How to Use Shopify Analytics?

Shopify is a top choice eCommerce platform nowadays, suitable for any type of business. It caters to beginners due to its ease of use, customizable themes, and powerful marketing tools, as well as to medium and even enterprise-level businesses due to its advanced features.

But building a successful online business requires more than just setting up a store. To succeed, store owners must continuously adapt and optimize their strategies to changing market trends and user behavior. How do they do it effectively? They need data to drive their business decisions. By analyzing the wealth of available data, businesses can gain an accurate overview of their store's health, customer satisfaction, and overall profitability. Shopify has a built-in tool - Shopify Analytics that offers robust dashboards and reports that give store owners access to their store's crucial data.

What is Shopify Analytics?

Shopify Analytics is a set of tools that provides merchants with relevant data on various aspects of their business, including store performance metrics, sales, customer behavior, marketing campaigns, inventory management, and more.

How to Access Shopify Analytics

As Shopify Analytics is built-in, there's no need for custom coding or configuration. Simply log into your Shopify store, and you'll find both analytics dashboards and full reports in the left-hand admin menu. Although it is a bit overwhelming in the beginning, the tool is incredibly user-friendly, so you don't need to be a data analyst to interpret the numbers. Additionally, you can integrate third-party tools with Shopify to access even more insights into store performance.

What is the Shopify Analytics dashboard?

When you log into your Shopify store and click the analytics button in the left-hand menu, you are taken straight to the Shopify analytics dashboard. This dashboard is an all-encompassing overview of your store's performance, providing quick insights into key metrics such as total sales, online store sessions, top products, average order value, and more. It offers real-time data and visual summaries that allow you to monitor your store's health at a glance. The dashboard is typically the first place merchants visit to get a general snapshot of their store's activity without needing to dive deep into specific numbers. You can customize it, select the desired timeframes, and even compare specific data.

What are Shopify Reports?

In contrast to the dashboard, Shopify Reports provide much more detailed, in-depth data analysis. Reports provide a closer look at specific areas of your store's performance, such as sales by product, traffic sources, customer behaviors, and marketing effectiveness. They offer a more granular view of your store's operations, which can be used for more strategic decision-making. 

It's important to note that the report types and depth vary according to your Shopify plan. However, there are useful reports even in the most basic plan. On the Advanced Shopify and Shopify Plus plans, you can create custom reports for specific business needs, i.e. you can combine different metrics, and customize reports to align with your desired goals and objectives.

Here are the types of Shopify reports available to store owners and their overview:

Acquisition reports provide insights into your website visitors. You can check the number of visitors during a specified time frame and sources they come from, whether directly, through search, or via referral links like affiliate links or Facebook ads. You can also see the countries and regions from which visitors access your online store. This information can be useful for targeting specific regions and optimizing traffic sources to improve overall store performance.

Behavior reports provide insights into how visitors interact with your website, tracking their journey from landing on your site to making a purchase (or leaving without one). You can check top search terms customers use, including searches with no results, and analyze sessions by landing page and device type. Additionally, cart analysis reveals commonly added products, offering opportunities for bundling and upselling. Understanding visitor behavior can help you make informed decisions on inventory stocking, organizing product collections, identifying products for marketing campaigns, and much more.

Customer reports provide information about customers, such as their average order count, purchase totals, and expected purchase value, helping you segment your audience for marketing campaigns. These reports track how many customers placed orders over a set period, show customer data by location, and compare the value of orders between returning and first-time customers. Analyzing these reports can help you identify your most valuable customers and tailor your marketing strategies accordingly.

Inventory reports provide a month-end snapshot of stock levels. You can track the quantity of each product variant left in stock at the end of the month, the average number of items sold per day of each product variant, and the percent of the inventory sold. You can also access an ABC analysis by product, which grades variants based on their contribution to revenue, as well as report on days of inventory remaining. These insights help track stock levels, prevent stock-outs or overstocking, and evaluate product performance to optimize inventory management and refine product offerings.

Marketing reports provide insights into which marketing channels generate the most traffic, sales, and value. You can track how many sales can be attributed to specific marketing efforts, view the number of orders from first-time and returning visitors, and analyze the average value of these orders. Additionally, attribution model comparisons highlight any drop-offs in returning customers. These reports help assess the effectiveness of marketing channels and promotional activities, guiding decisions on whether to continue or adjust marketing strategies.

