The ever changing map of e-commerce is making the web-only sellers as well as the ones with a physical store and an online outlet, to shape their business in a convincing way. SWOT analysis is one of the very common business models that can help a business to judge its present market position when compared to that of the competitors. SWOT (Strength, Weakness, Opportunity, Threat) analysis need to be carried out by the e-commerce merchants with a real-world essence. While strengths and weaknesses can be best traced out by looking into the inner working of a business, opportunities and threats are external, which it needs to figure out by keeping a keen eye on the operating industry.
Figuring out Strengths and Weaknesses
It is essential for the web merchants to carry out the SWOT analysis at least annually, so that they can be infused with a sense of competition and know their worth and standing in the operating domain. The strengths of an e-commerce merchant are its commendable inventory, its customers, the support its offers to the customers post-purchase, the way it frames its pricing strategies and the like. The discounts and sales propositions are framed in such a manner that it pleases the customers without compromising on its profit margin. It helps a web merchant in consolidating the revenue generation graph, with sales count catapulting.
In order to indulge in the right analysis, a web merchant can conduct surveys and its customer base is one of the trusted sources that it can rely on for effective inputs. This way it can work on its weaknesses and offer a greater competition to the rivals in the same niche. The objective of an e-commerce merchant should be to build on its strength and eliminate its weaknesses.
Engaging in a Comparative Study
The SWOT analysis can be carried out by the top managerial leaders along with the team of experts who engage in market research and analysis. You can also hire a professional consultant who has real-time expertise in this field. When indulging in the comparative study, the e-commerce merchants should make a study that takes into account the merchants who only operate online as well as the ones with the brick-and-mortar counterpart. When comparing with only e-retailers and the traditional ones, the study of the scope, opportunities, threats get more complicated as most of the e-sellers have their physical retail outlets. Those who do not have the physical stores are striving hard to have their online business counterpart.
The urge to buy transforms into a buying action not only by the quality of the products available or the reputation of a merchant, but price plays an important factor in governing the purchasing decision of a buyer. So it is not only the e-sellers who can lure the customers by changing their offerings, their sales pitch and sales propositions from time to time, the retailers are making good use of the pricing data tools. Before finalizing the deal with a particular e-seller, a smart buyer is always keeping an eye on the price changes so that he can have true value of the money that he is investing. So in order to surpass the rivals, a pricing strategy that would hook the attention of the customers in a niche, is required. This, in turn, makes the prospective buyers to turn into potential customers.
Availing the Competitive Advantages
When a web merchant indulges in competition analysis, he gets to know the points that can be regarded as the strength of his business. In order to outdo the rivals in the niche, he needs to figure out how and why the customers should choose him, come to his site, engage in buying and again be back to make repeated purchases.
A web merchant needs to scrutinize the potentiality of his own business and find out:
- What are the scoring points of his business that separate him from the others in the niche?
- How vast and versatile is his product inventory?
- How the best “sales” words like ‘free’ ‘new’ help in hooking more customers is utilized?
- Is product suggestions offered to the customers?
- Are you willing to listen to every grievance of the customer in the post-purchase phase?
The Opportunities and Threats
Utilizing opportunities in an operating domain depends on how you are keeping an eye on mergers and acquisitions. It is also about building rock solid plans and implementing strategies for incorporating technologies that would appease your loyalists, invite more customers and help you to outdo your competitors. It is the improvement brought about in the shopping cart software, inclusion of the live chat option and exciting, new features, which can totally make a web merchant to be in the good books of the customers. The ecommerce merchants have Amazon, Ebay as their biggest competitor. These giants in the sphere of ecommerce enable small businesses to learn a lot, helping them to frame the best policies.
The traditional retailers need to find out how they can improve the buying experience of the customers by revamping the modes of web-based shopping. Customer-friendly shopping experience depends on offering of newer customer services. When it comes to identifying the threats in the field, it is about crossing the barriers in the legal arena and keeping an eye on the various legislations.