Tracking the right Shopify metrics can help grow your store’s revenue faster. Here are the top 8 metrics to focus on:
- Monthly Recurring Revenue (MRR): Measures predictable monthly income. Aim for 5-7% quarterly growth.
- Annual Recurring Revenue (ARR): Tracks yearly trends. Boost it by offering discounts on annual plans.
- Customer Acquisition Cost (CAC) & Customer Lifetime Value (CLV): Maintain a CLV:CAC ratio of 3:1 for profitability.
- Repeat Purchase Rate (RPR): Shows customer loyalty. Top stores achieve 20-40%.
- Total Sales Volume: Monitor gross and net sales to track overall performance.
- Shopify Payments Usage: Higher adoption rates improve conversions by up to 50%.
- Cart Abandonment by Theme: Optimize your store design to reduce cart abandonment.
- Mobile vs Desktop Sales: Mobile accounts for 75% of traffic but lags in conversions. Optimize for speed and usability.
Key takeaway: Stores that track these metrics grow 40% faster and achieve better customer retention. Use Shopify analytics tools to monitor, improve, and make data-driven decisions.
Metric | Purpose | Benchmark/Goal |
---|---|---|
MRR | Predictable monthly income | 5-7% quarterly growth |
ARR | Long-term revenue trends | 15-25% annual growth |
CLV:CAC Ratio | Profitability per customer | 3:1 |
Repeat Purchase Rate | Customer loyalty | 20-40% |
Shopify Payments Usage | Conversion optimization | 50% higher conversions |
Want to grow faster? Start with MRR, CLV, and RPR to focus on recurring revenue and customer retention.
What Metrics Matter In The Shopify Analytics Dashboard
Basic Revenue Metrics
Keep an eye on these core metrics to understand your financial performance:
MRR (Monthly Recurring Revenue) and ARR (Annual Recurring Revenue) are essential for tracking revenue. To calculate:
- MRR = (Monthly subscribers × Average subscription value)
OR - MRR = (Repeat customers × AOV) + (New customers × First-time AOV)
Once you have MRR, multiply it by 12 to get ARR.
These metrics provide the baseline for analyzing customer behavior, which we’ll explore in later sections.
For high-growth businesses, a 5-7% quarterly increase in MRR is typical. On the flip side, a decline suggests it’s time to revisit your strategy. When calculating, exclude one-time purchases and factor in churn to get accurate numbers.
Here’s how these metrics can influence decision-making:
- ARR insights for negotiations: One brand used their $480K ARR to secure better payment terms with suppliers [5].
- Budget alignment: A 20% ARR growth often supports a 15% increase in marketing spend [1][4].
These numbers aren’t just for tracking – they can guide smarter business decisions.
Customer Success Metrics
Metrics like Customer Acquisition Cost (CAC) and Customer Lifetime Value (CLV) are key indicators of how scalable your revenue is – building on the MRR/ARR principles we discussed earlier.
These two metrics are essential for understanding profitability per customer. A good rule of thumb is to aim for a CLV:CAC ratio of 3:1 [1][7]. Here’s how to calculate them:
- CAC: Total marketing and sales expenses ÷ Number of new customers acquired
- CLV: Average purchase value × Annual purchases × Length of customer relationship (in years)
For example, if you spend $10,000 on marketing and acquire 500 customers, your CAC is $20 per customer. These numbers directly connect to MRR/ARR, emphasizing how customer behavior influences recurring revenue.
A Success Story in Action
"Through referral program optimization, we reduced CAC by 40% while increasing CLV by 22% through subscription bundles." – Aloha, as featured in Shopify Masters [1]
Retention Strategies That Deliver Results
Keeping customers is just as important as acquiring them. Here are some proven strategies:
- Loyalty programs: These can increase retention rates by 27%, while tools like Shop Pay improve checkout conversions [2][7].
- Cohort analysis: Use Shopify’s cohort reports to spot churn trends early and take action.
- Win-back campaigns: These campaigns have shown a 25% success rate in re-engaging lost customers [4].
For a deeper dive into customer behavior, connect Google Analytics to gain insights across multiple channels [3][5].
Shopify-Specific Metrics
Shopify’s built-in analytics offer metrics tailored to its platform, giving store owners insights that go beyond standard e-commerce benchmarks. These metrics can help you better understand your store’s performance and pinpoint areas to boost revenue.
