A
AOV
Average Order Value
What it is
Average value per order. Computed as total revenue / number of orders in a period. The KPI most sensitive to upsell, cross-sell, and free-shipping threshold strategies.
Why it matters
Stagnant AOV = you're getting customers but not monetising them fully. Raising AOV by 10% is almost always more profitable than acquiring +10% customers (CAC is the highest cost line).
What to demand
AOV tracking by source/medium and product category. Test free shipping threshold (e.g. €60). Bundle discounts and "frequently bought together" on product page and checkout.
Abandoned Cart
Carrello abbandonato
What it is
User who adds products to cart but doesn't complete checkout. Average rate: 65-75% (Baymard Institute). Reasons: unexpected extra costs (shipping, tax), forced account creation, long checkout, low perceived security.
Why it matters
Cart recovery is worth 5-15% of total conversions. Well-built post-abandonment email sequence = free revenue. Without tracking, you lose the opportunity.
What to demand
Abandoned cart tracking in GA4 (begin_checkout event without purchase within 24h). 3-step email sequence (1h, 24h, 72h). Guest checkout always available and pre-load shipping/tax in cart.
ATC
Add to Cart Rate
What it is
Percentage of product page visitors who add to cart. Average benchmark 5-12% (varies by industry). Fundamental KPI to measure product landing quality.
Why it matters
Low ATC (<3%) = product page not convincing: poor photos, weak description, non-competitive price, missing social proof or reviews. Optimisation step one.
What to demand
A/B testing on PDP: multiple photos + zoom, short videos. Starred reviews (Product schema). Benefit-driven description (not feature-list) and CTA above-the-fold.
B
B2B / B2C
Business-to-Business / Business-to-Consumer
What it is
B2B = sell to other businesses (high volumes, long cycle, multi-stakeholder, deferred billing). B2C = sell to end consumers (low single volumes, fast cycle, individual decision, immediate payment).
Why it matters
B2B e-commerce needs features B2C doesn't: per-client private catalogues, negotiated prices, quote system, invoice payment, multi-user accounts. A B2C platform bent to B2B sucks at both.
What to demand
For B2B: dedicated platform (Shopify Plus B2B, BigCommerce B2B, Magento Adobe Commerce). For B2C: standard Shopify, WooCommerce, BigCommerce. No "B2B on basic Shopify with plugins".
C
Cart
Carrello
What it is
Page/section showing selected products before checkout. Persists in session (anonymous) or user (logged-in). Edge cases: cross-device sync, expiry, quantity rules.
Why it matters
Bad cart UX = abandonment. Cart that doesn't persist cross-device for logged-in users = loyal customer loss. Cart with hidden costs until checkout = conversion killer.
What to demand
Cart drawer/page with pre-loaded shipping + tax (no surprises). Cross-device persistence (logged users). Both "View cart" + "Continue shopping" CTAs visible.
Checkout
What it is
Flow from cart to confirmed order. Typical steps: shipping address, shipping method, payment, review, place order. Single-page or multi-step.
Why it matters
Every extra step = ~10% drop-off. Forcing account creation = -25% conversion (Baymard). Sub-optimal layout = real loss.
What to demand
Checkout 1-page or ≤3 steps. Guest always available and address autofill + Apple/Google Pay. Inline validation, progress indicator, mobile-first.
Conversion Rate
CR / CVR
What it is
Percentage of visitors completing a target action (purchase, signup, lead). E-commerce average: 1-3% for generic traffic, 5-10% for branded traffic.
Why it matters
Double CR = double revenue at the same traffic. CR optimisation (CRO) almost always has higher ROI than acquisition (more traffic).
What to demand
CR tracking by source/medium, device, landing page. A/B testing setup (Google Optimize replaceable with VWO, Convert, AB Tasty). Continuous tests on critical elements (CTA, headline, price).
CRO
Conversion Rate Optimization
What it is
Discipline of optimising the site to raise CR. Cycle: hypothesis (data/heatmap/user-research-based) → A/B test → statistical analysis → winner implementation.
Why it matters
Without CRO, you rely on gut feeling. With CRO, every change is data-driven. On 1000 orders/month, +10% CR = 100 extra orders/month.
What to demand
CRO stack: GA4 + heatmap (Hotjar/Microsoft Clarity). A/B testing tool + custom event tracking. Quarterly test roadmap with ICE/PIE scoring prioritisation.
