Bold's 2022 commerce lexicon
Third-party logistics (3PL) fulfilment is when the entire retail order fulfilment process is outsourced to a dedicated vendor. By allowing a 3PL to handle all aspects of fulfilment — including receiving orders picking and packing, inventory management, shipping, and warehousing — ecommerce companies can increase efficiency and focus on business development.
A/B testing (or split testing)
A/B or split testing is a method of determining the most successful element of a commerce company’s shopping experience. This can include:
- Site design
- Store content
- Site functionality
- Page elements
- Webpage variations
- Checkout flows
- Or anything else that may affect customer behaviour
An agile CMS, as defined by Forrester, is a content management system that is comprised of four components:
- A content hub where teams can find and manage content in one place
- Collaboration and planning tools to maximize communication and feedback
- API-first content services to create, manage and track content at scale
- A development platform that fits seamlessly into the existing tech stack
API or Application Programmable Interface-based systems are made up of software intermediaries that allow applications to securely access and transfer data. The API governs server access points and collaborates with other applications through seamless integration. All functionality of a software application is exposed through APIs.
Best-of-breed solutions consist of the best products of each category, and are integrated to suit a company’s specific goals and address distinct pain points and niches, instead of selecting one, large single-vendor solution. This specialization allows ecommerce companies to offer more extensive capabilities while optimizing output and increasing innovation.
BODFS stands for buy-online-deliver-from-store. This method of fulfillment uses physical store spaces as fulfillment centers and leverages existing store inventory to complete orders. It can help retailers increase speed of delivery and reduce the need for discounting merchandise at the end-of-season or end-of-life.
BOPIS stands for buy-online-pickup-in-store. Offering a BOPIS option means customers can make online purchases and pick up the order in person, either from a designated customer service or pickup area, inside or outside a brick-and-mortar store.
BORIS stands for buy-online-return-in-store. With a BORIS option, customers can purchase items online, have them delivered to their residence, and if they’re unsatisfied with their items, they can return them at a physical store, even at a location they’ve never visited.
BOSS stands for buy-online-ship-to-store. This backend process essentially ensures retailers will never be out of stock, as items can be shipped from the warehouse and the customer picks them up in-store. BOSS also reduces store footprint size, eliminates the need for third-party delivery services, and increases turnover, distribution efficiency and cost.
Build-a-box is a type of subscription model where brands offer a selection of products customers can choose from, and set how many items customers can add to their box, which allows them to curate their own custom subscription. Build-a-box models give subscribers more customization and control over perceived quality and quantity. It ensures a subscription remains fresh and interactive while providing brands insight into what products are most popular.
Buy now pay later (BNPL) services
Buy now pay later (BNPL) services allow customers to buy an item and pay for it later in interest-free instalments. BNPLs are low-commitment, user-friendly and budget-focused alternatives to credit cards, while offering the same benefits without the interest fees. BNPL customers can use the services immediately without application processes or background checks, and can defer payments for longer periods than a monthly credit card billing cycle.
Cart abandonment rate
Shopping cart abandonment is when a potential customer adds items to the cart but never completes the purchase. The cart abandonment rate is the ratio of the number of abandoned shopping carts to the number of initiated transactions or completed transactions. Average cart abandonment is as high as 88%.
A checkout experience describes the steps in the customer journey that happen after the customer makes a decision to buy and enters the checkout flow, until the placed order is confirmed including:
- The payment transaction
- Payment methods, including credit cards, digital wallets, gift cards, and instalment or micropayments.
- Domestic and international tax calculations
- Fraud management
- Unique fees such as eco fees, and donation options
- Customer verification such as age, VIP, employee, military, government, etc.
- Shipping and delivery options, such as BOPIS, and standard or express delivery times and related charges
- Subscription offers
- Offers and promotions with/without promo code; upsell and cross sell offers
- Loyalty sign up, points accumulation or redemption.
Modern checkout experiences should address the complex and unique needs of the business and provide a frictionless, convenient experience for shoppers.
