Tips for Leveraging Inventory Analysis for Growth on Shopify

Are you a Shopify merchant unsure how to make the most of inventory analysis? In this blog post, we explain how to use inventory analysis on Shopify to drive growth strategies. This content is designed to help merchants who want to achieve both better inventory management and improved sales performance.

StoreHero leverages its proprietary growth platform to support businesses with detailed operations that manual processes cannot handle, and to accelerate business growth through large-scale strategy execution. If you're struggling to increase sales on Shopify, feel free to reach out. =>Download our free service introduction materials here

ABC Analysis

Shopify's ABC analysis report lets you review inventory for both best-selling and slow-moving products. The ABC classifications in Shopify's ABC analysis report are defined as follows:

• Class A: Total inventory value of products that account for 80% of sales.
• Class B: Total inventory value of products that account for 15% of sales.
• Class C: Total inventory value of products that account for 5% of sales.

By converting Class C products to cash as quickly as possible and building up inventory for the best-selling Class A and B products, you can create an inventory mix that makes it easier to capture sales.

Handling Class C Products

Even among Class C products, some have high CVR (Conversion Rate) and Revenue per Session. Products that simply lack exposure should be given more visibility and moved up to Class A or B. Examples of channels and placements where exposure is easy to adjust include:

• Product recommendations
• Cross-sell on cart add
• Sort order on collection pages
• Instagram Shopping
• Google Shopping Ads / Performance Max
• Meta catalog ads
• CRM recommendations

Incidentally, StoreHero enables automatic exposure adjustments across these channels and placements based on rules tied to product sales performance and inventory status. By automating this process, you can execute inventory-driven strategies without spending extra time and effort.

Discounting Class C Products

Of course, many Class C products genuinely aren't selling. If featuring them or increasing product reviews alone isn't enough to move them, it may be necessary to offer discounts to clear the inventory.

However, rather than applying open discounts right away, it's important to first limit discounts in the following ways to avoid damaging brand value:

• Discounts only when purchased as a bundle with another product
• Discounts on the order confirmation page
• Discounts exclusive to newsletter subscribers
• Discounts exclusive to members
• Bulk purchase discounts

StoreHero has implemented a system that automatically identifies the right products and target customers based on rules tied to factors such as remaining inventory days, and delivers discount offers via cross-sells, post-purchase upsells, and automated emails.

Key Considerations for ABC Analysis

Special attention is needed for products with unusual sales patterns, such as limited-edition items, new or restocked products, and sale items. A product may appear in Class A because it was discounted, but without the discount it could actually be a Class C product.

We recommend running ABC analysis not only across all products, but also in a version that excludes products with these kinds of atypical sales patterns.

Cross-Channel Inventory Analysis

Shopify's ABC analysis is an inventory analysis report based solely on sales performance and inventory data within the Shopify store. If you also sell through physical retail stores, Amazon, or other channels beyond Shopify, relying on Shopify's inventory analysis report alone to make inventory decisions can lead to mistakes.

If you operate across multiple sales channels, don't rely only on the ABC analysis from each individual channel — use WMS (Warehouse Management System) data to perform a cross-channel ABC analysis.

Since the products that sell well vary by channel, it's common for a product that doesn't sell on Shopify to sell well in a physical store. In such cases, transferring inventory from Shopify to the physical store location can be an effective action.

By analyzing data such as order status and remaining inventory days across each sales channel, you can make informed decisions about which products to transfer, in what quantities, and between which locations. Automating or semi-automating these decisions enables faster and more responsive inventory management.

Thorough Inventory Operations with StoreHero

StoreHero supports Shopify merchants who are looking to increase sales by helping them execute growth strategies thoroughly and consistently.

For inventory operations as well, we leverage the StoreHero growth platform to utilize performance and inventory data at the individual product and SKU level — enabling automatic optimization of ad exposure, on-site visibility, and pricing adjustments. This makes it possible to achieve the kind of granular operations that manual processes cannot deliver, and to drive continuous growth through large-scale strategy execution.

We are currently offering free store diagnostics. If you have challenges with inventory management or growth strategies in general, please contact us. =>Learn more about our free store diagnostic here

Summary

We've explained how to leverage inventory analysis on Shopify for growth strategies. We hope you can incorporate these approaches into your efforts to achieve both better inventory management and improved sales.

Beyond inventory management, StoreHero supports the entire sales process — including customer acquisition through advertising and social media, CRM, and Shopify store improvements — by implementing automation and workflows for growth strategies, helping businesses build a system of continuous growth from day-to-day operations.

If you're interested in tackling Shopify growth together with StoreHero, please reach out.