Order reports offer valuable information on order volume, shipping times, and returns,  helping store owners identify best-selling products and those with higher return rates, which may indicate defective merchandise. Key reports track the number of orders fulfilled, shipped, or delivered over a specific timeframe and the time it takes for orders to move through the fulfillment process—from placement to delivery. These reports allow for better understanding of product quality, customer satisfaction, and areas for improvement.

Retail sales reports are available only for merchants selling in person. They provide insights into products, variants, and staff performance at specific point-of-sale (POS) locations, helping store owners identify which products sell best in different areas and offer valuable data on staff sales performance. So, if you are selling physically, you can generate reports that show total sales by product, product variant, vendor, and product type, all grouped by POS location. Additionally, reports track sales performance by individual staff members and specific locations so you can optimize staff performance and make informed decisions about store operations.

Sales reports, similar to retail sales reports, show information about your customers' orders 

based on criteria like product or sales channel while accounting for returns, making them useful for tracking long-term sales value. These reports show sales as positive values for the day they occurred and returns as negative values for the day they were processed. You can check the number of orders and total sales over a specific period of time, sales by product, product variant, vendor, and traffic referrer. Additional reports track sales by billing location, currency, sales channel, and customer name, offering insights into order trends, average order value, and sales performance across different channels and markets.

Profit margin reports show information about the costs, margins, and profit of your online store, helping in financial planning and identifying areas for cost optimization. These reports allow you to track profit by product, product variant, and point-of-sale location, making them especially valuable for retail merchants with multiple locations. For accurate profit reporting, it's important to add the cost-per-item attribute to each product variant in your store. 

Fraud reports provide key data on potentially fraudulent orders, helping you monitor and address fraud risks. These reports show how many orders were accepted as not risky, flagged as high-risk, and orders that have been canceled due to fraud. Shopify Payments users can also access chargeback reports, including their overall rate and value. 

Finance reports provide insights into your Shopify store's financial performance, including payments, sales, actual profits, accounting, and taxes. Key reports include summaries of total sales, payments by type, gross profit, taxes, and specific insights into gift card sales, shipping costs, and discount usage. These reports can be invaluable for financial management, aiding in budgeting, forecasting, and strategic planning.  

What is Shopify Live View?

Shopify Live View is a real-time monitoring tool allowing merchants to track current traffic, sales, and customer interactions as they happen. It includes a world map (two-dimensional) and a globe (three-dimensional) to show you where the activity on your store is coming from and some key metrics to let you know what's happening right now. You can observe how many visitors are currently on your website, which pages they are viewing, and their geographic locations. You can also track the number of orders being placed and the total sales amount in real time. The feature provides immediate insights into customer preferences and buying trends and is especially useful during high traffic periods, such as Black Friday and Cyber Monday, and when you want to see the immediate results of your recent marketing activity, discounts, or other promotions.

How To Analyze Data Obtained?

Data is just data unless you know how to extract valuable insights from it. To avoid getting overwhelmed by the number of reports and data generated by Shopify Analytics, focus on the metrics that correspond to your specific business goals and are essential for growing your online business. Begin with one analytics dashboard, get familiar with it, and then explore specific reports. When comparing figures, start small — for example, consider an increase in monthly traffic as progress, even if it's just a bit more than the previous month. The same principle applies to every other metric you're tracking. Keep experimenting with filters and columns until you're comfortable with the tool, then expand your analysis. 

Previously, in our blog available here we discussed some of the most important business metrics applicable for startups. Some additional important metrics specific to e-commerce business not disclosed there may be:

• Average Order Value (AOV): See how much customers spend per transaction on average.

• Top Products: Identify which products are driving the most revenue.

• Repeat Customer Rate: show the percentage of customers who have made more than one purchase from your store. Customer Retention Rate

Bottom Line

Shopify Analytics is your invaluable tool for improving marketing, enhancing customer experiences, and boosting store performance. When you start using it, don't get overwhelmed with the volume of data and the amount of possible reports. Instead, focus on the metrics that match your business goals. Regularly track and analyze these metrics to reveal underlying factors affecting your data and take necessary actions. Treat analysis as an ongoing process of asking questions. Experiment with different filters and views, and refine your approach.