Cross-sell
What it is
Suggestion of complementary products to the one viewed/in cart. Example: "Add the cover too" on iPhone page. Different from upsell (higher version of same product).
Why it matters
Well-done cross-sell raises AOV 10-30%. Stupid cross-sell (suggesting unrelated stuff) just makes people click "X".
What to demand
Algorithmic cross-sell (co-purchase data based), not manual. Positions: PDP "Frequently bought together", cart drawer, post-purchase. Never >3 suggestions to avoid overload.
D
Dropshipping
What it is
Business model where you sell products without holding stock. When an order comes, you forward it to the supplier who ships direct to the customer. You margin the difference.
Why it matters
Pro: no stock, no warehouse. Con: low margins (15-30%), long shipping (China 2-4 weeks), zero quality control, saturated market. Not "easy" as sold on YouTube courses.
What to demand
For serious dropshipping: EU/USA suppliers (no pure Aliexpress), data-driven product research, strong brand differentiation (custom photos, own packaging). Without it, it's a race to the bottom.
F
Fulfillment
What it is
All post-order operations: picking (take product from warehouse), packing (box it), shipping (deliver). Can be in-house or outsourced (3PL — Third Party Logistics, e.g. Amazon FBA).
Why it matters
Slow or sub-par fulfillment = negative reviews + churn. Fulfillment cost is 15-30% of COGS in median retail.
What to demand
Measured fulfillment KPIs: order-to-ship time (target <24h), shipping accuracy (target >99%), damage rate (target <0.5%). 3PL only if >500 orders/month volume justifies it.
G
GMV
Gross Merchandise Value
What it is
Total value of products sold on a platform in a period, before deducting commissions/refunds/costs. Used for marketplaces (Amazon, Etsy, Shopify) — the number investors look at for scaling.
Why it matters
GMV is a vanity metric if not correlated to margin. A marketplace growing GMV +200% YoY with negative margin = burning capital, not sustainable.
What to demand
GMV + take rate (commission %) + contribution margin per category reporting. Never present only GMV in a board meeting without margin.
H
Headless Commerce
What it is
E-commerce architecture with backend (catalogue, orders, payments) separated from frontend (presentation). E.g. Shopify Hydrogen, BigCommerce + Next, Medusa + Remix. Frontend served via API.
Why it matters
Headless = top perf + custom UX impossible on templates. Cost: 15-50k€ initial dev, strong team. Justified above 500k€/year revenue.
What to demand
For headless: platforms with mature APIs (Shopify Storefront API, BigCommerce GraphQL), edge CDN (Vercel/Netlify), perf monitoring. Decision matrix before migrating.
L
LTV
Customer Lifetime Value
What it is
Total value a customer brings during their entire relationship with the brand. Computed as AOV × purchase frequency × retention. Predictive of how much you can spend on CAC.
Why it matters
Rule: LTV/CAC ratio > 3 sustainable. If LTV = 100€ and CAC = 50€, ratio 2 = you're burning margin. Without LTV you can't judge if ad spending is rational.
What to demand
LTV calculation per segment (acquisition channel, first product, geo). Monthly cohort retention dashboard. Alert when LTV trends down (predictive of churn).
M
MRR
Monthly Recurring Revenue
What it is
Monthly recurring revenue from subscriptions. Valid for subscription-based e-commerce (Dollar Shave Club, HelloFresh) and SaaS. Not for one-shot e-commerce.
Why it matters
MRR is a more valuable metric than pure retail: revenue predictability, higher VC valuation. If you have a consumable, considering subscription model can double valuation.
What to demand
Clear subscription tiers, monthly churn tracking, expansion MRR (upsell existing) + new MRR (acquisition). Target Net MRR Growth Rate >5% monthly in early stage.
Marketplace
What it is
Platform connecting sellers (third-party) to buyers. Examples: Amazon Marketplace, Etsy, eBay, Zalando Connected Retail. Revenue model: per-transaction commission (take rate).
Why it matters
Selling on a marketplace = free traffic, but you give up 8-30% commission + platform dependency. Hybrid strategy (own site + marketplace) protects from single dependency.
What to demand
Channel mix: 60-70% own site (high margin, brand control), 30-40% marketplace (volume, brand reach). Never 100% marketplace (TOS-change risk like sudden Amazon bans).
N
NPS
Net Promoter Score
What it is
"How likely are you to recommend the brand to a friend/colleague?" on a 0-10 scale. Detractors (0-6), Passives (7-8), Promoters (9-10). NPS = %Promoters − %Detractors. Range -100 to +100.
