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More than two thirds of retailers are now exploring secondary revenue options to boost their profitability and tackle margin squeeze, new research conducted by the British Retail Consortium (BRC) and Webloyalty reveals. The report, Beyond the Core, highlights how secondary – or ancillary – revenue options are becoming common place.

In the survey of UK retailers, 67 per cent of businesses reported that at least one per cent of their revenue now comes from secondary sources, with 18 per cent deriving at least a fifth of their turnover from non-core profit lines.

Examples of secondary revenue methods include affiliate marketing, selling advertising space, cross-selling additional products and services, offering credit as well as loyalty and reward programmes.

“The retail landscape is facing one its biggest challenges to date; remaining profitable during times of change,” says Guy Chiswick, managing director of Webloyalty, northern Europe. “Threats to profitability are multiplying, from escalating delivery and fulfilment costs, the strain of handling huge returns, the cost of ecommerce investment and delivery functionality across devices. Not to mention the uncertain and unpredictable effects of Brexit.

“Our research shows that secondary revenue strategies have the potential to combat low margins. However, whilst they can be easily incorporated into retailers’ overall marketing agenda, to maximise revenue through these sources it is important they are relevant to the brand and introduced at the right stage of the customer journey.”

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