21.1.1. Common Jargon

● Cart Abandonment: When a user adds items to a cart but doesn’t complete the purchase

Cart abandonment is a common term used in e-commerce that refers to a situation where a customer adds products to their shopping cart but leaves the website without completing the purchase. This occurs despite showing initial interest in the products, often due to various reasons such as unexpected costs, complicated checkout processes, or distractions.

Imagine you walk into a store and pick up several items to buy. As you're about to go to the checkout, you see a long line, and you realize you forgot your wallet in the car. Instead of waiting or going back, you decide to leave the items and walk out. That's similar to cart abandonment online.

● SKU: Stock Keeping Unit (product identifier)

SKU, or Stock Keeping Unit, is a unique identifier for each product that helps businesses keep track of inventory. It often consists of letters and numbers that provide information about the product's features, such as its type, size, and color. Retailers use SKUs to manage stock more efficiently and streamline sales processes.

Think of SKU as a social security number for products. Just like each person has a unique social security number that identifies them, each product has a unique SKU that helps businesses know exactly what item it is, making inventory management easier.

● Fulfillment: The process of packing and shipping the order

Fulfillment in e-commerce refers to the entire process of receiving an order, processing it, packing the items, and shipping them to the customer. Effective fulfillment is crucial for customer satisfaction, as it determines how quickly and accurately customers receive the products they ordered.

Consider fulfillment like preparing a gift for a friend. First, you gather the gift items, then you wrap them nicely, and finally, you deliver them to your friend. Each step is important to ensure that the gift reaches them in good condition and on time.

● COD: Cash on Delivery

Cash on Delivery (COD) is a payment method where customers pay for goods at the time of delivery, rather than in advance. This method is popular among customers who may not trust online payment systems or prefer to see the product before buying it.

Think of COD like ordering food for delivery. You might prefer to pay the delivery person in cash when they bring the food to your door, rather than paying in advance. This way, you can inspect your order before handing over your money.

● AOV: Average Order Value

Average Order Value (AOV) is a metric that reveals the average amount of money spent each time a customer places an order. It is calculated by dividing total revenue by the number of orders. A higher AOV indicates that customers are spending more during their purchases.

Imagine you often go to a cafe. If you usually buy just coffee, your average order value is low. But on special occasions, you buy coffee, pastries, and breakfast, raising your average spend per visit. AOV acts like that average spend across all your visits.

--