cost is the amount of money it takes to deliver a package from the seller to the buyer’s doorstep. It includes fees for packaging, handling, transportation, and any additional surcharges. Shipping costs can vary depending on factors such as the size, weight, destination, and shipping method chosen for the package. The seller usually shows your estimated shipping costs at checkout, so customers can factor that into their budget before they buy. These estimates often factor in the weight of the order and the delivery zip code.

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Shipping Method

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Shipping method refers to the way in which items are transported from the seller to the buyer. It includes various options such as standard shipping, expedited shipping, and priority shipping. Each method has different delivery times, costs, and features. Standard ground shipping is usually the cheapest but takes the longest. Expedited options get it there faster but cost more, and there's even overnight delivery for the quickest (and priciest) service. Customers can choose the shipping method that best suits their needs and preferences when making a purchase.

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Shopify Pixels

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Shopify pixels are snippets of JavaScript code that you can add to your Shopify store. They track customer behavior and send that data back to Shopify. This pixel collects data about visitors' actions, such as page views, product views, add-to-cart events, and completed purchases. This data helps merchants understand how customers interact with their store, which can be incredibly valuable for marketing and website optimization. Overall, Shopify pixels are a powerful tool for Shopify store owners who want to gain a deeper understanding of their customers and improve their online business.

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Shopping Cart

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A shopping cart is a virtual basket or container on an eCommerce website where customers can collect and store items they intend to purchase. It allows users to add products to their cart while browsing the online store and continue shopping until they are ready to complete their purchase. The shopping cart keeps track of the selected items, quantities, and prices, allowing customers to review and edit their selections before proceeding to checkout. Once customers are satisfied with their choices, they can proceed to the checkout process to provide payment and shipping information to complete the purchase.

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Sitemap

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A sitemap is a file or webpage that lists and provides information about the pages on a website. It is like a blueprint or directory for search engines and users to navigate the website's content more effectively. Sitemaps can include details such as the URLs of individual pages, their hierarchy or structure within the site, and metadata like the last modified date and frequency of updates. There are two main types of sitemaps: XML sitemaps, which are designed for search engines to crawl and index website content, and HTML sitemaps, which are intended for users to easily navigate the site.

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Store Credit

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Store credit is a type of refund a customer receives from a store instead of getting their money back directly. It is like a digital currency that customers can use at a specific store. So, even if they don't get cash back for the return, they still have the chance to pick out something else from that store without spending more money. Store credit typically has an expiration date and can only be redeemed for products or services offered by the issuing retailer. It's a popular way for stores to encourage buyers to shop with them again instead of taking their money elsewhere.

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Subscription Bundle

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A subscription bundle is a package deal offered by a company that combines multiple subscriptions into a single, discounted plan. Like buying in bulk, it lets you get several subscriptions together for a lower overall price than paying for each one separately. Bundles often combine things that go well together, like movies and music streaming, or offer all-in-one packages with essential services. Subscription bundles are convenient because they make it easier and more cost-effective for customers to access the things they want.

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TAM

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TAM stands for Total Addressable Market. It refers to the overall revenue opportunity that exists within a specific market for a particular product or service. TAM represents the maximum potential sales opportunity that a business can achieve if it captures 100% of the market demand. However, businesses focus on a more realistic slice of the market, the Serviceable Addressable Market, which considers who can actually afford and want their product. So, TAM gives a sense of the overall opportunity, while SAM helps businesses set achievable goals.

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Thank You Page

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A Thank You Page is a web page you'll see after taking a desired action on a website, like making a purchase or signing up for a newsletter. It appears immediately after the action is completed, thanking the customer for their engagement and confirming that their transaction was successful. Thank You Pages often provide additional information, such as order details, shipping information, or next steps. They may also include calls to action encouraging customers to explore other products or services, share their experience on social media, or sign up for additional offers.

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Tiered-Cart Discounts

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Tiered-cart discounts are a promotional strategy used in eCommerce to encourage customers to spend more. The discount increases as the customer adds more items to their cart or reaches certain spending thresholds. For example, a business might offer a 10% discount for cart totals between $50 and $100, a 15% discount for totals between $101 and $200, and a 20% discount for totals over $200. Tiered-cart discounts are a great way for stores to boost their average order value, while customers get the chance to save more.

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Trust Badge

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A trust badge is a symbol or icon displayed on a website to indicate that the site is safe, secure, and trustworthy for visitors to use. It's there to assure customers that the site is legitimate and won't steal their personal information, especially when they enter payment details. These badges may include symbols such as padlocks, shields, or checkmarks, along with text indicating security certifications, SSL encryption, or trustworthiness verifications from third-party organizations. By seeing a trust badge, customers are more likely to trust the site and follow through with a purchase.

