Access to the global market is the biggest strength of ecommerce businesses. It enables companies to expand themselves to the global level and facilitates the growth of global retailers. However, there are certain factors that companies need to analyze to compete on the global level. They are required to compare their businesses against both online sellers and brick-and-mortar retailers to take advantage of opportunities.
With the aid of a SWOT analysis template, ecommerce merchants can scan their relative standing within an industry, analyze their strengths, and minimize weaknesses. They can also identify opportunities and threats that will help them strengthen their position in the industry. Here are the steps involved in developing a SWOT analysis template.
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SWOT Analysis for Ecommerce Businesses
Step #1: Collect relevant data
Companies need to have accurate data – stats, traffic figures, and sales data – before conducting SWOT analysis for a business. It will form the basis of any further analysis for companies. Few metrics that companies should necessarily check are:
Current website traffic: Gain a thorough understanding of the number of visitors, page views, and bounce rate to identify traffic trends and consumer preferences.
Conversion rates: Conversion rates represents the number the percentage of users that end up buying after visiting the site.
Social media statistics: Social media is a large source of traffic for most ecommerce companies. Also, it offers detailed insights into customer choices and trends.
Shipping data: Know the average shipping time, shipping costs, and shipping delay to serve customers better and improve customer service.
Step #2: Perform competitor analysis
Competitor SWOT analysis is crucial for companies to identify opportunities and threats that can impact the business in the coming future. It starts by listing the major competitors and then finding the following details:
Product details: Analyze the key competitors’ website and find out the products sold by them. Also, gain key insights regarding new products they are planning to launch and document the pricing for all their products as well as the shipping costs.
Promotions: Know if competitors are running any current promotions such as a discount, offers and coupons. If yes, analyze how prominently they are running these promotions and the products they are promoting heavily.
Advertising spend: Understand where competitors are advertising their products. Identify advertising mediums, target keywords, and top social channels they are utilizing. If possible, find out the competitors’ offline ad spend including radio and TV advertising.
Website designs: Although this is subjective, performing a design and usability audit is must to figure out the quality and quantity of product images and spot opportunities for improvement.
Conducting competitor SWOT analysis is imperative to analyze costs of various available alternatives. Request a free demo to start your 7-day free trial now!
Step #3: Analyze market trends
Often, there is little concrete data available on trends but analyzing future demand can provide companies with a good idea of trends. If you have been in business for some time, you’ll have a better understanding of the market. It is also important to determine factors such as:
- Market trends that can increase or decrease the sale for your products (for instance: any celeb started wearing an outfit similar to yours).
- Current and projected demand for your products.
- Regulatory norms and custom duties that impact the shipping of products in different countries.
- Recent market developments that can impact the competition.
“Since having an estimate of the exact numbers for each factor is difficult, a general idea of developments happening in the retail industry will form the basis to perform SWOT analysis,” says a procurement expert from SpendEdge
Although SWOT analysis isn’t imperative for ecommerce success, it is highly recommended by our experts to build an effective long-term strategy for business. With a SWOT analysis template, you’ll be able to identify trends before competitors and plan effective growth strategies.