Payment Processing Performance
Shopify Payments Usage is a key metric for evaluating how smoothly transactions are processed. It can help you spot issues in your payment system that might be costing you sales.
Traffic Source Attribution
Shopify’s "Sessions by Traffic Source" report shows how each channel contributes to your revenue. This data can guide your marketing budget decisions. For example, if Pinterest traffic accounts for 40% of your conversions, you might want to allocate more funds to that channel [3][5].
Mobile Commerce Analytics
The Mobile vs Desktop Sales metric compares purchasing behaviors across devices, revealing trends that could impact your revenue.
"Analysis of 400 stores shows mobile-optimized experiences drive 58-63% higher engagement" – Sarah Williamson, CXO at Retail Insights Institute
Theme Performance Metrics
Shopify tracks Cart Abandonment by Theme Version, offering insights into how your store’s design affects sales. For example, one merchant reduced cart abandonment by 22% after improving the visibility of their shipping calculator [4][5].
Inventory Insights
Shopify’s inventory metrics ensure your products are consistently available, helping you maintain customer trust and satisfaction:
- Month-End Inventory Snapshot: Helps avoid stockouts.
- Average Inventory Sold/Day: Guides restocking efforts.
- Sales Attribution by Campaign: Evaluates the ROI of promotions.
Technical Performance Indicators
By keeping an eye on Shopify Payments decline rates, merchants can address processing issues. One store owner, for instance, cut payment failures by 38% after resolving these problems [context].
These Shopify-specific metrics play a crucial role in refining your sales funnel, which we’ll dive into next.
1. Monthly Recurring Revenue (MRR)
Let’s dive into how Shopify users can effectively implement strategies to grow their Monthly Recurring Revenue (MRR).
Industry Benchmarks
The 2024 Shopify Economic Report highlights key growth benchmarks for stores:
Store Type | MRR Growth Benchmarks (2024 Shopify Data) |
---|---|
Startups | 10-15% monthly |
Established Brands | 5-8% monthly |
High Performers ($100k+ MRR) | 26% faster growth than peers |
These numbers align closely with the customer lifetime value (CLV) strategies discussed in Customer Success Metrics.
Tracking MRR in Shopify
For stores without subscription models, focus on repeat customer spending trends using Shopify Reports. If you run a subscription-based store, Shopify’s Subscription Analytics and tools like Recharge can provide deeper insights into your MRR growth [3][5].
Real-World Example
Beard & Blade saw a 40% boost in MRR after leveraging Shopify’s subscription features and optimizing their Shop Pay checkout process [2][4].
Keeping track of MRR is also essential for forecasting annual recurring revenue (ARR), which we’ll cover in the next section.
2. Annual Recurring Revenue (ARR)
Annual Recurring Revenue (ARR) is a key metric for understanding yearly revenue trends and ensuring financial stability. It builds on Monthly Recurring Revenue (MRR) by offering a longer-term perspective, helping you refine pricing and retention strategies to maintain steady growth.
Calculating ARR for Different Store Types
For Shopify stores, the method for calculating ARR depends on the business model. Here’s how it breaks down:
Revenue Type | How to Calculate |
---|---|
Subscription-Only | Average Monthly Recurring Revenue × 12 |
Hybrid Model | Subscription Revenue Only × 12 |
Multi-Plan | Annual Plan Revenue + (Monthly Plan Revenue × 12) |
Industry Growth Benchmarks
Shopify data highlights varying growth rates depending on the business model:
- Subscription boxes: Typically see 20-30% growth annually [7].
- Hybrid models: Experience a 15-25% yearly increase [10].
- Top-performing businesses: Surpass 25% annual growth by focusing on optimizing annual plans [3].
Strategies to Boost ARR
If you’re aiming to grow your ARR, consider these approaches:
- Offer 10-15% discounts on annual subscriptions through Shopify Subscriptions.
- Use customer segmentation based on Customer Lifetime Value (CLV) to target high-value users.
- Set up automated renewal reminders using Shopify Flow to reduce churn.
Monitoring ARR Performance
Shopify’s analytics tools make it easy to keep track of ARR metrics. Here are the key reports to use:
- Finance Reports > Recurring Revenue: Spot monthly revenue patterns.
