Shopify just released their Cohort Analysis report in their analytics section in late October 2022.
Here are the need to know definitions of Shopify Cohort Analysis and how it can help you grow.
What is a Cohort?
Let’s start with the basics. A cohort is a pre-defined group of people that have a common trait. In this case, we’re talking about time-based cohorts, which are grouped together by the month in which they made their first purchase with your store.
Example: Your January 2022 cohort is made up of all the customers you acquired in January 2022, who made their first ever purchase with your store. They will always remain in your January 2022 cohort.
Other examples of ways Shopify cohorts can be grouped:
- Cohorts can also be customers who bought a certain product in their first order.
- Customers who came from a specific acquisition channel.
- Customers who are tagged with a customer tag, order tag, product tag.
- Customers from a location - city, state, province, country.
- Customers who used discount codes or a specific discount code like “hello2023”
- Customers who purchased with a specific payment type.
The list goes on and on… and these dimensions that make up your customers in a cohort can also be combined together.
You are tracking groups of people and analyzing their behavior across a bunch of different stories (analyses). Do these customers buy more or less from your brand?
What is Shopify Cohort Analysis?
Cohort Analysis is a visual chart for plotting and comparing the progression of specific metrics for each cohort over time. Each row represents a monthly cohort of customers (like our January 2022 example).
Each column represents a datapoint following the cohort’s creation. Some analyses might be looking at each Month following the cohort's creation, some might be counting orders per customer. The value in the cell is the analysis you are computing – could be Repurchase Rate, Customers Returning Rate, Number of Orders made each Cohort, Days since First Purchase, Customer Lifetime Value (LTV), Average Order Value (AOV), Discounts, Refunds, etc.
A cohort is a visualization, the analysis is in the cells. Shopify has published a few analyses in the cohort format in their Shopify Cohort Analysis, and while we can’t speak to it, we can tell you what Peel’s suite of Cohort Analysis encompasses.
Peel, a Shopify Partner, connects to Shopify stores via the API and pulls data from your Shopify store(s), Subscription platforms, and Amazon Seller account to build a detailed suite of cohort analysis to answer every angle about your customers – what they buy, how much they buy, if they repurchase and when they come back, how much they spend on each order, etc.
Types of Cohort Analysis in Peel
There are 3 main categories of Cohort Analysis in Peel:
- Retention Cohort Analysis
- Revenue Cohort Analysis
- Subscription Cohort Analysis
Cohort Retention Metrics give you the full story of how often your customers are coming back to make purchases. This can help you understand what’s most effective in making them come back. Did a certain cohort have a higher Repurchase Rate? Dig into what caused that. Could be products, discount codes, certain campaigns, etc.
The best part is you can quickly segment each Cohort Retention metric by dozens of values in Peel to zoom in on what’s making your customers come back.
Here’s the full list of Cohort Retention Metrics:
- Cohort Customers per Count Of Days With Order
- Cohort Customers per Number Of Orders
- Customers Returning Rate
- Days since First Order
- Orders per Customer
- Orders per Month
- Repeat Orders Rate
- Repurchase Rate
Check out the definitions here.
Cohort Revenue Metrics show you how your customers are spending over time. This helps you understand how your monthly cohorts spend and continue to spend with your store over time. This includes core growth metrics like Customer Lifetime Value (LTV) and Average Order Value (AOV). We have so many revenue analyses because each merchant uses different revenue metrics (total sales, net sales or gross sales) to analyze their business and, by customer request, we support all those forms of revenue analysis.
Here’s the full list of Cohort Revenue Metrics:
- Cohort AOV (Gross)
- Cohort AOV (Net)
- Cohort AOV per Month
- Cohort AOV* per Month
- Customer Lifetime Value Growth Rate
- Discounts By Cohort
- Gross Margin Amount
- Gross Margin Rate
- Gross Sales By Cohort
- Gross Sales By Cohort - Non Cumulative
- Gross Sales By Cohort per Customer
- LTV By Cohort
- LTV By Customer
- Lifetime Revenue By Cohort
- Lifetime Revenue By Customer
- Net Sales Per Customer (non Cumulative)
- Net Sales per Cohort
- Net Sales per Customer
- Refunds By Cohort
Check out the definitions here.
Subscription Metrics help you understand the behavior of your subscriptions and subscribers, if you have a subscription option for your customers. This helps you understand how and when customers are converting from One Time Purchasers (OTP) to Subscribers and so much more. This helps you refine your marketing strategy and subscription funnel to convert more customers to subscribers at a faster rate.
Here’s the breakdown of all the Subscription Metrics:
- Active Subscribers per Cohort
- Active Subscriptions per Cohort
- Cumulative MRR per Subscriber
- Cumulative MRR per Subscription
- Earned Profit per Subscriber
- Earned Profit per Subscribers Cohort
- Earned Profit per Subscription
- Earned Profit per Subscriptions Cohort
- LTV per Subscriber
- LTV per Subscriber Cohort
- LTV per Subscription
- LTV per Subscription Cohort
- MRR per Active Subscriber
- MRR per Active Subscription
- MRR per Subscribers Cohort
- MRR per Subscriptions Cohort
Check out the detailed definitions here.
As Shopify Cohort Analysis release has stated – “Find out your most loyal group of customers with the new cohort analysis.” but really there is so much more you can see on top of that. Depending on the metric – whether you are looking at revenue, orders, customer counts, subscription counts, subscriber counts, , you’ll be able to analyze the customers you acquired each month (week or quarter). Additionally you’ll be able to layer details about those customers — who bought a particular product, came from a specific location (city, state, province, country), acquired through a specific marketing channel, used a discount code, tagged with a customer tag, order tag or product tag, used a specific line item order type and to learn the most you can about your customers.
Check out these Twitter threads explaining cohorts & seeing them in action.
Peel has the deepest set of Cohort Analysis on the market. Get started with a free 7-day trail and get Shopify Cohort Analysis and more with Peel.