CIAM stands for Customer Identity and Access Management. It enables companies to securely capture and manage customer profile data, and also control customer access to services by requiring customers to create accounts and register their identities. Key features include:
- Self-service for registration
- Password management
- Profile creation and management
- Authentication and authorization
- Social identity registration and login
Cloud-native application leverages the cloud, beyond storage and hosting, including elastic scaling and automatically updating. Cloud-native applications can be deployed in public, private or hybrid clouds and are characterized by elastic scalability and high availability.
“Composable commerce” is a term trademarked by Gartner to refer to modular ecommerce. It is an approach to platform development that entails composition of a target ecommerce solution from independent components (Packaged Business Capabilities). It provides greater flexibility and agility for brands than traditional platform approaches.
Conditional logic is the concept of setting rules, or conditions, that cause your business process to change based on customer input. It can be used to streamline forms and workflows through an “if this, then that” structure. If customers make a certain choice or fulfill a condition, they are then presented with further options or given benefits based on that choice.
Content management system (CMS)
A content management system (CMS) is a software platform that allows ecommerce companies to create, edit and publish website content without writing any code. Users can change the look and feel of the online store, by modifying product page layout, adding new sections to promote specific products, or adding promotional banners.
Ecommerce CMS software can be divided into two main categories:
- SaaS, or cloud-based, which doesn’t require a separate server and is hosted and managed by the software vendor.
- Open source, which gives users full control over website functionality, and is often self-hosted.
Conversion rate optimization
Conversion rate optimization is achieved by taking steps to increase the percentage of users who perform a desired action in a digital shopping experience. These actions include:
- Purchasing a product
- Adding an item to a cart
- Signing up for a service
- Filling out a form
- Clicking on a link
- Downloading a file
- Any other type of call-to-action
CPQ stands for Configure, Price, Quote. It is software used by companies to produce quotes and process orders for configurable products. CPQ provides accurate product options and prices based on a predetermined set of specifications that takes into account several different variables, including quantities, discounts, customizations, configurations, specializations, and incompatibilities.
Cross selling is a sales technique that encourages customers to spend more by buying a product related to one they’re already in the process of purchasing. Effective cross selling identifies products that satisfy additional or complementary needs that may be unfulfilled by the original item being purchased, or strategically points customers to products they likely would have purchased regardless.
Customer Lifetime Value (CLV)
Customer Lifetime Value (CLV) represents the total amount of money a customer spends on a company’s products or services over the entire duration of their relationship. This is calculated by multiplying the average value of a purchase by the number of times a customer will buy each year by the average customer relationship length in years.
Digital experience platform (DXP)
A digital experience platform (DXP), as defined by Gartner, is an integrated set of core technologies that engage with multiple audiences across a range of digital touchpoints to support the composition, management, delivery and optimization of contextualized digital experiences.
A digital wallet is an online service or software-based system that allows customers to complete purchases from an online store with a computer or smart device. It securely stores customer payment information and passwords for several websites and payment methods. A customer’s bank account can be linked to the wallet and money can be deposited before transactions.
Dunning management is an automated mechanism for payment recovery in the event of a payment failure or declined credit card. Customers are notified of the failed charge via applicable communication methods (email, text message, in-app notification, in-person phone call) and the payment recovery process is initiated.
Ecommerce tech stack
An ecommerce tech stack is the combination of all the frontend and backend software, frameworks, tools, apps, platforms and programming languages layered on top of each other to create a fully operational ecommerce system.
Fraud managementFrom an enterprise perspective, fraud management consists of real-time screening of transaction activity across users, platforms and processes, in order to identify and prevent internal and external fraud. Fraud management tools analyze the behavior between related accounts, channels and other entities to identify possible signs of criminal activity, corruption or fraud.
