New GS1 US Research Reveals 59% of High-Growth Small Businesses See Direct Correlation Between Sales Growth and Complete Product Information
Study Conducted to Examine Critical Drivers of Small Business Growth in Retail
EWING, NJ – September 17, 2019 – A new study titled “Charting the Growth Journey: From Product to Profitable Business,” conducted by GS1 US® in collaboration with Longitude, a Financial Times company, found that 59% of high-growth small business owners see a direct correlation between providing complete product information (such as images, product origins, and more) in their online listings with the number of products sold. These growth leaders are defined as having achieved more than 25% growth in the past year.
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.
About GS1 US
GS1 US®, a member of GS1® global, is a not-for-profit information standards organization that facilitates industry collaboration to help improve supply chain visibility and efficiency through the use of GS1 Standards, the most widely used supply chain standards system in the world. Nearly 300,000 businesses in 25 industries rely on GS1 US for trading partner collaboration that optimizes their supply chains, drives cost performance and revenue growth while also enabling regulatory compliance. They achieve these benefits through solutions based on GS1 global unique numbering and identification systems, barcodes, Electronic Product Code (EPC®)-based RFID, data synchronization and electronic information exchange. GS1 US also manages the United Nations Standard Products and Services Code® (UNSPSC®). For more information, visit www.gs1us.org.