- Sales by Customer Report: Identify trends among repeat buyers.
- Subscription Analytics (available on Shopify Plus): Review renewal rates for deeper insights [3][5].
3. Customer Costs vs Lifetime Value
Understanding the relationship between customer acquisition costs (CAC) and customer lifetime value (CLV) is essential for boosting revenue. These metrics offer insights into how efficiently you’re acquiring customers and how profitable they are over time – key drivers for long-term growth.
Calculating Key Metrics
Here’s how to calculate these important metrics:
Metric | Formula | Shopify Tools |
---|---|---|
CAC | Marketing & Sales Costs ÷ New Customers | Marketing Attribution Reports |
CLV | Average Order Value × Purchase Frequency × Customer Lifespan | Customer Reports + Analytics |
By increasing CLV, you can directly enhance recurring revenue, aligning with the MRR growth strategies discussed earlier.
Factors That Influence Measurement
Several elements can affect the accuracy of these calculations:
- Differences in acquisition costs between mobile and desktop users
- Using at least a 12-month period to assess CLV
- Including customer support expenses in CAC calculations
Strategies to Improve Metrics
Here are some practical ways to optimize CAC and CLV:
- Lower CAC: Implement Shop Pay, which can improve conversion rates by up to 50% [2].
- Increase CLV: Use segmented email campaigns to encourage repeat purchases.
- Enhance Mobile Performance: Speed up your mobile site to potentially reduce CAC by 20-35% [3][6].
These improvements directly support MRR and ARR growth by making customer acquisition more efficient and keeping customers engaged longer.
4. Repeat Purchase Rate
Repeat Purchase Rate (RPR) shows how loyal your customers are by tracking how many come back to buy again. It’s calculated as: (Returning Customers ÷ Total Customers) × 100. The best-performing stores usually see an RPR between 20% and 40% [1]. This number is key for calculating Customer Lifetime Value (CLV) and helps ensure Monthly Recurring Revenue (MRR) stays steady with consistent repeat sales.
How to Improve Your RPR
Here are some strategies that have worked for others:
-
Automated Post-Purchase Emails
GlowLab, a beauty brand, boosted their RPR by 35% using automated emails after purchases. These emails included personalized product recommendations [4]. -
Customer Segmentation
Breaking down your customers into groups can reveal insights. For example: -
Loyalty Programs
Tiered loyalty programs can make a big difference. Stores with such programs often see a 27% jump in RPR on average [7].
Best Practices for Tracking RPR
To track your RPR effectively:
- Leave out refunded orders to avoid skewed data.
- Analyze by acquisition channels for better insights.
- Use tools like Shopify Analytics: go to Customers > Returning customers [3].
Improving RPR can have a ripple effect, boosting your Total Sales Volume – a topic we’ll dive into next.
5. Total Sales Volume
Total Sales Volume gives you a clear picture of your store’s overall sales performance. It’s an important metric that connects directly to MRR/ARR growth and ties into customer retention strategies.
Breaking Down Sales Volume
Keep an eye on both gross sales (total revenue) and net sales (revenue after returns). If the gap between these numbers exceeds 5%, it could point to issues with your products or fulfillment process [6].
Performance Benchmarks to Watch
Successful Shopify stores often aim for:
- 15-25% quarterly sales growth
- Less than 5% month-over-month decline
- 2-3x annual growth for scaling businesses [8][11]
Analyzing Sales Channels
Shopify Analytics offers a detailed view of how your sales break down across different channels. Use this data to fine-tune your approach on each platform.
Boosting Sales Volume
- Speed Up Mobile Checkout: Cutting load times by just 0.5 seconds can boost mobile conversions by 20% [3][6].
Accounting for Seasonal Trends
Use monthly, yearly, and 90-day averages to filter out seasonal fluctuations and get a clearer view of your performance.
Understanding these patterns lays the groundwork for evaluating payment methods, which we’ll dive into next.
6. Shopify Payments Usage
Total sales volume is a great indicator of overall performance, but the payment methods your store adopts can directly impact how efficiently you capture revenue. Tracking how often Shopify Payments is used helps measure processing efficiency and the potential to improve revenue. This metric complements MRR/ARR growth by reducing friction in the payment process. Recent data highlights that stores using Shopify Payments effectively experience noticeable boosts to their profitability.