Why it matters
NPS measures word-of-mouth potential, a leading indicator of organic growth. NPS <30 = brand doesn't drive word-of-mouth, growth will be paid only.
What to demand
Post-purchase NPS survey (30 days after) + post-support, target >40 (retail benchmark). Follow-up open question "why?" for qualitative insight. Tools: Delighted, AskNicely, custom Typeform.
O
Omnichannel
What it is
Strategy where customer experience is consistent across channels (online, physical, mobile, social, marketplace). Not multi-channel (separate channels) but integration (e.g. buy online pick up in store, cross-channel returns).
Why it matters
Omnichannel customers spend +30% lifetime vs single-channel (HBR). Not implementing omnichannel today = leaving value on the table.
What to demand
Unified customer ID cross-channel, unified inventory (real-time stock available online + physical), retail staff with access to customer online orders, BOPIS (Buy Online Pickup In Store) at least optional.
P
Payment Gateway
What it is
Service processing card/PayPal/Apple Pay payments between customer and merchant. Examples: Stripe, Adyen, PayPal, Mollie, Braintree. Typical commission: 1.4-2.9% + fixed per-transaction fee.
Why it matters
Wrong gateway = high transaction fees + high 3DS failure rate = lost sales. Region matters: Stripe top USA/EU, Adyen enterprise global, PayPal high brand trust.
What to demand
Multi-gateway setup (e.g. Stripe primary + PayPal secondary), local payment methods (SEPA EU, Klarna BNPL, iDEAL NL), optimised 3DS Authentication (frictionless when possible).
PIM
Product Information Management
What it is
Central system for managing product information (title, descriptions, attributes, images, translations) and distributing to multiple destinations (site, marketplace, ERP, paper catalogue). E.g. Akeneo, Pimcore, Salsify.
Why it matters
Without PIM, product content lives in spreadsheet/email/CMS = chaos, errors, out-of-sync translations. Catalogue >500 SKU + multi-channel = PIM becomes almost mandatory.
What to demand
PIM if >500 SKU + multi-channel + multi-language. Below, custom CMS structure may suffice. Akeneo Community is free (open source), Salsify enterprise paid.
R
Returns Rate
Tasso di reso
What it is
Percentage of returned orders. Benchmark: fashion 15-30%, electronics 5-10%, beauty 3-7%. Category with returns rate >25% = significant logistics cost.
Why it matters
High returns rate erodes margin: return shipping + restocking + product loss if unsellable. Common causes: non-representative product photos, wrong sizing chart, vague product description.
What to demand
Track returns by category + reason (size, defect, expectations mismatch). Returns reason analytics drive product description/photo improvements. Returns process via self-service portal.
S
SKU
Stock Keeping Unit
What it is
Unique code identifying a product variant (e.g. "TSHIRT-RED-M" = red T-shirt size M). Different from product (red T-shirt) which may have multiple SKUs (size XS/S/M/L/XL).
Why it matters
Inconsistent SKU naming = inventory + analytics nightmare. Duplicate SKUs = wrong order/missed inventory. Standard naming pattern is essential infrastructure.
What to demand
Documented SKU pattern: [CATEGORY]-[VARIANT]-[SIZE], e.g. TSHIRT-RED-M. Unique SKU enforced via DB constraint. Quarterly audit tool for dup detection.
Shipping
Spedizione
What it is
Product delivery service to customer. Variables: cost, time, carrier (DHL/UPS/FedEx/local post), insurance, tracking, return policy.
Why it matters
Shipping = #1 reason for abandoned cart (50% of cases when added only at checkout). Free shipping is the single most powerful CRO lever (with AOV threshold).
What to demand
Transparent shipping cost from cart (no checkout surprises), tested free shipping threshold (AOV uplift), real-time tracking, multiple carriers per region. Never hidden shipping until checkout.
U
Upsell
What it is
Suggestion of a higher (more expensive) version of the same product. Example: at a restaurant "want the large menu?". Different from cross-sell (complementary product).
Why it matters
Well-done upsell raises AOV +15-25%. Pushy or irrelevant upsell = annoyance + churn.
What to demand
Only relevant upsell (e.g. "premium version of same product", not "another brand"). Position: PDP + cart drawer. Frame as "Upgrade for X€ more".
Now when a vendor tells you "GMV is growing", you know what to ask right after (margin, take rate, churn).