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BizReport : Trends & Ideas : March 27, 2017


Research reveals extent of secondary revenue generation among UK retailers

Retailers are exploring secondary revenue options to boost profitability and combat low margins, according to new research from the British Retail Consortium and Webloyalty.

by Helen Leggatt

The British Retail Consortium (BRC) and Webloyalty report, 'Beyond the Core', found that pressure on retailers' margins has prompted the practice of putting in place secondary revenue options. Retailers stated a range of reasons for exploring secondary revenue options including the rising cost of delivery and fulfillment, the cost of ecommerce investment and delivering functionality across devices, and the economic uncertainty surrounding Brexit.

Cross-selling products and service, affiliate marketing, loyalty and reward programmes and even selling advertising space are all ways in which retailers are attempting to boost profitability. In fact, two-thirds (67%) of retailers in the UK said that at least 1% of their revenue is now derived from secondary sources while 18% say that a least a fifth of their turnover is from non-core profit lines.

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Businesses of all sizes are adopting secondary revenue strategies, although larger business are better able to capitalize on it. The research revealed that 22% of businesses that turnover more than £1 generating 20% or more from secondary sources.

"The survey gives insight into the application of secondary revenue generation amongst UK retailers, a practice widely implemented in the airline industry when faced with a similar situation to that faced by UK retailers today - low and falling margins on core products," said Rachel Lund, BRC head of insight and analytics.



Tags: finance, profit, retail, revenue, secondary revenue, UK








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