An online store allows retailers and merchants to reach a much larger audience than any physical store ever could. If you are a Shopify user, the good news is that you can easily track and measure your results through the Shopify built-in analytics tool.
Shopify Analytics is the closest you can find to Google Analytics without having to open a new tab in your browser—you can access important information directly in your account.
Find out how to utilize Shopify’s built-in analytics tool, why to do it, and a lot more.
Understanding Shopify Analytics
Analyzing key metrics is crucial for assessing your online store’s performance. Shopify offers analytics and reports for analyzing store activity, visitor insights, online store speed, and transactions.
If you use Shopify Analytics, you can get better at:
- Making informed decisions
- Optimizing marketing and advertising
- Promoting your brand effectively
- Identifying optimal products
- Understanding consumer expectations
- Managing inventor
- Increasing profit margins
- Maintaining financial control
- Managing taxes
Evaluation and analysis of your store help you discover the best ways to enhance your customers’ experiences, thus increasing your sales.
Navigating Shopify’s Analytics Dashboard
Shopify’s analytics dashboard is designed to keep track of valuable metrics and provide you with insights into your store’s performance as well as the behavior of your customers. The metrics are usually displayed in numeric format or as graphics.
When you open your Shopify account, navigate to the panel on the left side of the screen. When you click on the Analytics section, you’ll find two subsections. Let’s explain them in brief:
- Reports: There is an overview of your store’s performance over time. You can get an accurate picture of metrics such as sales over time, online store sessions, and conversion rate. You can access data for the past 30 days by default, and you can also extend the time period as you’d like.
- Live View: Here, you can see what’s happening with your store in real time. It provides you with information about total sales, the number of current visitors, and the top locations those visitors come from.
Tracking Sales Performance
Tracking sales performance is crucial to validating the effectiveness of your marketing campaigns. In simple terms, higher sales indicate a successful strategy. With Shopify Analytics, you can easily check important metrics like revenue, conversion rate, and sales by product or collection.
To see information on your revenue, open the Analytics dashboard, access Reports, then Sales, and choose to see Total Sales or Sales by Product/Collection. Here, you can also understand your store’s conversion rate, which is the percentage of visitors who make a purchase with you.
Long-term business success requires thorough planning. Analyzing sales trends is at its core. Here is what to keep in mind:
- Compare different time periods and see how your sales change over time by channel, device, location, and more. For better understanding, visualize your sales trends with a graph.
- Identify top-performing products. Find out which items generate the most sales and filter the table by product type, collection, etc., to evaluate their performance.
- Optimize your pricing strategies by offering discounts, upsells, or cross-sells to increase AOV (average order value). To improve the gross profit and profit margin metrics, try to reduce your expenses and increase your prices.
Beyond understanding sales trends and optimizing pricing, it’s essential to have a go-to-market (GTM) strategy. This strategy ensures you introduce new products or services to the market effectively, capturing your target audience’s attention and achieving successful market penetration.
Analyzing Customer Behavior
Consider segmenting your target audience through the RFM (recency, frequency, and monetary data) technique. It helps analyze each group individually. When you find the most valuable customer segment, it’s important to discover common threads between these clients to target them better.
It’s not easy to predict customer behavior, but some steps can give you a rough idea. There are three basic metrics you must frequently check:
- CLV (Customer Lifetime Value): It’s the probable net profit you are going to get over the entire period of the relationship with that particular customer. After segmenting your audience with the RFM method, you can determine their Customer Value. With this knowledge at hand, it’s easy to understand CLV by multiplying Customer Value by the Average Customer Lifespan.
- CAC (Customer Acquisition Cost): That’s the total amount of expenses to attract a customer. CAC is the amount you spend on marketing divided by the number of customers you acquire.
- RCR (Returning Customer Rate): This metric illustrates how many customers shop more than once from your store. Open Analytics in your Shopify admin page, click on Overview, and you’ll see the Returning Customer rate box.