Current Benchmark Performance
As of Q3 2024, Shopify Payments usage across the platform hit 62% [9], with top-performing stores surpassing 80% adoption. Here’s why this matters:
- Shop Pay users convert 50% more often than those using standard checkouts [2]
- Mobile conversions improve by 15-20% [3]
- Checkout forms have 60% fewer fields [3]
- Chargebacks decrease by 18% [3]
- Cross-border conversions increase by 30-40% [9]
- Streamlined payments boost customer lifetime value (CLV)
- Transactions via Shop Pay average 18% higher order values [3]
- Shop Pay users drive 42% higher GMV growth year-over-year [9]
Tracking Implementation
You can easily track your Shopify Payments usage with this formula:
Usage Rate = (Shopify Payments Orders ÷ Total Orders) × 100
For example, if your store processes 620 Shopify Payments orders out of 1,000 total orders, your usage rate is 62% [9][3].
Optimization Strategies
Looking to increase Shopify Payments adoption and its impact on your revenue? Here are some actionable tips:
- Enable Shop Pay Accelerated Checkout to potentially boost conversions by 50% [2]
- Offer geo-targeted payment options to cater to international buyers
- Review device-specific conversion rates and analyze abandoned carts by payment method
"Shopify’s Q3 2024 analysis confirms Shop Pay users show 50% higher conversion rates versus guest checkouts." [2]
7. Cart Abandonment by Theme
The design of your store’s theme plays a big role in cart abandonment and revenue. Research shows that 44% of shoppers leave their carts behind due to poor navigation and complicated checkouts [2][4]. This ties back to Shopify’s theme version tracking, which can help identify areas for improvement and boost metrics like MRR.
Tracking Theme-Specific Abandonment
Shopify’s tools like ‘Online Store Sessions by Device Type’ and ‘Checkout Behavior Analysis’ [3][5] can help you understand how your theme impacts cart completion rates across different devices.
Here are some key factors to watch:
- Mobile responsiveness: Over half (53%) of mobile users abandon carts on non-optimized themes [2][4].
- Checkout page efficiency: Streamlined designs can cut abandonment by 12% [2][4].
- Page load speed: Themes that take more than 2 seconds to load on mobile see a 37% increase in abandonment [2][4].
Theme Elements That Impact Abandonment
Theme Component | Impact on Abandonment | Optimization Result |
---|---|---|
Checkout Layout | Causes friction | 12% fewer drop-offs with a simpler design |
Mobile Responsiveness | Crucial for user experience | 50% better results with Shop Pay integration |
Trust Indicators | Boosts conversions | 18% lift with well-placed trust badges |
Performance Optimization Strategies
Focusing on mobile performance often yields the best results. Tools like Hotjar and Lucky Orange can give you insights into where users face difficulties with your theme’s navigation [4]. These tools provide heatmaps and session recordings, helping you pinpoint problem areas.
"Strategic theme optimization directly impacts CLV:CAC ratios by reducing acquisition costs through improved conversions."
Regular Theme Performance Monitoring
- Monthly: Compare theme versions using Sales Attribution.
- Quarterly: Assess how seasonal trends affect performance.
- After updates: Check metrics within 48 hours of any theme changes.
8. Mobile vs Desktop Sales
The difference in performance between mobile and desktop directly influences key revenue metrics like MRR (Monthly Recurring Revenue) and CLV (Customer Lifetime Value). According to Shopify data, desktop conversions average 4.6%, while mobile conversions lag at 3.1% [5]. This gap has a direct impact on the growth potential of these metrics.
Device-Specific Performance Metrics
While mobile accounts for a massive 75% of ecommerce traffic, its conversion rates still fall short when compared to desktop [3][5]. This disparity presents a clear opportunity to increase revenue through optimization:
Metric | Mobile | Desktop |
---|---|---|
Average Conversion Rate | 3.1% | 4.6% |
Page Load Impact | 2s target | 3s target |
Cart Completion | 50% with Shop Pay | 65% standard |
Key Performance Indicators
To track and analyze mobile versus desktop performance, Shopify Analytics provides valuable tools like "Store sessions by device type." Combining this with conversion data offers actionable insights [6][3]. For instance, if mobile generates $15,000 from 3,000 sessions and desktop produces $20,000 from 2,000 sessions, the mobile-to-desktop revenue ratio of 75% highlights the untapped potential for mobile optimization. Addressing these gaps can also improve metrics such as the Repeat Purchase Rate.
