Shopify Analytics: Optimize your online store with the help of data

In today's world, everyone produces vast amounts of data every day - these data streams can quickly become overwhelming. The question is always which data is actually useful. To not only survive in this sea of data as an online retailer, but also to be successful, you need precise and actionable insights. Shopify Analytics helps you turn the flood of business data into clear, actionable insights and enables you to make informed decisions to maximize your sales, for example.

In this blog post, we'll introduce you to the powerful features and benefits of Shopify Analytics and show you what's new for the tool with the Summer Editions 2024.

What is Shopify Analytics?

Shopify Analytics is an integrated analytics tool designed specifically for Shopify stores to provide comprehensive insights into the performance of your online business. With the Shopify Analytics tool, you get complete insights into your store's activity, visitor behavior, web performance, and transaction data.

This tool is included in most Shopify plans, which means you don't need to do any additional customization or custom coding to access the powerful dashboards and reports. Every Shopify merchant can access the basic analytics and reporting features, with the depth and types of reports varying by plan.

Custom reports are available for Shopify Plus and Advanced Shopify users, allowing for even more detailed analysis. Even in the Basic plan, you already receive useful reports that can give you valuable insights into your store data. 

As part of the Summer Editions 2024, Shopify has comprehensively revised its analytics platform. The new version is faster, more flexible and more intuitive. With real-time data from Shopify QL, pre-built reports and rich visualizations, companies can now make even more informed decisions and optimize their business performance. The dashboard has also been redesigned. Users can now configure the dashboard and display the metrics they want in a clear view. These new features will be available to all Shopify merchants in the coming months, helping to simplify the analytics process and drive business optimization.

What advantages does Shopify Analytics offer?

Shopify Analytics offers some specific advantages over traditional analytics tools such as Google Analytics. One of the most important advantages is the integration of the tool into your Shopify store: The Shopify Analytics tool is directly integrated into the Shopify dashboard, which gives you a seamless user experience. This also means that there are no additional costs for using the tool. Traditional analytics tools such as Google Analytics 4 (GA4), on the other hand, often require setup and integration into your website.

As with any analysis, data quality is also crucial in e-commerce. Shopify Analytics collects data directly from your Shopify store - so it's always accurate and up-to-date. In addition, the tool is specifically tailored to the needs of online retailers and offers reports that directly cover relevant e-commerce metrics such as sales, order volume or conversion rates. GA4 is a general analysis tool and therefore requires more extensive customization to create similar e-commerce reports.

Shopify's in-house analysis tool is also particularly user-friendly - even for users without in-depth technical knowledge. All dashboards and reports are immediately understandable and do not require extensive training. With other store systems based on more complex platforms such as Adobe Commerce (formerly Magento), the learning curve can be much steeper and deeper technical knowledge is often required to collect and analyze similar data.

It is also important that Shopify Analytics works within the Shopify platform. This means that your data always remains within the Shopify ecosystem.

Overall, the Shopify Analytics tool allows you to analyze your store performance more efficiently and securely without the need for in-depth technical knowledge.

How does the connection of a store to the tool work?

In principle, you do not need to take any additional steps to be able to use Shopify Analytics. The connection is made automatically when you set up your Shopify store. As soon as your store is live, Shopify Analytics immediately starts collecting data and displaying it in user-friendly dashboards and reports.

If you need more advanced analytics, Shopify offers advanced features that are included in higher plans such as Advanced Shopify and Shopify Plus. Here you can create custom reports and customize specific metrics according to your needs without the need for additional integration. If you need additional customization or advanced features, you can also integrate one of the many Shopify analytics apps from the Shopify App Store.

What functions does Shopify Analytics offer?

The Shopify Analytics tool offers you many powerful functions that have been specially developed for the needs of online merchants.

The most important functions include detailed reports on sales, order volumes, conversion rates and average order values. These help you to constantly monitor the performance of your store. Essentially, Shopify's analytics and reporting features help you improve your marketing strategy, optimize your store layout and better understand your audience.

Dashboard

Shopify's user-friendly Shopify Analytics Dashboard gives you a quick overview of the most important key performance indicators (KPIs) in your store. The dashboard shows you in seconds how your store is currently performing and where there is potential for optimization.

Detailed reports and analyses

In addition, Shopify Analytics Reports allow you to create customized reports combining various metrics such as sales, sessions and conversion rates to gain deeper insights into your business operations. These features are designed to help you make informed decisions and continuously optimize your business strategy.

These include:

• Sales reports: these help you to find out which items are selling well and which are selling less, so you can adjust stock levels and marketing strategies accordingly.

• Customer reports: Find out who your best customers are. You can also gain insight into their buying habits and return rates to develop an effective customer retention strategy.

• Traffic and acquisition reports: With this data, you can better understand where your visitors are coming from and how they interact with your website. This allows you to optimize your marketing efforts.

• Behavioral reports: Learn how customers interact with your store and identify areas for improvement in navigation.

Live View

The live overview in the dashboard enables merchants to gain and analyze real-time insights into visitor behavior in their Shopify store.

Live View shows on a world map and a globe where the activities in your store originate and provides important key figures on current events.

You can use it to monitor activity and sales in your online store in real time, especially during busy periods such as Black Friday or after new marketing campaigns.

Reports with Shopify Analytics

With Shopify Analytics, all key figures can be displayed as visual tiles in the statistics overview. The dashboard can be freely designed so that key figures can be added or removed at any time.

