New Research Shows Big Opportunities for Small Businesses
Today's technology has changed the shopping experience.
While many of us still enjoy trying on clothes at our favorite department
store, we also relish the ability to buy specific and unique items through an e-commerce
app, or research product details via our smartphone.
The changing nature of retail has opened tremendous
opportunities for small businesses in the past decade. According to new
research, "Charting the Growth Journey: From Product to Profitable
Business" from GS1 US, a not-for-profit product identification and
standards organization, the most successful small businesses are those that develop diverse strategies
for growth. Specifically, small brands that demonstrate a solid understanding
of retailer requirements and seek the expert advice and services of external
partners are better equipped to take advantage of today's "always
open" shopping environment.
There are three ways small brands are finding growth
opportunities in today's rapidly-evolving retail landscape: They focus on their
product, build a complete channel strategy, and partner with professionals to
accelerate success.
Focusing on the product
Small business owners are often driven by a passion for
bringing their unique product to market. According to the study, 61 percent of
respondents cite customer demand for personalized services and products as a
top trend. Almost as many (58 percent) anticipate that changing customer habits
- such as where they make purchases (online or in-store) - will impact their
brand's growth.
"Building the story, the brand, and trust, is critical.
Otherwise, it's a race to the bottom on cost," says Steve Lange,
co-founder of It's All Good, a line of clean personal care products.
Focusing on customers and their needs is important, but
finding the right balance and managing diverse business challenges such as lack
of time and resources, are major concerns for many of the brands that
participated in the study.
Building a complete channel strategy
Small businesses must look beyond the immediate pressures of
starting a business to position themselves with the right retail channels for
their products. These can include online marketplaces, national retailers,
local retailers, kiosks, craft fairs, or their own stores or websites.
High-growth leaders (respondents who experienced 25 percent or more growth in
the past year) 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 the past 12 months) report using just 1.3 channels.
Proving credibility to retailers is also a major hurdle for
small brands. The study found that 59 percent of leaders 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. Additionally, 57 percent of these same growth leaders indicated that
using UPCs in their product listings helps customers more easily find their
products online.
"Incomplete product information and UPCs show a lack of
experience to potential retail partners. It's important to understand that you
need consistency from retailer to retailer," says Erik Elfstrum, founder
and CEO, pureLYFT, an all-natural caffeine alternative beverage.
Partnering with professionals
Seeking outside business support was also identified as an
important growth factor among small brands. Such partnerships help them build a
more sustainable business model and offer opportunities for expansion. The
study found that more than half (55 percent) of high-growth leaders agree that
partnering with a retail broker or consultant has been critical to growing the
business. Specifically, 83 percent 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.
For help finding the right partners to support growth, many
small businesses have found credible options through the GS1 US Solution
Partner Program, a network of certified solution providers that provide
guidance and a range of services to support retailer requirements.
More information can be found at company registration blog.
Ultimately, it's a new world for shoppers and businesses
alike. The research shows that maintaining a holistic view of the opportunities
available to small businesses is a major contributor to long-term growth.
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