Additionally, 57% of these same growth leaders indicated that using universal product codes (U.P.C.s) in their product listings helps customers more easily find their products online. The full study, which examined key drivers of small business success across multiple retail industries, can be found at www.gs1us.org/small-business.
“There’s a significant difference between launching a product and growing a company,” said Siobhan O’Bara, senior vice president of community engagement, GS1 US. “The research supports that small business owners who maintain a big picture outlook and demonstrate a solid understanding of retailer requirements, such as identifying products with U.P.C.s and providing full product details, are able to sell more products, grow and gain consumer trust.”
The study also showed that small brands leveraging multiple sales channels and working with external partners were more likely to experience significant growth. While half of those surveyed (51%) launched a product to pursue their passion, ambition or skill, many focus too heavily on product development over other aspects of running a business. For example, respondents prioritized diversifying their product range (45%) and becoming the top-selling product in their category (44%) over expanding through new sales channels. Forty-four percent report understanding which are the right sales channels for their business, but nearly half (47%) have not yet developed a long-term sales channel strategy.
High-growth leaders, however, know the importance of channel mix and leverage an average of 3.1 channels to sell their products, while laggards (those with revenue declines in past 12 months) report just 1.3 channels. Also, 97% of small businesses that sell via an online retailer experienced some level of growth in the past year, confirming the value of e-commerce for enhanced product exposure. Yet, the majority of the businesses surveyed (60%) favor their own websites as the top sale channel, suggesting they prefer to maintain closer marketing relationships with customers.
In addition to mastering channel strategy and focusing on product information, seeking outside business support was also identified as an important growth factor. More than half (55%) of high-growth leaders agree that partnering with a retail broker or consultant has been critical to growing the business. Specifically, 83% of small brands that leverage online marketplaces and national retailers say partners (such as barcode services, software providers, business consultants and more) improve their understanding of product information and its impact on their business.
“The study provides an opportunity for small businesses to benchmark themselves and learn from similar companies that are succeeding. The data confirms that achieving sustainable long-term growth relies on a diverse channel mix and preparing appropriately to meet the unique demands of each channel is critical. Those who reach out for support to understand the changing retail landscape will be better positioned to take their businesses to the next level,” said O’Bara.
GS1 US and Longitude conducted the study in Spring 2019 via an online survey of 513 leaders of US small brands representing apparel, food and beverage, arts and crafts, health and beauty, electronics and home and garden industry sectors. The survey findings are supplemented with insights obtained from interviews with small business owners, retailers and solution providers.
For more information and to download a copy of the research report, visit www.gs1us.org/small-business.