Google Tag Manager, or GTM in short, mainly works as a communicator between your store and other tracking systems (such as Google Analytics, Google Ads, Facebook Pixel, etc).
In short, if a customer visits one of your product pages, adds it to cart, and buys it, GTM (a properly set and functioning one, of course) is what you should be thanking for deciphering and sending the info in this chain of events to other tracking systems.
Here are the many benefits of setting up GTM for a Shopify Store.
Enhanced website speed
You won't be weighing down your site by adding every single tag to your website one by one, but instead through a single snippet that is GTM.
You won't need a developer
You can add or manage tracking pixels through the “Pixel & Tag Management” function of GTM.
Fast process
Every info is processed and pushed in seconds.
Easy debugging & testing
Easily figure out what's wrong with your site, check if your tags work properly, or fix them.
Central management system for all tags
Control every tag from a single place.
Community support
Receive help from GTM’s own community and professionals.
Version history
See what's been changed by you or by someone else.
User collaboration
Invite 3rd parties if you need someone to take a look and change stuff.
Free
GTM is a free product by Google.