StoreHero is a new e-commerce and marketing analytics tool that helps e-commerce store owners create clarity from chaos and grow their stores profitably.
Take control of your costs and more importantly profits with StoreHero! Our innovative tool makes it easy to manage costs and boost your e-commerce success! The company was founded by two industry experts who wished they had access to such a tool themselves. StoreHero’s mission is to provide store owners with the insights and tools they need to make informed decisions about their business and drive growth in the confidence of doing so profitably.
What are the Key Features of StoreHero?
With Storehero, e-commerce businesses can:
- Analyse profitability in real-time with PROAS, rather than waiting until the end of the month to speak with an accountant, enabling quicker decision-making. With StoreHero you can generate real-time profit metrics on an order and store level taking into account COGS, variable costs, transaction fees, discounts, and shipping!
- Benchmark KPI performance against other stores per industry to compare and identify areas for improvement.
- View all e-commerce and marketing analytics data in a single source of truth, a unified dashboard, rather than jumping between multiple platforms.
- Get a full view of the purchase funnel highlighting potential problem areas.
- Take action based on data-driven insights and recommendations from Storehero to optimize their e-commerce strategy and drive growth.
- Improve attribution by getting a more accurate understanding of the touchpoints that contribute to sales and conversions.
- Enable store owners to get a firmer understanding of their unit economics and how they can use this knowledge to grow their business.
PROAS… What is it and why do you need to understand it?
It’s a common occurrence for e-commerce brands to misunderstand the importance and relevance of ROAS (Return on Ad Spend) and PROAS (Profit Return on Ad Spend). Without a clear understanding of these metrics, businesses may risk overspending on unprofitable campaigns. On the other hand, a lack of understanding of unit economics may prevent businesses from identifying opportunities to increase ad spend in a profitable manner. It is crucial for businesses to have a clear understanding of these concepts to ensure the success and growth of their advertising efforts.
Storehero has introduced a new profit return on ad spend metric called PROAS, which is designed to provide a more comprehensive and accurate measure of ad performance for e-commerce businesses. The traditional ROAS metric (return on ad spend) is widely used in the industry, but it has limitations when it comes to accurately reflecting the true return on investment for an ad campaign. This is because ROAS ignores many of the fixed and variable costs that go into an order, such as product costs, fulfillment costs, and customer service costs.
PROAS, on the other hand, takes these additional costs into account and provides a more accurate reflection of the real ROI on ad spend. This can be particularly useful in a world where ad costs are rising and it’s becoming more important than ever to optimise ad spend to maximise profitability. By using PROAS as a metric, ecommerce businesses can get a better understanding of the true impact of their ad campaigns on their bottom line and make more informed decisions about their marketing strategy.
Does StoreHero work for my business?
Storehero has integrations with leading ecommerce platforms and marketing tools, including Shopify, WooCommerce, Magento, Klaviyo, Meta, Google, and TikTok. These partnerships allow Storehero users to access and analyse data from a store’s sales and customer activity, as well as track and analyse the effectiveness of social media and marketing efforts. This data can be viewed in real-time on Storehero, providing valuable insights and recommendations for optimisation of performance and profit.
These integrations can help Storehero users make more informed decisions about their e-commerce and marketing strategy and allocate ad spend more effectively, ultimately helping their business grow and succeed.
How can you get in touch?
If you’re interested in seeing how Storehero can help your e-commerce business grow, we encourage you to book a demo now and see for yourself the benefits of using us to enhance and fully understand your e-commerce and marketing operations.
Our team is available to walk you through the features and functionality of Storehero and show you how it can help you make better data-driven decisions about your e-commerce and marketing strategy. And, as a special offer, we’re currently offering a free 30-day trial of Storehero, so you can try out the app and see how it can help your business before committing to a subscription.
At Storehero, we believe that having clarity instead of chaos is key to ensuring that your business is growing profitably. With the insights and recommendations provided by our tool, you’ll be able to make more informed decisions about your e-commerce and marketing efforts and optimise your strategy to drive growth and profitability. Book your demo today and see how Storehero can help your business succeed!
Get started with a 14 day trial
At StoreHero, we’re building the future of e-commerce. Get a demo with our expert team and see how StoreHero can supercharge your growth.
Introduction
Scaling an ecommerce business can be a complex journey filled with unique challenges. Gary, the owner of a Dublin-based women’s apparel brand, experienced firsthand the obstacles of scaling his business since its inception in 2020. As Gary’s business flourished, he found himself grappling with maintaining a high return on ad spend (ROAS) and making data-driven decisions to continue growing his business.
Like many ecommerce businesses, the cost of advertising on Facebook and Google had become much more expensive, making it increasingly difficult for Gary to make a profit. He wanted to focus on running his business without constantly worrying about changing algorithms from Facebook and Google. Gary frequently came across the importance of being data-driven in the online world, but as he was focused on running the business, he didn’t have the expertise or the time to dive in and truly understand the data.
Running an ecommerce company today means navigating 10+ platforms that are all working for the same business but are operating in siloes. Gary found it difficult to get a single source of truth from these platforms. This challenge was compounded by the fact that he didn’t have the resources to hire a data analyst, and he admitted that he was mainly making decisions based on gut feeling rather than data. For financial advice, Gary relied on his accountant, who unfortunately lacked expertise in ecommerce, resulting in a limited understanding of key ecommerce and marketing metrics. This oversight turned out to be a significant problem in retrospect.
