Growing a Shopify store isn’t as simple as putting up your products on the web and fingers crossed somebody will buy from you.
You need to help your customers find you, assist them in finding the right products, and provide an exceptional shopping experience. There’s one thing that will help you get these things right: data.
In this article, we’re going to show you how you can drive more sales to your Shopify store with data.
Psst! This blog post is based on a podcast episode we did with Duane Brown, Founder & Head of Strategy at Take Some Risks. Check out the full episode.
Check out the Marketing Analytics Show
Learn how to grow your Shopify store with data and insights.
Ready? Let’s dive in.
What Shopify metrics should you track?
Tracking and making sense of all your data can be a daunting and challenging task — because your store generates tons of data.
Here’s the good news: you don’t have to track anything and everything you find. You just need to pay attention to the metrics that can actually help you grow your business.
Typically, they’re revenue, ROAS (return on ad spend), new vs returning customers, cost per add to cart, cost per checkout initiated, and average order value.
Revenue or total sales is your north star metric. It tells you how much money your store is generating.
“At the end of the day, your goal is to make enough money to support your advertising efforts, paying fees and people on your team.”Duane Brown, Founder & Head of Strategy, Take Some Risks
However, looking at your sales number alone doesn’t move the needle. You need to dive deeper to understand what really influences your sales — both negatively and positively.
There are several ways that you can use to analyze your numbers. For example, you can break down your revenue by channel to see which marketing channels drive the most sales. Where does your traffic come from? What channels bring in the most high-quality traffic?
Alternatively, you can also monitor your revenue by month, date, or time to see when your customers will likely purchase from you. Do they shop more on weekends and holidays?
Return on ad spend
Return on ad spend (ROAS) is a good metric to measure your paid campaigns’ success. It tells you if you’re bringing more revenue than what you’re spending on ads.
According to Duane, stores that run a lot of promotion and sale campaigns usually generate a good ROAS. However, it’s not a sustainable way to grow your business in the long term. That’s why when running paid campaigns, you’ll want to get to people who are willing to pay full price for the products.
New vs. returning customers
As your business continues to grow, you’ll want to understand how many new and returning customers are visiting your store.
While new customers are people who have never purchased your products, returning customers, on the other hand, are familiar with you and (typically) happy to shop at your online store. The cost to acquire a new customer is usually higher than the cost to return a customer.
Let’s say you’re spending $50 to acquire a customer— considering your average order value is $45. Your customer acquisition cost (CAC) may be high if the customer just makes a one-off purchase. However, if that customer comes back to your store and makes more purchases, then your CAC, in this case, is fairly cheap.
Cost per add to cart and cost per checkout initiated
Cost per add to cart and cost per checkout initiated helps you understand your store visitors’ purchase intent.
Cost per add to cart tells you how much you’re paying for each item added to a customer’s cart.
As a rough example, your cost per add to cart may be too high if you’re spending $100 for two adds to cart —that’s $50 per one add to cart— when your average order value is $75. It’s hard to be profitable if you’re paying so much to get someone to add an item to their shopping cart.
You can lower your cost per add to cart by:
- Improving the copy on your website.
- Improving the on-site experience, e.g., making sure your website is mobile-friendly.
- Making your CTAs noticeable.
- Changing your target audience. You may have the best copy on your website, but they’re not going to convert if you pick the wrong audience.
Similarly, cost per checkout initiated shows how much you’re paying for each time a customer starts a checkout.
It may surprise you how often someone abandons their cart. You want to make sure your ads attract the right audience and successfully move them further down the funnel.
Average order value
Average order value (AVO) shows the average amount of money a customer spends in one transaction. According to Duane, AOV is an important metric because it helps you understand how much you can spend on advertising.
“Knowing what your average order value helps you figure out, based on your profit margin, how much money you can spend on ads and everything else that isn’t directly related to producing the product and getting it out the door to the customer.”Duane Brown, Founder & Head of Strategy, Take Some Risks
Let’s say your profit margin is 20%, and your AOV is $100. In that case, you only have $20 to spend on acquiring a customer if you want to break even. Realistically, you may not be able to attract new customers with $20 through any paid channels. But as long as you know your AOV and profit margin, you can easily choose a channel that fits the budget and works for you. For example, SEO or organic social media.
5 tips for driving more Shopify sales with data
Now, let’s take a look at five different ways you can analyze your data to help increase your sales:
- Analyze your store overview performance.
- Monitor your inventory.
- Calculate time between orders.
- Calculate the ROAS of your paid channels.
- Analyze the customer behavior on your online store.
Analyze your store overview performance
The easiest way to monitor your store performance is to create a Shopify overview dashboard. This report helps you understand:
- Your current performance.
- Opportunities to grow your store.
Take this Shopify report for Google Data Studio as an example. The overview page gives you a glimpse into your total sales. You’ll see:
- A breakdown of your total sales by channel, vendor, country, and product.
- The number of products you’ve sold so far.
- Your inventory quantity and value.
Moving on to the order and customer tables page From there, you’ll find data about your customers, orders, and inventory. You’ll see the:
- A total number of orders and returns by month.
- Total sales and order by customer details.
- Breakdown of your inventory by product.
