Stop guessing, start growing. Discover how Shopify Analytics can help you answer key business questions and measure your success.

Estimated 9 min read

On this page

• The Data Dilemma with Octopus Kids

• What is Shopify Analytics?

• Shopify Analytics’ Core Components

• Connecting Your KPIs to Shopify Analytics

• What are KPIs?

• Conclusion

• Top Three Takeaways

• Next Steps

The Data Dilemma with Octopus Kids

Are you making business decisions based on intuition or limited information? As your Shopify business grows, making data-driven decisions from your store’s valuable insights can unlock new opportunities. This article will introduce you to ways to leverage Shopify Analytics to gain actionable business insights. To illustrate how, let’s get to know Octopus Kids.

Imagine a premium stuffed animal, toy, and clothing business called Octopus Kids. They’ve experienced impressive growth, doubling their sales for two consecutive years, and are beginning to partner with a major retail partner. To evaluate the product line’s potential, the retail partner requested a data visualization of total sales by product, with a breakdown of net items sold in the United States over the last year.

This opportunity immediately creates a challenge. The Octopus Kids team discovers that getting this specific report is a complex, manual process. They have to export thousands of individual sales records and cross-reference them with shipping locations in a spreadsheet, a slow and error-prone task. Any delay or mistake could jeopardize this crucial new partnership, making them feel unprepared and putting future growth at risk.

This is the moment where intuition meets its limits. For a growing business, the key to unlocking the next stage of growth is moving from educated guesses to data-backed confidence.

What is Shopify Analytics?

Shopify Analytics is a powerful data and reporting tool built directly into your Shopify admin. It serves as the central hub for understanding your store’s performance, helping you make informed decisions based on facts rather than gut feelings or assumptions. This tool provides the data-driven clarity and confidence you need to address current challenges and navigate new ones as your business grows.

It empowers merchants like Octopus Kids to make smarter, data-backed decisions regardless of their business model. For direct-to-consumer (DTC) sites, you can analyze who’s buying what and how they found you to tailor your marketing spend. For example, Octopus Kids can discover which social media campaigns are bringing new parents directly to their online store.

For business-to-business (B2B) operations, you can track lead generation, understand order patterns, and optimize repeat purchases. Octopus Kids can monitor wholesale order patterns for their retail partners, enabling them to manage inventory efficiently.

For point-of-sale (POS) systems, you can analyze in-store sales trends, understand customer traffic, and manage inventory effectively between online and physical stores. In their retail locations, Octopus Kids can analyze in-store trends to decide which toys or clothes to stock in-store or feature more prominently online.

Ultimately, by leveraging Shopify Analytics, you can make smarter, faster decisions backed by insight to fuel your business’s growth.

Shopify Analytics’ Core Components

Expand the sections below to explore the core components of Shopify Analytics: Metrics, Dimensions, Reports, and the Dashboard, and how Octopus Kids leverages them to inform their strategy.

Metrics

Metrics are calculations that measure key aspects of your business, such as sales, visitors, or orders. Shopify Analytics calculates these numbers from your store’s raw data. You can use metrics to track performance at a glance, customize your dashboards, and explore detailed reports. Common examples of metrics include:

• Total Sales: This metric measures your store’s total revenue over time, calculated by adding net sales, fees, duties, shipping, and taxes.

• Online Store Conversion Rate: This metric measures how efficiently your online store turns visits into sales, calculated as the number of orders divided by the total number of online store sessions.

• Average Order Value (AOV): This metric measures the average value of all orders (excluding gift cards), calculated by dividing the total value of orders (including taxes, shipping, and discounts before returns) by the total number of orders.

• Returning Customer Rate: This metric measures the percentage of your customer base that has made more than one purchase from your store, calculated as the number of returning customers divided by the total number of customers.

• Sessions: This metric measures the total number of visits to your online store over a specified time period.

How Octopus Kids Uses Metrics: To earn their new retail partner’s business, Octopus Kids would use the total sales and net items sold metrics to pull the data they need to begin customizing a report.

Dimensions

Dimensions are attributes that segment data to help present it more clearly and effectively. They organize and categorize the data being analyzed in a report. Common examples of dimensions include:

• Time: Days, weeks, or months.

• Products: Specific items sold in your store.

• Channels: The different platforms or sources where your sales or traffic originate.

• Places: Locations associated with sales or customer data, such as country or region.

Dimensions allow you to break down metrics (quantitative measurements) into more understandable segments, making it easier to analyze performance and trends in your store’s data.