Monitoring Traffic Sources and Marketing Campaigns
The Marketing section in your Shopify admin allows you to track and analyze your marketing efforts, including key performance indicators, channels, and activities. This data is incredibly valuable as it provides insights into your customers’ responses to your strategies and highlights the top-performing products that are driving your sales.
Visit the Marketing page in your admin panel. Note that it may take up to 24 hours for metrics to update. There are a wide variety of metrics to keep an eye on, but let’s highlight the most important ones:
- Traffic insights: You can access three detailed reports, including the Top Traffic Sources Report, the Top Traffic Locations Report, the Online Store Traffic Report, and the Online Store Conversion Report.
- Sales and orders attributed to marketing: Marketing Summary gives you basic information about the amount of traffic and sales attributed to your marketing efforts for the past 30 days. In addition, the Top Channel Performance Report, Channel Performance Report, Marketing Activities Report, Attribution Models, and Installed Marketing App Activities are available for further analysis.
Once you see how your marketing campaigns are affecting your sales, you can identify the top-performing channels and bestsellers you should focus on. This helps you allocate your resources effectively.
Optimizing Inventory Management
At Shopify, you can keep track of your inventory levels and have them automatically updated when you place an order. Through effective order and inventory management, you can provide seamless customer service and avoid possible depletion or delays.
Metrics such as inventory turnover rate, out-of-stock analysis, and popular product analysis are essential for monitoring your inventory and managing your stock levels efficiently.
- Inventory turnover shows how you deal with managing and selling stock for a particular time period. High turnover connotes more deals, while a low rate indicates the opposite or having excess or obsolete inventory.
- Out-of-stock analysis is made to understand how often your products go out of stock and how long they stay out of stock. Stockouts can hurt your sales, customer loyalty, and brand reputation, so it is important to avoid them as much as possible.
- Popular product analysis indicates which products are selling well and which ones are not. This can help you optimize your product mix, pricing, and marketing strategies.
To improve inventory control and management, utilize Shopify’s inventory reports to forecast inventory demand or use a barcode scanner app to monitor inventory.
Utilizing Shopify Reports and Custom Reports
To help you analyze your business performance, Shopify provides two types of reports: pre-built reports and custom reports.
Pre-built reports are templates that cover common metrics like sales, inventory, customers, and marketing. You are also able to create your own custom reports from scratch.
To analyze the report data effectively, you can apply filters based on date range, product type, customer group, or marketing channel. You can also add or remove columns to customize your analysis. Once you have the filtered data, carefully examine it for patterns and sales trends. Look out for loyal customers and identify which marketing campaigns are most effective.
However, not all metrics are relevant for every business. Custom reports let you focus on the data that matters most to you and filter out irrelevant information.
Leveraging Shopify Apps and Integrations for Advanced Analytics
Shopify offers plenty of apps and integrations that can supercharge your analytics capabilities and help you optimize your online store. Some of the most popular analytics apps for Shopify are:
- Chartio: It helps you create dashboards and reports with advanced data visualization and analytics.
- Optimizely: It’s popular for offering a way to run A/B tests on your website. That method helps you learn how different offers or content affect your conversion rate and revenue.
- SurveyMonkey: This app enables you to collect valuable customer feedback through customizable surveys.
- Zonka Feedback: This survey software allows you to automatically send post-purchase surveys to Shopify customers to capture their feedback and use their insights to prioritize improvements in the shopping experience.
- Jotform Apps: Create an online store directly through your mobile device without using any coding and customize it to match your branding.
These are just some of the apps and integrations that can enhance your Shopify analytics. You can explore more options on the Shopify app store and find the best solutions for your needs.
Conclusion
To gain insights into your store’s performance, customer behavior, and sales trends, it is crucial to utilize Shopify Analytics reports. These reports can provide valuable information tailored to your specific goals.
When you’ve collected enough data to make comparisons and draw conclusions, it’s easier to make the necessary adjustments; optimize your marketing campaigns and budget allocation based on what is proven to work best. Additionally, consider improving store design and enhancing the user experience using the knowledge gained from analyzing the report data. By making informed decisions and leveraging these strategies, you’ll gain an advantage over your competition.
