What Happens When a Business Says It’s “Woman-Owned”? New Research Shows Surprising Benefits
Tami Kim Nicole Davis
The increasing visibility of “woman-owned business” (WOB) labels in the marketplace raises important questions: Do such labels influence consumer perceptions? If so, how—and under what conditions? Recent research by authors Nicole Davis and Tami Kim provides compelling evidence that explicitly identifying a business as woman-owned can positively affect consumer evaluations. Across five preregistered studies—including one conducted in a real-world setting—the authors demonstrate that affixing a WOB label enhances perceptions of the business’s competence and service quality, subsequently increasing outcomes for the brand.
These findings run counter to the common concern that emphasizing a marginalized identity, such as gender, might reinforce negative stereotypes or reduce perceived legitimacy. Instead, the authors find that highlighting a woman’s ownership can serve as a strategic cue that activates perceptions of agency: the belief that the business owner is intentional, proactive, and in control. This perception of agency leads consumers to view the business as more competent and capable, thereby increasing the likelihood of purchase.
In one study, participants evaluated a financial services firm more favorably on both competence and service quality when the business was identified as woman-owned, compared to when no ownership label was present. Notably, this effect was consistent across racial representations (White, Black, and Asian), indicating that the label’s benefit applies broadly to women business owners regardless of racial identity.
A field experiment further supported these findings. The researchers partnered with a local dessert shop to distribute promotional flyers, some of which included a WOB label and others that did not. Flyers in both conditions offered a chance to win a gift card via QR code sign-up. Significantly more individuals responded when the flyer included the WOB label, demonstrating that the effect extends beyond attitudinal measures to actual behavioral engagement.
Importantly, the studies also identify boundary conditions that qualify the effectiveness of the WOB label. The label had the strongest impact when consumers lacked other explicit indicators of business competence—such as the owner’s years of industry experience. For instance, when the business owner was described as having 15 years of experience (a clear competence cue), the WOB label did not significantly alter consumer perceptions. Conversely, in the absence of such information, the label served as a substitute signal of credibility and professionalism. The label’s influence was also amplified in industries perceived as difficult for women to succeed in, suggesting that consumers may view the label as evidence of resilience and achievement in the face of structural barriers.
One notable caveat: the label’s effectiveness depended on the source. When the WOB label was said to have been added by the business owner, the positive effects on agency and competence were significant. However, when the label appeared to originate from a third party (e.g., Yelp), the effect diminished. This finding underscores the importance of intentional self-representation in shaping consumer perceptions.
Collectively, this research offers both theoretical and practical contributions. It extends literature on stereotype content, agency, and identity signaling in consumer behavior by demonstrating that self-ascribed identity cues can counteract bias and enhance evaluations. For practitioners, the findings suggest that adopting a WOB label in marketing communications may be a low-cost, high-impact strategy for improving brand perceptions and consumer engagement—particularly in contexts where other competence signals are limited or where gender bias may be more pronounced.
In summary, these findings illustrate that strategic identity disclosure—when authentically initiated by the business owner—can serve as a powerful tool for combating stereotype-driven disadvantages and fostering greater equity in consumer markets.
Read full paper:
Nicole Davis, Tami Kim, ‘Woman-Owned Business’ Labels Enhance Perceived Competence, Journal of Consumer Research, Volume 52, Issue 1, June 2025, Pages 115–134.