In January 2023, Gary turned to StoreHero, a powerful tool specifically designed for ecommerce companies. Over the course of our collaboration, Gary not only gained a comprehensive understanding of his business’s unit economics but also experienced phenomenal growth, increasing his net profit by 324% and sales by 39% compared to March 2022. This case study delves into the challenges Gary faced throughout his ecommerce journey, the transformative solutions StoreHero provided, and the valuable insights he gained to propel his business to new heights.
The Challenge
Gary’s women’s apparel brand had been operating since 2020, selling directly to consumers through their online store. During 2020-2021, the business experienced impressive returns on their advertising investments. However, they faced challenges in maintaining the same ROAS and grew increasingly hesitant to increase their digital advertising budget. Gary primarily relied on Facebook & Google ads for customer acquisition, yet, like many other ecommerce brands, his understanding of the unit economics contributing to its success remained unclear.
The Solution: StoreHero Integration
Upon integrating Gary’s business with StoreHero, we discovered that while he had achieved a remarkable ROAS of over 10x during the Covid period, it had now dwindled to around 4.5x to 5x on a weekly basis. Consequently, the business began to reduce their paid advertising, concerned that the diminishing returns on ad spend would render their marketing efforts unprofitable.
However, when Gary studied the product section in StoreHero, he discovered that the break-even point (BEP) ROAS for their top two sellers was merely 1.64x. Despite the decline in ROAS from 10x to 5x, cutting back on ad spend inadvertently led to a decrease in the number of profitable customers visiting the store.
Overcoming Hesitation: Boosting the Advertising Budget
In March 2023, Gary decided to take a bold step and more than doubled his advertising budget, resulting in a 117% increase in ad spend compared to the previous year. The impact on the business was outstanding! He spent €7,571 on advertising, generated €76,541 in sales (a 39% increase), and saw the net profit soar to €7,325, marking an impressive 324% growth.
The Key to Success: Consolidating Data and Gaining Insights
StoreHero’s ability to consolidate data from multiple sources provided Gary with valuable insights into his business. Gary utilised the insights and recommendations section in StoreHero to quickly understand his ad performance and make changes to his paid marketing setup accordingly. Prior to using StoreHero, Gary was often overwhelmed by the various ad manager platforms. StoreHero explained to him in plain English what was working and what could be improved, simplifying the process and making it much more manageable. With this newfound clarity, Gary was able to make data-driven decisions that optimized his ad campaigns, driving better results for his business.
One of the most alarming discoveries was the amount of discounts he was giving out relative to his bottom line. Upon examining the finance page on StoreHero, Gary realized the negative impact of his discounting strategy. Consequently, he discontinued the Welcome10 discount offered upon email signup. While this led to a slight decrease in email signups, it had a minimal impact on the conversion rate. Yet, the impact on the bottom line was huge.
In March 2022, the value of discounts surpassed the company’s net profit, with discounts making up 2.78% of total sales. However, by March 2023, the discounts accounted for only 0.55% of the total sales, showcasing a significant improvement. This strategic decision, backed by data from StoreHero, allowed Gary to maintain a healthy bottom line while continuing to grow his business.
Efficient Use of Resources: Understanding Operational Expenses and Labour Costs
Although the increased advertising budget led to a slight decrease in ROAS, the higher sales volume ultimately improved the efficiency of the business’s operational expenses. StoreHero allowed Gary to enter all of his operational expense data, which amounted to €15,979 per month and included staff salaries, rent, software, and agency fees. By boosting the sales volume, Gary was able to maximize the value of these expenses and enhance overall business efficiency.
In fact, the increased ad spend not only increased sales but also made the fixed operational expenses of labour and rent much more efficient. Labour as a percentage of sales improved by a staggering 28%, which in turn meant that the business was operating on a much leaner basis and therefore generated more profits.
Gary had never considered analysing labour costs as a percentage of sales, but StoreHero enabled him to do so, leading to better decisions regarding workforce planning. He admits that previously, there was no clear strategy for determining the number of staff needed to fulfill orders. Fortunately, as the business continues to grow, monitoring labour costs as a percentage of sales has provided Gary with a metric to evaluate labour efficiency. This insight allows him to plan effectively for hiring additional staff, ensuring that the business maintains its upward trajectory & profitability as it enters the busy season later this year.
Conclusion
In conclusion, Gary’s ecommerce business faced difficulties in maintaining a high ROAS and making well-informed decisions due to a lack of clarity of his unit economics, which was exacerbated by relying on an accountant who was not well-versed in ecommerce and its unique reliance on paid marketing. StoreHero provided the comprehensive platform he needed to consolidate his e-commerce, marketing, and finance data, enabling him to make data-driven decisions and effectively scale his ad spend. By leveraging StoreHero, Gary was able to more than double his advertising budget and achieve a massive 324% growth in net profit, along with a 39% increase in sales.
StoreHero’s ability to integrate various aspects of an ecommerce business into a single, platform allows for a holistic understanding of the relationship between ad spend, sales volume, operational expenses and ultimately net profit. This bird’s-eye view of the business not only benefits individual store owners like Gary but also has the potential to revolutionise the way ecommerce companies approach marketing and decision-making.
As a result of using StoreHero, Gary has gained newfound confidence in managing his marketing budgets and making informed decisions about his business’s growth. He now has the tools and knowledge necessary to ensure that his marketing efforts are strategic and focused on driving profitability and growth.
Ecommerce businesses looking to gain control over their decision-making process, enhance net profit, and drive growth can greatly benefit from StoreHero’s comprehensive platform.
Don’t miss the opportunity to revolutionise your business – explore StoreHero today and unlock your ecommerce potential.
Get started with a 14 day trial
At StoreHero, we’re building the future of e-commerce. Get a demo with our expert team and see how StoreHero can supercharge your growth.
