All retailers face day-to-day challenges, yet despite today’s challenging climate, there are still plenty of opportunities to be had. By conducting a detailed retail SWOT (strengths, weaknesses, opportunities and threats) analysis, actionable insights can be gained to help retailers understand the future of their own organization.
Key strengths for retail
Identify your strengths first, as these will form the foundation of your opportunities. Look at areas such as brand authenticity, unique selling points and product range, then break these strengths into subsections such as customer service, store design, pricing, technology and so on.
The strength of a retailer is what sets apart the leaders from the competition, with many having considerable financial backing, which adds security of more capital and easier access to bank loans.
SWOT analysis weaknesses
Using market research, retailers should be able to compare the business against those that are similar, in order to find key areas that need attention and improvement. During this process you may find that you have a weaker brand image than your competitors, or a limited presence in the market. If your brand sells a selection of items that range from cheap products, through to more expensive goods, you may find that your store is difficult to define and therefore loses its edge.
For retail, a lack of digital innovation is a common weakness, and one that requires significant investment to overcome. Many retailers invest in digital technology, bringing together both the online and in-store experience to utilize the growing trend in e-commerce and mobile efficiency.
SWOT analysis opportunities
Opportunities highlight the key short, medium and long-term objectives of a brand, based on a review of a company’s sales force, market research and performance. Industry insights, the relationships between you and your suppliers, and seasonal events such as the FIFA World Cup or a royal wedding, for example, are all powerful sales drivers and form the basis for growth.
Technology is key to identifying fresh opportunities in specific sectors. With the help of AI, for instance, retailers can use data collected from their customers to deliver a personalized experience and service. These insights enable them to generate accurate predictions of what customers want to see and display to them via emails, app notifications or targeted social media ads.
Heat maps also allow the monitoring of exactly where customers walking in store and which promotions increase dwell time. Installing virtual assistants for popular areas instore will help make this process more efficient, and can even add a touch of personalization if it responds to customers’ needs, based on the demographic information collected.
SWOT analysis threats
Threats can be both internal and external, and are classified as anything that might have an adverse effect on the revenue growth in store. For retailers, this could be a general decline in consumer demand, price wars with competitors, or a new business that disrupts the market. However, bigger external factors, such as an economic downturn or political uncertainty, could also play a major role in this. These factors could affect the local economy, bringing down exchange rates and impact the cost of both imports and exports.
Internal threats can be a s simple as not having enough staff to meet the demand of your customers, or the breakdown of a supply chain due to late deliveries.
Good SWOT analysis examples
Be sure to consider each element of the SWOT analysis once it is completed. This will mean making a sturdy plan of action with each, ensuring that they are in line with existing marketing strategies. It is also important to ensure that everything comes together to meet performance objectives, which will ultimately rely on the strong social media community to attract customers to an event in store.
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