Shopify Analytics offers a range of standard reports, e.g. Sessions by referrer, Sessions overtime, Top online store searches and many more. These help merchants to gain insights into their business data. The standard reports are divided into the following categories:

• Acquisition

• Orders

• Fraud

• Retail sales

• Financials

• Profit

• Inventory

• Customers

• Marketing

• Behavior

• Sales

The reports available to you here will depend on your chosen Shopify plan.

Shopify also allows users to create custom reports by running specific data queries. This allows them to extract exactly the information they need for their analysis, such as sales by product category, average basket value by advertising channel or customer activity by region. Filters and dimensions can be added to segment the data according to specific criteria. This can help to understand specific target groups or behavior patterns in more detail.

Benefits of store data analysis - these are the insights retailers can gain

Store data analysis offers retailers numerous benefits that help them optimize their business and better serve their customers. Here are some of the key benefits and insights that retailers can gain by analyzing their store data:

• Understanding customer behavior: by analyzing shopping data, retailers can understand which products are being purchased, when and how often. They can identify different customer groups and create targeted marketing campaigns for each group.

• Price optimization: Retailers can adjust prices in real time based on demand, competitor prices and other factors. Analyzing the impact of discounts and promotions helps to develop the most profitable pricing strategies.

• Improving marketing: By analysing customer preferences and behaviour, retailers can develop personalized marketing campaigns. The effectiveness of marketing campaigns can be measured and analyzed to improve future strategies.

• Customer satisfaction and loyalty: Customer ratings and comments can be analyzed to identify and eliminate weaknesses in customer service. Customers can be addressed and supported individually, which increases customer satisfaction and loyalty.

• Improving the shopping experience: Analyzing the checkout abandonment rate can help to identify and eliminate obstacles. Website navigation and user experience can be improved based on customer interactions.

• Product development: Helps to understand which products or services are well received by customers and develop new offers accordingly. As a retailer, you can also understand which products are not selling, monitor them for a while and, if necessary, remove them from your stock completely.

• Resource utilization: By optimizing inventory levels and operating costs, retailers can reduce their expenses.

• Strategic decisions: Identify new market trends and new business opportunities through long-term data analysis. Comparing your own performance with that of your competitors helps you to identify strengths and weaknesses.

The most important key figures: These KPI's belong in your analytics dashboard

By comprehensively analyzing store performance, you can identify strengths and weaknesses, which helps to continuously improve the customer experience and increase the conversion rate. It also allows you to monitor business goals and increase competitiveness through data-based adjustments. We will show you which key figures you should always keep an eye on:

Revenue

Revenue is probably one of the most fundamental and important key figures. After all, it provides information about the store's total revenue over a certain period of time. Sales growth shows the change in sales compared to the same period in the previous year or the previous months.

Conversion rate

The conversion rate indicates how many visitors to the store actually become paying customers. It shows the ratio of the number of purchases to the number of visitors to the store and is an important indicator of the effectiveness of the store in converting visitors into buyers.

Traffic and sources

These metrics show where the store's visitors come from (e.g. organic search, paid advertising, social media) and how much traffic the store generates. This helps to evaluate the effectiveness of different marketing channels and optimize resources accordingly.

Orders and average order value

These metrics indicate the number of orders and their average value. They help to understand how much customers spend on average per purchase and can provide insights into cross-selling and upselling opportunities.

Shopping cart abandonment

The cart abandonment rate shows the percentage of customers who started the checkout process but did not complete the purchase. A high abandonment rate can indicate problems in the checkout process, high shipping costs or other obstacles that prevent customers from making a purchase.

Best-selling products

This metric provides insight into the current needs of customers. These insights can be used to react quickly and actively to trends. Opportunities for cross-selling or upselling can also emerge here.

Returning customers

The number of returning customers shows whether customers are satisfied with the online store, the brand and the product range. A high rate therefore indicates strong customer loyalty and customer retention.

Exkurses: Why not all figures are meaningful

Not all figures are meaningful, as their interpretation and meaning depend heavily on context, data quality and analytical methods. It always makes sense to integrate additional analysis software such as Google Analytics (GA4) in order to gain even deeper, non-product-related insights. For in-depth data analysis, the use of third-party software or specific methods such as cohort analysis is recommended to ensure long-term success in e-commerce. Software such as Mouseflow or Inspectlet can help you to understand how customers move around your online store.

Without context and attribution, isolated figures such as conversion rate can be misleading. It's crucial to understand the reasons behind the numbers and look at the data in context to gain truly valuable insights.

Here are some reasons why numbers can sometimes be misleading or not meaningful:

• Lack of context: Figures without context provide little insight. Sales growth of 10% sounds good, but if the industry is growing by 20% on average, that's not impressive.

• Quality of data: Incorrect, incomplete or outdated data can lead to false conclusions. If data is collected improperly or biased, it may not reflect reality.

• Statistical distortions: Single extreme values can distort the average or other statistical measures. Small samples can also lead to unreliable results that are not representative.

• Scope for interpretation: Figures can be interpreted in different ways. What is a positive development for one analyst could be a warning for another. Biased interpretations and presentations of the data can lead to misleading conclusions.

• Data without a recommendation for action: Figures are only valuable if they lead to concrete actions or decisions. Pure figures without interpretation and context are often of little use. Data that cannot be applied to specific business processes or decision-making is often meaningless.

• Temporal dimension: Individual figures at a specific point in time do not provide any information about trends or developments over time. Time-delayed data can misrepresent current trends or conditions.

Conclusion

Shopify Analytics is an indispensable tool for online merchants who want to effectively monitor their store performance. It helps you filter relevant information and turn it into actionable insights. Its seamless integration with the Shopify dashboard, user-friendly interface and reports tailored specifically for e-commerce make it a powerful solution suitable for both small and large businesses.