Psst! If you’d like to learn more about this template, we wrote a detailed guide covering how to use it and some tips to improve your performance. If you’re already familiar with Google Data Studio, feel free to swipe the template right away. ?
Swipe the Shopify overview template for Google Data Studio
Use this ready-made template to monitor your Shopify store’s performance and inventory.
Monitor your inventory
As an online store owner, you should always know if you have enough inventory in your warehouse. There’s nothing worse than running out of the products your customers highly demand. When products are out of stock, it results in lost sales, and it can harm your customer experience.
That’s where an inventory report comes in handy. With it, you can effectively manage and project your stocks.
We’re going to show you how you can easily monitor your inventory with Supermetrics for Google Sheets.
Psst! In case you haven’t installed the Supermetrics add-on, you can get it here.
Try Supermetrics for Google Sheets today
Get a free 14-day trial of Supermetrics for Google Sheets. No credit card required.
Next, click on ‘Add-ons’ → ‘Supermetrics’ → ‘Launch sidebar.’
You can use this query to get your inventory data. ?
- Data source: Shopify.
- Select accounts: select your Shopify store(s).
- Select dates: choose the date range you want to monitor your inventory for.
- Select metrics: inventory value, inventory quantity.
- Split by dimensions: product ID.
- Filter and options: you can use these settings to segment your data further. However, in this example, we’ll leave them blank.
Once you’re done with your query, click on ‘Get data to table.’ Your report will look something like this. ?
Another superpower of Supermetrics for Google Sheets is the conditional emailing feature. With this feature, you can trigger an email notification when your products are running low in stock or out of stock.
Let’s say the ‘blue-collar shirt’ is the best-selling item in your store. You may project it’s a good time to reorder a new batch when the shirt only has 50 pieces in the inventory. You can easily set up an email alert to be notified when this happens.
On your Supermetrics sidebar, click on the ‘Schedule’ tab and choose ‘Refresh & email’ daily/weekly/monthly.
Then, check the ‘Conditional emailing’ box.
From here, choose the sheet and cell address you want to trigger the notification for. In this case, we’ll choose ‘Inventory report’ and ‘C2.’ Let’s say you get your blue-collar shirt’s inventory quantity in C2.
Then you can optimize your email subject, so you’ll know what’s happening without opening the email. To do that, scroll up to the email setting and click on the ‘Advanced setting’ tab.
Use these placeholders to customize your subject line.
For example, our setting is ‘There are only #CELLVALUE_Inventory report_C2# blue-collar shirts left!.’
Once you’re done, click on save. And now, whenever your product hits the threshold, you’ll receive an email notification like this. ?
I mean, how cool is that? ?
Calculate time between orders
Depending on what you’re selling, the time between someone’s first and second purchase will be different. Understanding how often your customers buy from you helps create better retargeting, cross-promotion, and upselling campaigns.
Let’s say you’re selling skincare products that people rebuy every three months. You can set up an email campaign or show your customers ads when they’ve hit their 90 days.
“You want to work really hard to get those one-off purchases and then turn them into customers who come back for second and third purchases.”Duane Brown, Founder & Head of Strategy, Take Some Risks
Calculate the ROAS of your paid channels
If you’re growing your online store with paid ads, you’ll want to double down on the channels that bring in sales and stop the ones that don’t work. Instead of going through different platforms to check your performance, you can easily monitor your campaigns with a paid channel mix report.
For example, in this paid channel mix report for Google Data Studio, you’ll see data from Google Ads, LinkedIn Ads, Twitter Ads, Facebook Ads, and Microsoft Ads. With it, you’ll understand:
- The general performance of all your paid channels.
- The evolution of your campaigns over time.
- Your best-performing channels.
Psst! If you’d like to learn more tips about how to use this template to improve your paid performance, check out this article. Or, if you already know your way around Data Studio, feel free to swipe the template.
Get the paid channel mix reporting template for Google Data Studio
Keep track of your key paid metrics such as clicks, costs, conversions, and ROAS.
Analyze customer behavior on your online store
After putting effort into attracting visitors to your website, you probably hope they’ll convert and become customers. I wish things could be that easy.
In reality, when customers visit your store, they may browse through different product pages, add some items to their shopping cart, and then leave. They may come back later, remove some items, or even end up buying a different product.
By using data from Google Analytics, you’ll understand how customers behave in your online store. Take this Google Analytics dashboard for Google Data Studio as an example.
The ‘dashboard’ page provides an overview of your store visitor behavior. Use the ‘user type’ filter to compare new vs. returning customer behavior. You’ll see:
- The key website metrics such as users, new users, bounce rate, average pageviews per session, and average session length.
- The best-performing channels.
- The most popular product pages.
You’ll also find a multi-channel funnels report which shows you how all your marketing channels work together to drive sales. The report shows you:
- Top conversion paths. The popular conversion paths that lead to purchases.
- Assisted conversions. How many sales each channel assisted and completed.
Psst! If you’re looking to monitor your customer journey, feel free to swipe our Google Analytics dashboard template.
Try the Google Analytics overview performance dashboard template
Gain an overview of your website performance, including monthly cohort analysis, top pages, and top events.
Using data from your Shopify store, marketing channels, and Google Analytics helps you grow your business and provide an excellent customer experience.
If you’re ready to take your Shopify analytics to the next level, check out the 14-day free Supermetrics trial.