How Octopus Kids Uses Dimensions: To organize their report for their prospective retail partnership, Octopus Kids would add the Product title dimension to visualize the volume of total sales by product for each plushie, then add two filters: Date range is Last 365 days and Shipping country is United States.

Reports

Reports provide detailed analysis and visualizations of one or more metrics over a specified time period. They enable deeper data exploration, including trends and comparisons. Reports can be customized using various criteria, such as metrics, dimensions, filters, and visualizations. You can create custom reports based on your specific needs, which can include multiple metrics and dimensions for a more thorough analysis.

How Octopus Kids Uses Reports: To fulfill their partner’s request, Octopus Kids would use a total sales by product report. This would show them exactly which of their products are the highest-sellers overall.

Dashboard

The dashboard is a visual summary that provides a quick and convenient snapshot of your store’s key performance indicators. Octopus Kids would check their dashboard first thing each morning for a quick overview of daily sales and website visitors to determine where to dive in to do a deeper analysis.

Connecting Your KPIs to Shopify Analytics

What are KPIs?

If metrics are the raw measurements of your business performance, then Key Performance Indicators (KPIs) are the specific measurements that matter the most to your business goals. A KPI is a carefully chosen metric, often combined with a target, that not only tracks progress toward a strategic objective but also guides your business decisions. They provide valuable insights into customer behavior, marketing effectiveness, and overall business health, empowering you to make informed choices.

A common challenge for merchants is determining which KPI to focus on first. Do you try to improve your marketing effectiveness or examine the low conversion on a new collection you released? Expand the sections below to explore a simple framework to start defining your KPIs.

Step 1: Reflect and Set Your Goal

Your first step is to reflect on a core business goal you currently have. A great goal is specific, measurable, attainable, and time-bound. Next, identify the specific question(s) you need to answer to know if you’re achieving that goal.

Reflect on your business: What is one specific, measurable goal we have for our business in the next 3-6 months? How will we know when our goal is achieved?

Step 2: Explore the Core Components

Once your goal is clear, identify which Shopify Analytics metrics and dimensions you should include in a report to measure progress. Start by exploring the default Shopify reports manual in the Shopify Help Center.

Reflect on your business: What specific Shopify Analytics metrics and dimensions can we include in a report to measure progress?

Step 3: Define Your KPI, Including a Target

Finally, clearly articulate your KPI by combining your goal, the chosen core components, and a specific target.

Defining KPIs with Octopus Kids

Step 1: Octopus Kids Reflects and Sets Their Goal

Octopus Kids’ reflection: They ask themselves: “What is one specific, measurable goal we have for our business in the next 3-6 months? How will we know when our goal is achieved?”

Octopus Kids’ goal: Successfully launch our new retail partnership by generating $100,000 in sales in Q1.

Step 2: Octopus Kids Explores the Core Components

Octopus Kids’ reflection: They ask themselves: “What specific Shopify Analytics metrics and dimensions can we include in a report to track how the sales we are generating from this specific partnership?”

Octopus Kids’ chooses core components: After researching the default Shopify reports manual, they select the total sales metric to generate their report. To only pull the sales from this specific retail partnership, they add the company name dimension, then filter the report by the Q1 date range Jan 1- Mar 31. If desired, they can customize their reports further with additional metrics, dimensions, and filters. Once their report is customized, they would save it and add it to their dashboard for a quick and convenient snapshot of performance.

Step 3: Octopus Kids Defines Their KPI, Including a Target

Goal: Successfully launch our new retail partnership by generating $100,000 USD in sales in Q1.

Core Components:

• Metric: total sales

• Dimension: company name

• Date range: Jan 1- Mar 31

• Target: Generate $100,000 in sales from the new partner by the end of the first quarter.

Conclusion

By transitioning from intuition to insight, you can make more informed, faster decisions that drive your business’s growth. Embrace the power of Shopify Analytics to transform your data into actionable strategies that lead to success.

Top Three Takeaways

• Drive decisions with data – as your business grows, data becomes a necessity, not a luxury.

• Shopify Analytics provides powerful insights – combining metrics, dimensions, and filters into clear reports and dashboards, offering a comprehensive view of your business.

• Define KPIs to give your data purpose – tracking your KPIs in Shopify Analytics helps you confidently navigate your path to success.

Next Steps

Ready to see how it all comes together? Check out the Analytics overview in the Shopify Help Center to watch a tour of its components.

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