Technical Optimization Impact
Building on the theme performance analysis discussed in Section 7, technical improvements are key to closing the mobile-desktop performance gap. Factors that significantly influence mobile sales include:
- Page load speed: Sites with load times under 2 seconds see a 15% increase in mobile conversions [2].
- Navigation design: Sticky navigation bars outperform traditional hamburger menus, which reduce mobile conversions by 22% [4].
- Shop Pay integration: Simplifies checkout and boosts cart completion rates.
Sales Funnel Metrics
Analyzing your Shopify store’s sales funnel metrics can help pinpoint where customers drop off and highlight areas for improvement. These insights build upon theme performance (Section 7) and payment efficiency (Section 6) to identify hurdles in the conversion process. On average, the ecommerce cart abandonment rate is 69% across industries [2].
Key Funnel Stage Performance
Stage | Benchmark | Improvement Opportunities |
---|---|---|
Product Page Views | 2-3% conversion rate | Boost by 36% with benefit-driven copy |
Add to Cart | 31% completion rate | Increase by 15-20% using exit popups |
Checkout Initiation | 50% standard rate | Improve by 50% with Shop Pay enabled |
Purchase Completion | 10-15% recovery rate | Raise AOV by 12% with thank-you upsells |
Key Conversion Points
Shopify Analytics shows that stores using Shop Pay often achieve conversion rates of 5-8% [2], outperforming industry averages. This success comes from addressing critical metrics at each funnel stage:
- Traffic Quality: Use Shopify’s traffic source reports to compare high-converting channels against those with high bounce rates [3]. This helps you focus on the most effective sources.
- Product Engagement: Optimizing product pages is essential. Highlighting clear unique selling points can drive conversions up by 36% [4]. Keep an eye on product page exit rates to spot issues like unclear pricing or unconvincing content.
- Checkout Performance: Monitor checkout completion rates to identify friction points, especially on mobile devices. Small adjustments here can have a big impact.
Advanced Funnel Analysis
To dig deeper into your funnel’s performance, focus on:
- Source Attribution: Identify which channels deliver not just traffic, but high-value customers.
"Measure return on profitability, not just ad spend when evaluating funnel stages" [1]
As discussed in Customer Costs vs Lifetime Value (Section 3), funnel optimization should align with your CLV:CAC ratios. Post-purchase surveys are a great way to uncover hidden conversion barriers [2]. Combining this qualitative feedback with hard data often reveals surprising insights.
For steady growth, track monthly trends in conversion rates by traffic source. This can uncover seasonal shifts in customer behavior, allowing you to fine-tune your strategy. Pair this with MRR tracking to better understand how behavior impacts recurring revenue.
Store Financial Health
To complement revenue metrics like MRR/ARR, these financial health indicators focus on areas that directly support revenue growth. Shopify’s platform data highlights that successful stores consistently hit specific benchmarks across key financial metrics.
Core Financial Ratios
Metric | Healthy Range | Warning Signs |
---|---|---|
Gross Profit Margin | Over 50% | Below 30% |
Operating Expense Ratio | 30-40% | Over 60% |
Inventory Turnover | 4-6x annually | Below 2x or above 10x |
Shopify’s data shows that stores with steady growth maintain gross margins above 50%, aligning with the platform’s performance metrics from Q3 2024 [8]. This serves as a solid benchmark for running a sustainable business.
Inventory Management Matters
Good inventory management strikes the right balance between stock availability and carrying costs. Shopify’s B2B segment, for instance, saw a 145% GMV increase by optimizing inventory workflows [9].
Key inventory metrics to watch include:
- Stock-to-Sales Ratio: Compares inventory value to sales rate.
- Days Inventory Outstanding: Tracks how long inventory sits before being sold.
- Seasonal Demand Patterns: Helps plan stock levels during peak and low seasons.
Payment Processing and Cash Flow
Using Shopify Payments can improve cash flow by offering quicker settlements and reducing transaction fees.
Spotting Financial Red Flags
Pay attention to these warning signs:
- Operating expense ratios exceeding 60% of revenue.
- Negative cash flow persisting for over three months.
- Customer acquisition costs surpassing lifetime value estimates.
