I was able to change the capabilities with this
add_action( 'admin_menu', function(){
remove_submenu_page('woocommerce', 'wccs');
add_submenu_page( 'index.php', 'Customer Source', 'Customer Source', 'view_woocommerce_reports', 'wccs', array('WC_Customer_Source', 'display_main'), 9999 );
}, 99999 );
I had to remove the sub menu and create it again with a different capability. I had to put it under Dashboard (index.php) because it doesn’t work if I try to put it under Woocommerce tab using “woocommerce” as is currently in plugin.
Now the report page is available for Shop Managers.