Headless commerce is a type of ecommerce architecture that refers to the decoupling of the frontend (or consumer-facing) content of a store from the backend commerce capabilities. Separating the frontend (“head”) from the commerce engine (“body”) gives enterprise brands freedom to use different technology for each end and customize each to enhance the shopping experience. The term was coined by Dirk Hoerig, Co-Founder of Commercetools in 2013.
MACH architecture stands for Microservices, API-first, Cloud-native and Headless. This set of modern technology principles, when combined, creates a modular architecture environment that allows ecommerce platforms to be built in a more agile and adaptive way.
Micropayments are ecommerce transactions involving a very small sum of money in exchange for an online product, application, web-based content or service. Payments are usually less than a dollar and can be as low as a fraction of a cent. Because these payments are often too small to be feasible for credit card companies to process, a special type of system is required to handle micropayments.
Microservices are a set of small, independent services that come together to create a software application, i.e. an ecommerce platform. Microservices are small in size, distributed, connected through APIs, and independently deployable. Microservices are often built, released and deployed leveraging automated processes.
Mobile optimization is the practice of providing an engaging and user-friendly experience for visitors accessing ecommerce websites from mobile devices. Ways to optimize a website for a user’s specific device include:
- Reduce image size and format content
- Social log-in
- Checkout with Paypal/Apple Pay
- UI engineered for mobile
- Avoid visual clutter
Modular commerce is an approach to ecommerce development that involves building a platform’s functions around a set of connected and integrated components that can be consumed independently, instead of a traditional, pre-packaged system. This allows ecommerce companies to scale more efficiently, be more flexible, agile, and innovative.
Omnichannel commerce is the offering of a customer shopping experience across all digital, mobile, offline and in-person channels. Retailers should seek to deliver a seamless, relevant, unified commerce experience across all channels to drive share of wallet, increase retention and maximize customer lifetime value.
Order management system (OMS)
An order management system (OMS) is a tool or platform that enables the people and processes necessary for products to make their way to the customers that purchased them, by tracking sales, orders, inventory and fulfillment.
Payment card industry (PCI) compliance
Payment card industry (PCI) compliance refers to the technical and operational standards followed by companies to protect credit card holder data transmitted through processing transactions. PCI compliance is mandated by credit card companies in order to ensure secure transactions.
A payment gateway is a merchant service provided by an ecommerce company that authorizes credit card or direct payments processing for both online and traditional businesses. The gateway facilitates the transaction by transferring information between a payment portal and the frontend processor or financial institution.
Personalization in commerce refers to the process of dynamically showing content, product recommendations or offers based on a customer’s previous actions, such as:
- Browsing behavior
- Purchase history
- Referral source
- Other personal data or contextual information
Product information management (PIM)
Product information management (PIM) is a solution that acts as a single source of truth to evaluate, identify, store, manage and distribute product data to various sales channels. It facilitates the central management and maintenance of any information related to a company’s product system from raw data to product content.
Point of sale transaction
A point of sale (POS) transaction occurs when a payment is made by a customer in-store in exchange for products or services. The buyer enters their payment information and the funds are transferred to the seller.
ROPIS stands for reserve-online-pickup-in-store. This option allows customers to shop on a website, select and reserve items, and then come into a physical store location to decide whether or not to purchase the items. This process gives customers the freedom to shop around, as well as to help guarantee they will get their desired items, especially if they’re in high-demand or low in stock.
A subscription is a business model in which a brand offers products or services to a customer for a recurring price at regular intervals. There are three main categories of subscriptions: 1) recurring replenishment; 2) curation; and 3) access. Subscriptions are valuable for both customers and brands. Customers enjoy the convenience of products and services without interruption while brands can deepen customer relationships and build predictable, recurring revenue.
Third-party payment processor
A third-party payment processor is an independent services entity that allows businesses to offer more payment methods to customers without needing to set up a merchant account with a financial institution.
Upselling is a sales technique that encourages customers to spend more by buying a premium or higher-end version of the item they’re in the process of purchasing. Comparison charts are often used to market upgraded products, helping customers visualize the greater value they will receive by ordering a higher-priced item.