Glossary for Shopify promotions and testing
Plain definitions of the terms behind gifts, bundles, discounts, upsells and offer tests, each with the catch that costs merchants money.
A/B test
An A/B test randomly splits visitors between two versions of a page, price or offer and compares an outcome such as profit per visitor.
Attach rate
Attach rate is the share of orders that include a specific add-on, such as a free gift, an upsell or a bundle. If 120 of 1,000 orders carry the add-on, the attach rate is 12 percent.
Automatic discount
An automatic discount is a discount that applies at checkout when the cart meets its conditions, with no code for the shopper to enter.
Average order value (AOV)
Average order value is the total revenue from orders in a period divided by the number of orders in that period. A store that took 20,000 dollars from 400 orders has an AOV of 50 dollars.
BOGO (buy one, get one)
BOGO is a promotion in which a shopper who buys one item gets a second item free or at a discount. The second item is usually the same product, though it can be a different one.
Break-even discount
A break-even discount is the largest discount that leaves profit unchanged, given the extra orders or units it brings. Past that point, each extra order costs more than it earns.
Buy X get Y
Buy X get Y is a promotion where buying a set quantity or value of some products earns a reward on others, such as two shirts and a free pair of socks.
Cross-sell
A cross-sell is an offer for a complementary product that goes with what the shopper is buying, such as a case with a phone or a conditioner with a shampoo.
Discount code
A discount code is a text code the shopper enters at checkout to get a discount. Codes can be single, unique per person or created in bulk for a campaign.
Discount combinations (stacking)
Discount combinations are the rules that decide whether two discounts can apply to the same order. On Shopify each discount has a class and you choose which classes it may combine with.
Fixed bundle
A fixed bundle is a set of specific products sold together at one price. The shopper buys the whole set and cannot swap items.
Free shipping threshold
A free shipping threshold is the minimum cart value at which shipping becomes free. Set it too low and shipping eats the margin; set it too high and shoppers abandon the cart.
Frequently bought together
Frequently bought together is a recommendation that offers products customers often buy with the item being viewed, usually with a small bundle discount.
Gift with purchase
A gift with purchase is a free item added to an order when the shopper meets a condition, usually a minimum spend or the purchase of a particular product.
Incrementality
Incrementality is the part of a promotion's results that would not have happened without it. A promotion that only discounts orders that were coming anyway has low incrementality.
Margin floor
A margin floor is the lowest margin you will accept on an order, used as a cap so no discount, gift or bundle can push an order below it.
Mix and match bundle
A mix and match bundle lets the shopper choose which items from a set make up the bundle, for a fixed price or a discount once a quantity is reached.
Multipack
A multipack sells several units of the same product together, usually at a lower price per unit than buying one at a time.
Post-purchase offer
A post-purchase offer is an extra product offered after payment, on a page before the order confirmation, so it does not interrupt the original checkout.
Profit per visitor
Profit per visitor is the total profit from a group of visitors divided by the number of visitors in that group. It counts orders, order value, cost and discounts in one number.
Quantity breaks (volume discounts)
Quantity breaks, or volume discounts, lower the unit price as the quantity rises, for example 10 percent off two units and 20 percent off three.
Sample ratio mismatch (SRM)
Sample ratio mismatch is when the share of visitors in each version of a test differs from the split you configured by more than chance allows. It signals a bug in how visitors were assigned or counted.
Shopify Functions
Shopify Functions are small programs written by app developers that run inside Shopify's checkout to customize discounts, shipping and payments.
Tiered gifts
Tiered gifts are free rewards that unlock at several spend levels in one cart, such as a sample, then a full-size product, then free shipping.
Upsell
An upsell is an offer for a higher-priced or larger version of what the shopper is buying, such as a bigger size or a premium variant.