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Home improvement businesses take advantage of positive trading conditions

Business is booming in the home improvements sector as consumers seek alternatives to moving home due to high costs, while being encouraged to renovate their properties by the increase of DIY shows.

Between 1 January and 30 June 2017, 274 home improvement businesses became GS1 members, representing a 15.6% growth compared to the number of businesses in the same sector registering with us in 2014 to 2016 combined.

To gain a better understanding why this was happening, we asked our members why their industry was flourishing.

More than a third of those surveyed (36.2%) said growth was due to a move online and away from ‘large bricks and mortar’ retailers, while 31.9% said it was down to a proliferation of home improvement programmes on TV.

Just under a third (27.7%) said that because house prices have increased, which has also meant stamp duty contributions have risen, this has encouraged home owners and landlords to improve their properties more than they did in the past.

Favourable trading conditions, rising house prices and inspiration from television programmes such as How to Live Mortgage Free has resulted in renewed confidence in the sector.

More than two thirds (61.7%) of respondents said they were upbeat around the outlook for business over the next 12 months, while 29.8% said they expect to see a growth of between 11 and 25% in sales and turnover over the next 12 months.

And the feedback received is consistent with our own analysis. When we looked at data from HM Revenue & Customs, we could see there has been a substantial increase in the cost of moving compared to the average salary.

We also know that more businesses in the home improvements sector are trading via online marketplaces, such as Etsy, and by trade-facing sites, such as Screwfix. Our membership numbers show that 81 British businesses joined the organisation to sell their products through Etsy in the twelve months to June 2017 compared to just 10 businesses which joined to sell products via Etsy in the previous three years.

By selling via these newer online marketplaces, along with more established sites such as Amazon and eBay, retailers in the home improvements sector have been able to sell to a larger market, there are less costs involved and with the potential to more easily export around the world.

While online marketplaces were initially seen as a threat to small businesses, they are increasingly becoming their distribution channel of choice. These sites are making it much easier to launch and expand businesses online allowing simpler trading and expansion across borders.”

Gary Lynch, CEO of GS1 UK

“But selling online and using digital marketplaces present small businesses with a different set challenges and barriers, compared to traditional retail. These include standing out from the increased competition, protecting brand identity, managing all the information and data needed to sell via marketplaces, and ensuring supply chains and distribution channels are as efficient as possible.”

If you’re looking to upscale your business, check out how we can help you sell online.


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