Shopify Analytics makes it easier to catch these issues early. Its built-in financial reporting tools provide real-time insights into these critical metrics [3]. Staying on top of these numbers can prevent problems before they affect your bottom line.
Analytics Support Services
Metrics like MRR and cart abandonment can highlight growth opportunities, but setting up accurate tracking often requires technical know-how. E-commerce Dev Group provides analytics solutions tailored for Shopify users, offering store owners a clear view of their MRR, ARR, and CLV metrics.
Custom Dashboard Implementation
E-commerce Dev Group customizes Shopify dashboards to spotlight key revenue indicators. They integrate tools like Google Analytics 4 with Shopify’s built-in reporting, creating a unified tracking system across all channels [3]. For enterprise clients, this setup has cut manual reporting time by 65% and sped up decision-making [2][4]. These dashboards are designed to track critical metrics like MRR, ARR, and CLV.
Advanced Tracking Solutions
Their team implements specialized tracking systems that focus on high-impact revenue metrics:
Tracking Focus | Implementation Details | Typical Impact |
---|---|---|
Payment Analytics | Monitoring Shop Pay performance | 15-20% improvement in checkout optimization |
Data Accuracy and Validation
To ensure revenue data is accurate and trustworthy, they employ:
- Automated checks to match data with bank statements [5]
- Custom fraud detection rules
- Order tracking through APIs to avoid duplicate entries [3]
Real-Time Performance Monitoring
For Shopify Plus merchants, they use API integrations to enable real-time MRR forecasting. This includes creating custom wholesale metrics portals and setting up automated KPI alerts with Flow triggers [7]. One merchant reported a 58% boost in MRR thanks to these advanced tracking tools.
Their approach blends technical expertise with hands-on training, ensuring store owners can confidently use these tools. This has led to an average 18.5% improvement in conversion rates across their clients [2].
Conclusion
Tracking the right metrics is key to driving growth. Stores focusing on Monthly Recurring Revenue (MRR) see revenue expand 40% faster [5]. Three key metrics stand out as essential:
Metric | Purpose | Industry Benchmark |
---|---|---|
Monthly Recurring Revenue | Measures predictable income | 40% faster growth [5] |
Customer Lifetime Value | Assesses customer profitability | Guides retention strategies [1] |
Repeat Purchase Rate | Reflects brand loyalty | 30% target for 3x profitability [7] |
These metrics are interconnected: stable MRR supports better Customer Lifetime Value (CLV) strategies, which in turn encourage repeat purchases.
Using Shopify’s built-in analytics tools makes it easier to combine platform-specific insights, like Shop Pay adoption rates, with broader financial data. This approach gives merchants a clear edge.
For consistent growth, merchants should focus on:
- MRR forecasting (see Section 1)
- Cart recovery strategies tied to themes (see Section 7)
- Shop Pay integration (see Section 6)
Top-performing stores monitor MRR, CLV, and Repeat Purchase Rate (RPR) three times more often than the average store [7]. Additionally, premium themes with integrated payment options cut cart abandonment by 22% and improve conversions [2][5].
As mobile optimization continues to close conversion gaps (see Section 8), AI-driven forecasting tools are already making an impact. Shopify stores using AI-based recommendations have seen a 22% boost in repeat purchase rates [4].
FAQs
What is the metric system in Shopify?
Shopify’s metric system is designed to monitor key customer journeys and payment processes that impact revenue. For example, stores using Shop Pay experience 50% higher conversion rates compared to standard checkouts [2]. These metrics are crucial for tracking growth through tools like MRR (explained in Section 1) and CLV (covered in Section 3).
Traffic Source | Description |
---|---|
Geographic Data | Identifies customer location trends |
Session Attribution | Analyzes how visitors reach your store |
"Instead of measuring return on ad spend alone, we track MRR growth and CLV ratios that actually sustain long-term growth."
Key elements of Shopify’s metric system include:
- Session Attribution: Helps you understand how visitors discover your store.
- Geographic Data: Provides insights into where your customers are located.
To make the most of these metrics, consider these tips:
- Use UTM parameters to track campaign performance.
- Analyze geographic sales trends on a monthly basis.
For more detailed guidance, check out sections on Shopify Payments optimization (Section 6) and mobile performance strategies (Section 8).