SWOT Analysis and its benefits to ecommerce

eCommerce SWOT Analysis

Most people will be familiar with the concept of a SWOT analysis, whether you learnt about the technique as a student, or have had to complete one as part of your job.

But if you’ve not heard of a SWOT analysis, it stands for ‘Strengths, Weaknesses, Opportunities and Threats.’

Completing one for your business, product or service will show you what you’re doing well, the opportunities for improvement and what could be a factor in ruining your chances of continued success.

With this in mind, a SWOT analysis offers a concrete, real-world audit of a company, alongside a scan of its relative standing within its market.


The objectives of a SWOT analysis are to build on your strengths and minimise your weaknesses.

You will want to quickly take advantage of opportunities that present themselves and try to mitigate outside threats.

In a marketplace that changes as fast as eCommerce, an analysis could occur two to four times a year.

Your customers can be a good source of information about what you do well and where there is room for improvement, so you should seek their input.

E-commerce merchants should compare their businesses to alternatives such as their online competitors, online retailers in other sectors and brick-and-mortar retailers.

This complicates things because something that may be a strength when compared to a brick-and-mortar merchant — low overheads, for example — may not be a factor for eCommerce competitors if they too have similar overheads.


To consider your business’s strengths, you need to understand what you do better than the competitors in your industry?

For eCommerce merchants, examples might be:

  • A larger selection of products
  • Faster and/or cheaper shipping
  • More payment options
  • Unique products
  • Loyalty scheme
  • Guarantees
  • Better return policy
  • Amazing photography, video, description and fitting/size information

These are all competitive advantages.

E-commerce vendors benefit from a structural advantage — you have lower operational costs than brick-and-mortar stores with a similar turnover.

It’s also important to think about not competing in crowded marketplaces with similar products and USPs, but maybe finding a niche and making sure you are the best you can be within that niche. This way you won’t have to compete purely on price.

Can you hand-select products that are all organic? Can you offer a subscription model? Can you create a site that selects products to go together and help with the shopping/design process?  Create a new way for people to navigate products and guide them e.g. plants by room or how easy they are to maintain etc.

Typical Ecommerce Weaknesses

Because of shipping times, there is no immediate gratification with eCommerce, although Amazon is getting very close to this.

Heavy, bulky and perishable goods are expensive to ship.

Price matching is always easy for the customer and therefore a concern for the merchants with less profit margin.

Security and fraud concerns mean some people are still reluctant to use their credit cards online.

The issue of shoppers being unable to touch and try on products can be resolved by having brick-and-mortar stores, very good photography/videos, reviews or a generous returns policy.


The questions you should be asking are “What new technologies can help me grow my business and attain an advantage over my competitors?” and “Where are my competitors vulnerable?”.

An example of this could be ensuring your website is built using the latest HTML5 coding and is responsive for mobiles and tablets.

E-commerce changes every day.

New technologies and features have helped level the playing field with traditional retailers.

For instance, improvements to shopping cart software have created a quicker, smoother and more customer-friendly shopping experience.

Live chat has enhanced eCommerce customer service,  diminishing the traditional retailer advantage.

Using Big Data analytics could be an opportunity for eCommerce companies to better understand customer preferences.

Social media sites provide free or low-cost promotions.


You should always be looking for broad industry shifts that might affect your growth. These include legal and regulatory changes. E.g. Cookies https://ico.org.uk/for-organisations/guide-to-pecr/cookies-and-similar-technologies 

Low barriers to entry are a constant threat in eCommerce. It’s easy to set up an eCommerce business, even in a garage. People can sell items via Facebook or eBay without setting up their own websites.

Big eCommerce merchants, such as Amazon, can always undercut smaller sellers on price.

All eCommerce merchants are competing with Amazon and its successful Prime shipping programme.

However, options now exist that can put online merchants on a more competitive footing with Amazon. Also, try to think of ways to attract customers who aren’t price-sensitive or deliver added value to products such as quick turnaround, free delivery, customer service, loyalty points, easy reordering process etc.


We’ve created a SWOT Analysis diagram below for an independent, family-owned jeweller.

By establishing your strengths, weaknesses, opportunities and threats, you can focus on what your business is doing well, and how you can use those points to your advantage, as well as identify areas for improvement.

SWOT analysis

To take this a step further, you can also make each point from the SWOT Analysis an action within your strategy.

 A TOWS Analysis provides a business with a visual representation of how a plan of action can be made from the detailed SWOT Analysis.

tows analysis


Completing a SWOT analysis on a regular basis, perhaps once or twice a year will really help you to understand your position in the eCommerce market.

Whether that’s giving you a broad overview of eCommerce industry trends, showing you where you stand in relation to your competitors or providing insight into mitigating your weaknesses and building on your strengths, it’s something every business should consider when making future plans.

If you’d like to discover how we can help you and your business to create a successful digital marketing strategy, please click here for a free online marketing review of your website.

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