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Two-factor authentication (2FA)

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Two-factor authentication (2FA) is a security measure used to add an extra layer of protection to online accounts. The typical 2FA setup combines a password with a one-time code from a mobile app or sent via SMS/email. This extra step makes it much harder for hackers to steal your information even if they get your password. This way 2FA improves account security, protecting you against cyber threats like phishing, credential stuffing, and brute force attacks. It's a simple but strong security measure to consider adding to your important online accounts.

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UPC: Universal Product Code

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UPC, or Universal Product Code, is a barcode symbology widely used in stores worldwide. It's a unique identifier for a product that's encoded in those black lines you see on most packaged goods. This code helps stores identify and track each item throughout the supply chain and on shelves. Each UPC code is a 12-digit number assigned to a specific product by a global organization called GS1 (formerly known as the International Article Numbering Association). The number is essentially a serial code that differentiates that particular product from all others. Scanned by a reader, the UPC translates into information that helps stores manage stock, pricing, and checkout efficiency. In a nutshell, it's a standardized system that ensures smooth product flow all around the world.

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Upsell

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Upsell is a sales strategy that nudges customers towards buying a more expensive, upgraded, or premium version of a product they're considering. The aim is to convince customers to spend more on a product that offers more value. It should offer real value to the customer, like extra features or benefits that justify the extra cost. Upselling can involve suggesting a premium product line, a product with more features, or adding on extras like warranties or extended service plans.

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Visual Search

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Visual search is a technology that uses artificial intelligence (AI) to allow you to find information using an image instead of typing keywords. For example, let’s say you see a pair of cool sunglasses while scrolling through social media, but you have no idea what brand they are. With visual search, you could take a screenshot of those sunglasses and upload it to a visual search engine. The engine would then use its image recognition abilities to scan the web for similar products and provide you with information on where to buy them.

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Voice Search

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Voice search is a technology that allows users to search the internet or interact with digital devices using spoken commands or queries instead of typing. For example, you’re browsing an online store, but instead of typing, you can simply ask questions out loud like "What are the top-rated headphones?” or “Show me black shirts in a larger size”. Voice search makes shopping more convenient and hands-free, especially for users on the go or those who prefer a more natural way to interact.

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Volume Discounts

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Volume discounts are a pricing strategy that incentivizes customers to buy more by offering them a bigger discount for larger purchases. With volume discounts, the more a customer adds to their cart, the higher the percentage discount they get. For example, you might offer a 5% discount for buying 5 notebooks, a 10% discount for buying 10 notebooks, and a 15% discount for buying 20 notebooks or more. This entices them to stock up and ultimately spend more money at the store. Buyers can save money by purchasing in bulk, while sellers can increase their sales volume and revenue.

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Wishlist

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A wishlist is a virtual shopping list where customers can save products they're interested in for later. This lets them browse and save things they're interested in for later, coming back to their wishlist whenever they revisit the store. Wishlists are also great for sharing gift ideas with friends and family, letting them see exactly what you have your eye on. Some stores even allow you to track price changes on your wishlist items, so you can snag a bargain if something goes on sale.

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Zero Moment of Truth (ZMOT)

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The Zero Moment of Truth (ZMOT) is a concept developed by Google to describe a crucial stage in a customer's journey before they make a purchase decision. It refers to the online research phase where customers actively seek out information about products or services they're considering. Think of it as the moment you switch from needing something to looking it up online. Traditionally, there were two key decision points: seeing a product in a store (First Moment of Truth) and then using it (Second Moment of Truth). ZMOT highlights the online research that happens before either of those moments.

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Ecommerce Glossary

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Term of the Day

Abandoned Carts

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ROAS

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ROI

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RaaS: Retail-as-a-Service

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Recommendation Engine

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Referral Marketing

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Retention

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Reward Program

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SEM

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SEO

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SKU: Stock Keeping Unit

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SMM

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Secure Sockets Layer (SSL)

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Shipping Cost

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Shipping Method

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Shopify Pixels

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Shopping Cart

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Sitemap

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Social Commerce

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Social Proof

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Store Credit

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Subscription Bundle

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TAM

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Thank You Page

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Tiered-Cart Discounts

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Trust Badge

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Two-factor authentication (2FA)

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UPC: Universal Product Code

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Upsell

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Visual Search

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Voice Search

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Volume Discounts

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Wishlist

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Zero Moment of Truth (ZMOT)

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